8 Key Nonprofit Trends Shaping Organizations in 2025 and Beyond

Nonprofits including foundations play a crucial role in society by addressing social, economic, and environmental challenges that government and for-profit businesses may not fully address. The relationship between nonprofits, foundations and family offices is deeply intertwined, as all often share an interest in philanthropy, social impact, and legacy-building. Family offices also often engage in impact investing, where they fund nonprofits, social enterprises, and businesses that generate both financial returns and social good.

As economies and societies evolve, nonprofit leaders must adapt to new challenges and opportunities. While discussions about nonprofit trends often focus on the right fundraising strategy or tips for civic engagement, deeper shifts in governance, collaboration, sustainability, and technology are reshaping the landscape. Understanding key trends can help nonprofits remain efficient, impactful and build stronger donor relationships.

 Here are seven key nonprofit industry trends organizations must pay attention to in 2025.

1.   Bridging Talent Shortages With Creative Solutions

While there’s always a need for increasing charitable giving, nonprofits have long struggled with attracting and keeping top talent. Many nonprofit organizations typically operate with a small team and limited budget, making it difficult to compete with the private sector for skilled professionals.

 To tackle these talent challenges, the nonprofit sector is exploring innovative solutions such as: 

• Part-time leadership roles: Organizations are bringing in experienced executives or advisors on a part-time basis. This approach allows access to specialized expertise without the financial strain of full-time salaries.
• Flexible work arrangements: By offering remote or hybrid work options, nonprofits can cast a wider net for talent, reaching qualified candidates beyond their immediate geographic area.
• AI-enhanced work processes: Nonprofits are using AI tools, often as part of a centralized nonprofit hub, to automate routine tasks, freeing up employees to focus on more impactful strategic efforts and develop new skills.

2.   Overcoming Workforce and Operational Challenges

These approaches align with workforce strategies seen in distribution, manufacturing, healthcare and other for profit industries, where hiring and retaining talent is equally challenging. Across all sectors, ERP solutions play a key role by enhancing fiscal control, increasing operational efficiencies, and improving reporting. Additionally, gained efficiencies and operational visibility provided by modern ERP solutions can help nonprofits ensure their organizations’ staff can allocate less time to busy work and more time to achieving the organization’s mission while also enabling their boards to maintain financial transparency and better budget control.

 For instance, a nonprofit healthcare association in the Midwest struggled with data visibility due to disparate systems tracking online registrations, portal access and contact information. The TM Group streamlined their operations by implementing Microsoft Dynamics 365, enabling them to centralize customer interactions and gain greater insights into their data.

 Similarly, a nonprofit broadcasting organization faced challenges with an aging on-premise Microsoft Dynamics Great Plains system, which limited their flexibility and required expensive hardware. The TM Group transitioned them to Microsoft Dynamics 365 Business Central, integrating solutions like Nomad eCommerce and Insight Works Dynamic Ship to tailor a more scalable and cost-effective system.

3.   Partnering for Impact: Collaborations That Drive Change

Nonprofits are increasingly forming strategic partnerships to expand their impact. Previously unlikely alliances, such as animal shelters collaborating with elder care organizations or women’s rights groups working with musicians, demonstrate the power of cross-sector collaboration.

Examples abound if you’re still looking for inspiration. BuzzFeed and Best Friends Animal Society invested heavily in a co-branding campaign that even involved celebrities, and M&S and Breast Cancer Now managed to raise millions through their coordinated efforts.

These partnerships enable a social enterprise to share resources, expand its reach and create innovative solutions to complex social issues.

These examples illustrate how nonprofit operations can harness technology and strategic partnerships to increase efficiency, scale their impact and attract potential donors.

4.   The Shift Toward Circular Economy and Sustainability

Sustainability is no longer just a corporate responsibility. As consumers become aware of environmental challenges ahead, it’s turning into a nonprofit imperative as well, affecting donor and volunteer behavior. That’s why many organizations are aligning with circular economy initiatives to minimize waste and maximize resource efficiency.

