The outlook for nonprofits in 2016 is not all rosy, even though the economy is turning around and fundraising should be up again. We tapped experts for their take on what’s ahead.

Capacity building

One area of focus will be capacity building, says Center for Nonprofit Advancement CEO Glen O’Gilvie. Organizations will spend time and resources on professional development for individual employees, especially those on the front lines of their programs, as well as increasing the organization’s outcomes. Glen says his organization’s recent survey revealed how important capacity building is for nonprofits. This represents a shift from funding as the top priority.

Fundraising continues to rise...

The Lilly Family School of Philanthropy’s most recent study forecast that funding would be up 5% in 2015 and 2016. Glen says the forecast came true for 2015 and he expects no different in 2016. A strong economy and rising individual wealth are helping fuel the increase. What’s changed is that donors are paying more attention to the organization’s past performance and infrastructure. Glen says that may be a reason capacity building has become so important.

The number may also be up because more charities have fundraising campaigns in place today than did four years ago, says a recent NRC Fundraising Survey. Nearly half of charities in the study have structured campaigns, up from 12% in 2011.

...but not without challenges

Some fundraising challenges nonprofits are grappling with, however, include the fact that local governments are still being impacted by the downturn, says Wider Opportunities for Women CEO Amanda Andere. Public dollars aren’t there the way they used to be and nonprofits are facing more competition. The DC region is also suffering from Fannie Mae and Freddie Mac winding down their foundations last year. Another challenge is that individual donors are also moving away from funding nonprofits and they’re now supporting specific individuals and causes, she adds. So why is there 5% growth in fundraising? Nonprofits that have kept up their individual relationships are seeing the best fundraising results.

Higher ed and environmental groups seeing most revenue growth

To get a picture of the health of nonprofits in the DC area, we turned to the Center on Nonprofits and Philanthropy, which crunched some numbers exclusively for Bisnow.

Nonprofits in Washington-Baltimore are faring well; they were more likely to see a revenue increase, some over 10%, between 2013 and 2104 than other regions of the country. Local area higher ed and environmental groups were the most likely to grow, while human services organizations were the least likely to experience a large revenue bump. Revenue dropped the most for nonprofit hospitals and international and foreign affairs organizations between 2013 and 2014. 

Homelessness, equality and workforce development remain top focus areas

In the DC region, the biggest needs are still around housing and human services, says Glen. The number of first-time homeless families spiked during the recession, and homelessness has remained one of the region’s biggest areas of need. Second is workforce development. Amanda says nonprofits also need to find better ways to address equity issues around women, women of color and income disparity.