In May 2023, Sage released the first part of its annual Grow Together Report: New Era of Giving, examining the effects of economic volatility on charitable giving in Canada. In the second installment, the report concentrates on the current state of Canadian nonprofits, exploring their performance and adaptability to new challenges.

The second part of the 2023 Grow Together Report titled, Building Value for Nonprofits in a Digital Economy, 120 nonprofit decision-makers were surveyed to assess their current economic situation and outlook. The survey reveals that although financial pressures for nonprofits have somewhat eased in the last year, they now face new hurdles as they cope with rising costs and securing skilled talent to drive strategic initiatives, including digital transformation.

This article delves into these insights, highlighting the viewpoints of decision-makers in the nonprofit sector as they address financial concerns and navigate evolving pressures.

Key findings:

• There’s hope for brighter days ahead. Nonprofits are cautiously optimistic about the future, with 42% reporting increased revenue, 34% flat, and 18% declining. Atlantic Canada and Alberta saw growth, while Saskatchewan and Manitoba experienced the least. Most nonprofits with revenue growth had less than a 25% increase.
• Feeling good about their accomplishments. Most nonprofits are optimistic about their performance, with 43% confident in their 2023 revenue forecast and 61% on track to meet goals. However, 20% of Canadian nonprofits lag in reaching annual revenue targets.
• Recognize potential challenges ahead. Nonprofits face changes in charitable giving, with only 34% reporting stable funding in the past 12 months. Most saw big declines in corporate (25%) and individual support (23%). The 2023 Grow Together report indicates donor/volunteer reduction, while most Canadians anticipate increased business and government backing for operations and digitalization.
• Corporate giving declines, government funding increases. Canadians expect increased business (63%) and government (57%) support for charities. With 28% of organizations reporting a rise in government funding, despite declining corporate giving, the focus is on supporting operations and digitalization efforts.
• Nonprofits face challenges like inflation, operational costs, and service demand. The report shows 53% experienced higher program costs, while 39% saw increased service demand, prompting 38% of organizations to expand their programs.

Part 2 of this year’s Grow Together Report shares how nonprofits are focusing on growing their programs, polishing their systems, and enhancing brand visibility to better engage with donors and volunteers. They are prioritizing efficiency and demonstrating value by adapting to shifting engagement expectations by sharing results, incorporating visuals, and producing videos to find ways to meet demand. Interestingly, some nonprofits haven't yet embraced online experiences, which emphasizes the necessity of digital transformation.

Additionally, the pandemic has truly made digital transformation essential for success, as tech-savvy charities attract Canadian donors. Nonprofits confront challenges such as skill gaps and assessing outcomes, but they collaborate with technology companies to improve their systems and maintain a competitive edge.

Embracing a modern mindset, nonprofits recognize technology as vital for future success. Sage is committed to supporting their unique digital transformation journeys with insights, expertise, and innovative technology.

Download Part 2 of the 2023 Grow Together Research Report.