Nonprofit Leaders, the Wave of Innovation is Here — These 5 Trends Are Driving It

“In the next three years, the nonprofit sector will see a wave of innovative, digitally savvy organizations capable of scaling impact across various missions and causes.”

That’s something I have deeply believed and audaciously claimed since I first got involved in the nonprofit sector in 2009.

For a long time, that wave of innovation felt like it was coming just over the horizon.

And so it’s been incredibly exciting to see the wave of innovation finally building across the sector in the last few years, with more and more leaders and organizations adopting innovative, scalable approaches to making an impact.

Today, I think there are 5 key trends driving that wave of innovation, that every nonprofit leader should keep an eye on….

Trend #1: Growing recognition that change is needed

It feels like at every nonprofit conference or happy hour lately, there is a growing consensus that our sector needs to evolve. It’s something we’ve been hearing from nonprofit leaders for years now, such as:

• Dan Pallotta's influential TED Talk "The Way We Think About Charity is Dead Wrong"

• Scott Harrison from charity: water’s critiques of traditional nonprofit models, like his podcast appearance on We Are For Good

• Nathan Chappell's book of insights on the "generosity crisis"

They’ve all been raising caution flags about a similar concern: outdated mindsets around scarcity, overhead, and the value of innovation, which have limited our sector's ability to scale impact. But there's hope on the horizon.

Trend #2: The surge of innovation in nonprofit-specific tools

If you’ve been in the sector long enough, you may recall when the choices for a 'nonprofit CRM' or a fundraising platform were quite limited.

But the nonprofit software market has been surging the last few years, and is expected to grow from $4.59 billion in 2025 to $6.74 billion by 2030, bringing us:

• Better CRM systems built for nonprofit needs

• Specialized fundraising platforms

• Marketing tools designed for impact organizations

• Rich educational content and resources from these providers

Trend #3: The next generation's approach to impact

A massive transfer of wealth is coming: $72 trillion will move to younger generations in the next 20 years, with an estimated $11.9 trillion directed to charities.

In January, the Lilly Family School of Philanthropy put out an incredibly insightful report called The Next Generation of Philanthropy that was packed with insights to know, including:

They’re focused on long-term impact

Often volunteer before donating to assess an organization’s effectiveness

Expect clear, measurable outcomes

Want detailed financial transparency

They're hands-on philanthropists

View themselves as change agents, not just donors

Often support organizations on social media in addition to giving

Actively advocate and mobilize their networks

They value digital-savvy leadership

Push for technology adoption

Want efficient, scalable solutions

Are more likely to adopt digital tools when leading organizations

Trend #4: The evolution of giving

I’d argue that a lot of those shifts correlate to donation trends we’re seeing as well, including:

Recurring giving

Increased 6% year over year, compared to a 5% decrease in traditional donations according to the 2024 M+R benchmark report

Peer to peer fundraising

A “request from a family member or friend” was recently cited as the #1 motivation for giving according to YouGov’s “What Motivates Americans to donate to charity.”

Unrestricted giving

Rose across all gifts increased from 46% to 60% from 2019-2022 in the United Kingdom according to the Third Sector Trends 2023 report.

We should also be aware, though, that if donors lose confidence in nonprofits as a vehicle for making an impact, they increasingly feel like they have other options, including:

• Conscious consumerism has surged with a 21% increase in the 3-year average of customers who made the decision to buy from socially conscious brands.

• Impact investing has seen a 93% increase over the last 5 years.

• Direct contributions that are not tax-deductible are impossible to quantify overall but examples like the more than $30 billion given through GoFundMe since 2010 certainly suggest they are rising.

Trend #5: The AI Revolution

While some nonprofits remain hesitant about AI, as one sector leader noted, "The benefits of these new AI technologies cannot remain accessible only to a few."

A series titled Introducing AI-Powered Nonprofits created in collaboration between FastForward and the Stanford Social Innovation Review pointed out four key ways nonprofits are leveraging AI:

1. Getting strategic advice

2. Structuring complex data

3. Translation and decoding

4. Creating innovative service delivery platforms

One example I got to check out of an AI powered nonprofit came from one of the first Executive Directors to provide feedback on the pilot of the Proimpact Leaders Community.

Eric Shepherd is the Executive Director of the Talent Transformation Foundation, which has trained a chatbot named Erica to answer users questions about fulfilling careers, self-awareness, and healthy relationships.

This scalable model enabled the organization to reach 98,000+ engaged members, with 430,000+ quizzes taken and 400+ active coaches.

Navigating these trends

As these five trends reshape the landscape, one thing is clear: no Executive Director should be navigating this wave of innovation alone.

The leaders who thrive will be those who connect, share insights, and build together. That’s exactly why we created the Proimpact ED Hive — a peer community where nonprofit leaders can swap real-world strategies, learn from one another, and get ahead of the curve.

If you’re ready to be part of the next generation of visionary leadership, I’d love for you to join us.