Digging deeper into nonprofit trends in Europe

Across Europe nonprofits are facing a multitude of challenges as well as opportunity, from the impact of economic turmoil on costs, donations and service demand, to the rise and promise of AI.  To examine the trends and how nonprofits are responding, a recent webinar delved into some of key findings and trends revealed in the Nonprofit Pulse Report 2024. Catch up by reading our summary and watching the video below.

Examining how nonprofits are responding, the Nonprofit Pulse Report 2024 was conducted by the European Fundraising Association (EFA) and the UK’s Chartered Institute of Fundraising (CIOF) in collaboration with Salesforce. It’s a comprehensive analysis of the evolving landscape for European nonprofits, based on a survey of 670 organisations across Europe, of a variety of sizes and cause areas.

To look deeper into the trends it revealed, a recent webinar brought together Susan Mahon, Salesforce director of product marketing and Charlotte Rydh, EFA president and secretary general of Sweden’s Giva Sverige, with Rob Cope, executive director at the CIOF, and Nick Scott, digital, AI and strategy consultant.

Responding to challenge                                                        

The report highlighted that the biggest challenges for nonprofits last year centred around managing workload, staff recruitment and retention, and fundraising. And, against a backdrop of still rising service demand and costs, these issues look set to continue for some time with Cope noting: “Many charities are having to raise more just to stand still, and some areas and causes will be harder hit than others, such as those that had to draw on reserves during COVID. This all combines to create a perfect storm.”

In response, nonprofits across Europe are trying new approaches, and for a significant proportion, it’s paying off. 30% of respondents improved their ability to plan strategically in 2023 thanks to some of the changes implemented. A similar percentage (31%) reported more flexibility and agility in responding to change.

Greater emphasis on engagement

So, what actions are they taking? Internally, 40% have increased their use of digital channels, a sign, said Mahon of “how the sector as a whole is working as economic challenges remain.”

Supporter engagement has become an even greater area of focus. Three quarters of respondents made changes to fundraising strategy in 2023, with 23% expanding their use of digital channels and 23% diversifying channels. Driven by competition for other sources of income and the need to reach more people, nonprofits are also increasing in-person activity, with face to face (F2F) fundraising growing as the fourth most popular channel for fundraising and engagement after social media, website and email.

“Charities are seeking ways to make donor recruitment more interactive and engaging. It’s about how we connect with people and build relationships – especially as we become more digital,” said Rydh.

They’re also seeking ways of deepening engagement among existing supporters because, as Mahon noted: “It’s so much easier to retain a relationship than acquire a new one.”

Rising importance of ethics and trust

With this comes increased focus on supporter data, and a growing realisation of the need to protect it to gain, and retain, trust. Yet just 29% of survey respondents said they have measures in place to safeguard sensitive data, and only 36% have a data handling policy.

This, panellists observed, is likely down to lack of resources and competence internally – particularly in small organisations where people are often spread across multiple roles – as well as pressure to direct as much money as possible to the cause.

But as advances in tech, including AI, bring both new possibilities and ethical considerations for nonprofits, it’s an area they absolutely must focus on, said Cope, adding: “The issue of trust and being able to handle data responsibly will become very difficult unless we get a handle on it now.”

Nonprofits need to see trust as a key organisational asset, Scott added: “With AI it’s going to be a much bigger challenge, which means ethics and the ethical use of tech has to be central to the business of running an organisation.”

Taking advantage of tech advances

Certainly, the report highlighted a move towards using AI with 43% exploring or interested in how they might leverage it, and 13% already using it.

In fact, the true figure for users of AI is likely to be much higher, said Scott: “AI is a very fast-moving area and adoption is fast-moving too. Most charities are using AI in ways they don’t even realise. If you’re trying to make Facebook’s algorithms work for you so your posts are seen by supporters for example, you’re interacting with AI.”

Grabbing opportunities with AI

AI provides opportunity at every level, from individual to team and organisational, panellists agreed, able to transform productivity, support content creation, and provide invaluable insight. “In being able to use AI as another pair of hands to identify data trends and conduct analysis for extra insight, we can give supporters an even better experience,” Cope commented.

Adding to this, Rydh said, it can help reduce workload pressures: “With charities always short on staff, there’s a real opportunity too to use it to free people up from some of their more manual tasks to spend more time on higher value work.”

At the same time, they cautioned, it brings new challenges – from how to handle transparency, to how to decide what’s right for your donors, and ensure it helps staff wellbeing and workload rather than hinders.

Reaping the benefits of AI and doing so safely, Scott said, will be about ensuring support internally: by providing access to spaces for safe experimentation along with training and guidance to build understanding of where individuals and teams can experiment and where they shouldn’t.

“AI is no different in many ways to the digital change management we’ve all been through,” he added. “You can’t avoid the same conversations around culture, ways of working, and infrastructure. The foundations have to be right for anything new.”

What’s next?

So, looking forward, what can Europe’s nonprofits expect? With economic and political turmoil set to continue, the pressures are unlikely to lift any time soon so they can’t sit back, said Rydh. Pointing to the 22% who collaborated more with other nonprofits in 2023, she added: “I hope the greater collaboration we’re seeing will become a trend. If not, these continuing tough environments will be difficult to deal with.”

But opportunity will also present itself – most notably through digital and AI to expand the market for giving and enable smaller nonprofits to compete with organisations much larger than themselves for a share of the public purse. “I predict an increasing levelling of the field with small and particularly medium-sized charities able to punch above their weight to give more established organisations a run for their money,” said Cope.

With AI, Scott also believes the hype bubble will start to burst, enabling more valuable conversations about where and how to use it, in which the sector must ensure its involvement. “Nonprofits need a very active, knowledgeable and powerful voice in this to make sure that the real, productive AI that comes next is human led,” he said.

Nonprofits are already responding to a whole range of challenge and opportunity, through their greater focus on supporter engagement, to improving their internal processes, and their interest in AI. Looking ahead, what’s certain, concluded Mahon, is this: “Change is the only constant, so improving agility is going to become increasingly important for nonprofits to navigate or circumnavigate those changes.”

Key takeaways

• Ensuring relationships remain at the heart of fundraising is a key focus for nonprofits seeking to attract new donors and keep existing supporters engaged and giving.
• Fundraising, engagement, and trust are all reliant on having data that’s well-structured and protected, and this requires responsible data custodianship.
• Having internal support to embrace learning and experimentation in a safe setting will be essential for nonprofits to benefit from AI.
• Digital and AI will lead to an increasing levelling of the field, enabling smaller nonprofits to punch above their weight in competing for a share of the public purse.
• As challenges continue, flexibility, agility, and the ability to make the most of technology’s opportunities will be the markers of successful nonprofits.

Main picture by Anthony B Beck on Pexels