Below are some of my predictions of events and trends that will impact the nonprofit sector in 2016 and beyond. Last year, while noting that good prognosticators have to go beyond stating obvious trends, I made only one prediction: “Nonprofits will increasingly recognize the importance of understanding and responding to the for-profit social enterprise movement.” And over the year, nonprofits certainly took note of such events as the announcement of the Chan Zuckerberg Initiative LLC, the non-charity vehicle for Priscilla Chan’s and Mark Zuckerberg’s $45 billion social good pledge, and the continuing emergence of the benefit corporation, a taxable “hybrid” entity bearing characteristics of both a traditional and nonprofit corporation. This year, I’ve made a few more predictions, mostly reiterating or reworking those of others who study these things.
1. Country Divided Over Issues Exacerbated by Terrorism
I hesitated to lead off with a prediction of bad news, but terrorism is growing exponentially as a critically important issue many nonprofits will need to factor into their planning. Beyond the direct physical harm caused by such acts, there will be continuing conflicts between those who demand social justice and those who demand laws that they believe will create greater security even at the expense of equitable treatment and the Constitution. The far right will continue growing stronger as it advances a campaign based on public fears of extremist Islamic terrorists, despite the fact that most terrorist acts are associated with domestic far right extremists.
2. Black Lives Matter
This social movement will rapidly grow and exhibit its political strength. Racial justice, particularly involving Black Americans, is an all-too-obvious problem, and citizens, especially those who are younger and/or belong to minority groups that have traditionally neglected their voting responsibilities, will step up and influence elections based on this simple, yet terribly complex, issue.
3. Gun Control
President Obama will use his executive powers to create stronger gun-control regulations focused on licensing requirements and background checks. Nevertheless, gun violence will continue to be a critical public health crisis for the country with over 100,000 victims a year.
4. Extreme Weather
A very warm El Niño, a strong Arctic Oscillation, and the continuing consequences of human-caused climate change will continue to produce some extreme weather conditions. Climate-related disasters will become more frequent occurrences. And cities (and their residents) that have not previously experienced such disasters will be very ill-prepared.
5. Greater State Regulation of Nonprofits
State regulators will be more assertive in enforcing registration requirements for charities and professional fundraisers. This will be a consequence of increasing media coverage of scandals in the nonprofit sector, decreasing enforcement by a seriously weakened Internal Revenue Service, and diminishing public confidence in the sector (even though it will continue to be by far the most trusted of the three sectors). Some states will attempt to clear their rolls by revoking the right of charities to operate within their jurisdictions for failure to register and threatening board members with potential liability. Unfortunately, this will disproportionately impact smaller, volunteer-run charities that provide services to neglected segments of our population.
6. Increased Push for Federal Regulation of Nonprofit Activities
While the budget cutbacks have greatly harmed the Internal Revenue Service’s ability to enforce existing federal laws applicable to nonprofits, there will be a greater push for more laws and regulations to address problems in the sector. Dark money utilizing 501(c)(4) and 501(c)(6) organizations to support and/or oppose political candidates will continue to be exposed as a horrible problem for the country, and there will be a stronger push for reforms throughout the election season. The Bright Lines movement to make clearer guidance for nonprofit political activities will gain political and popular support. But reforms, which will eventually be made, will not be seen until after the election. Donor-advised fund regulations will again be deferred, but the push for a minimum distribution requirement will strengthen and may be inevitable. The move to tax colleges on their enormous endowments will also continue to gain popularity (but will ultimately fail).
7. Rise of Nonexempt (for-profit) Social Enterprises
The Chan Zuckerberg Initiative LLC received much of the attention last year as a nonexempt alternative to a private foundation or donor-advised fund for social good giving. While it isn’t the first example of this nontraditional form of giving, it may mark the moment where the definition of “philanthropy” started to expand to include giving through nonexempt vehicles not subject to the laws of 501(c)(3). Benefit corporation legislation will continue to be passed by some of the 19 remaining states that have yet to adopt such corporate form (eventually, it will be adopted in all states). Mission-related investments and program-related investments (PRIs) by private foundations in for-profit entities will rise markedly as recognition that such investments may, under certain circumstances, be more effective and efficient than grants to nonprofits in creating the desired social change.
8. Collaborative Management Practices
More examples of collaborative management practices, like holacracy, will continue to be tested and implemented, including in nonprofits, with varying degrees of success.
9. U.S. Presidential Election
Hillary Clinton will be elected as President over Paul Ryan, the Republican candidate emerging from a brokered Republican convention.
10. Academy Awards
Spotlight, a movie about the media’s exposure of the greatest nonprofit scandal in our country’s history, will win “Best Picture” at the 88th Academy Awards.