Key Trends

• Promoting recycling and reuse programs: Nonprofits must stay ahead of evolving sustainability regulations. While the EU has already established a framework supporting the circular economy through policies, financing and incentives, the U.S. currently lacks a unified federal plan. However, trends in EU regulations and consumer education will influence the U.S.-based nonprofit organizations.
• Community engagement campaigns: Since volunteering tends to increase the general involvement in local communities, from voting to social connections, nonprofit organizations have to ensure their sustainability education efforts are tailored to local conditions, whether that’s unique legal requirements or community needs.
• Donor preference shifts: As environmental, social and governance (ESG) initiatives become increasingly common, they can affect all parts of an organization’s operations, from mission statements and reporting obligations to fact-based messaging and volunteer onboarding.

A lot of these trends are moving targets, so every organization has to define a strategy that not only helps to preserve its core mission but also develops processes that further trust and confidence. While many service providers’ standardized tools can’t promise the level of nuance that allows nonprofits to finetune their operations, The TM Group has decades of experience across industries including nonprofits and foundations that enable them to do just that.

5.   ESG-Focused Investments Transforming Philanthropy

Donors and family offices are prioritizing ESG criteria in their philanthropic investments at an unprecedented rate.

More than 50% of individual investors plan to increase their allocations to ESG investments within the next year, and over 70% will do so expecting higher returns. Additionally, a survey of over 130 single- and multi-family offices found that 94% consider ESG principles a key factor in their investment decisions, with 91% viewing ESG as part of their fiduciary duty.

Nonprofits that align with corporate social responsibility will attract mission-driven funding and long-term donor commitment.

Opportunities for Nonprofits

• ESG-focused reporting to demonstrate impact and accountability.
• Tying ESG principles into grant applications and donor outreach.
• Aligning fundraising with thematic investing trends.

The important ingredient that will allow any charitable nonprofit to benefit from this trend is transparent reporting based on a reliable infrastructure. That way, it’s easier to approach a skeptical donor base and tap into related resources through corporate partnerships.

6.   Industry 5.0 and AI Integration in Nonprofits

As we move beyond Industry 4.0, Industry 5.0   is emerging as a powerful force combining human creativity with cutting-edge AI to solve societal challenges. Nonprofits can leverage these advancements to enhance operational efficiency and drive greater impact.

Key Applications for Nonprofits

• AI-driven predictive analytics to understand donor behavior and optimize campaigns, sometimes even to actively fulfill the organization’s mission by analyzing patterns in economic conditions or educational inequity.
• Generative AI to analyze donor data and predict donation patterns while streamlining communications, grant writing and donor outreach.
• Partnerships with manufacturing companies to explore AI-driven, technology-forward initiatives that align with nonprofit missions.

7.   Microfactories: The Rise of Small-Scale Production Models

Microfactories are decentralized, small-scale manufacturing hubs that offer nonprofits a unique opportunity to generate revenue and support their missions. The growth and success of microfactories is an opportunity for nonprofits.

How Nonprofits Can Leverage This Trend

• Partnering with microfactories to provide employment opportunities in underserved communities, supporting job training and skill development programs.
• Creating local jobs and reducing carbon footprints through small-scale, eco-friendly production and reducing transportation costs..
• Nonprofits can work with microfactories to use recycled materials, upcycled products and zero-waste manufacturing.
• Telling compelling impact stories to engage donors interested in innovation and sustainability.

For example, ChopValue, a circular economy company, has successfully launched 80 microfactories across nine countries, showcasing the viability of this model.

By collaborating with microfactories, nonprofits can expand their impact, promote sustainability, and create innovative solutions while diversifying revenue streams and reducing reliance on traditional funding. These partnerships support local businesses, drive economic empowerment, and enable nonprofits to scale efficiently, respond quickly to community needs, and engage environmentally conscious donors.

8.   Customized Governance Structures for Agility and Growth

Traditional nonprofit governance structures often struggle to keep pace with rapid industry changes. To remain agile, nonprofits are adopting customized governance models tailored to specific needs.

Emerging Trends

• Building diverse, open-minded boards that reflect community values.
• Implementing governance models designed for ESG and technology integration.
• Aligning governance with donor priorities, especially for foundations seeking transparency and impact-driven leadership.

Cases such as United Way of America and Adelphi University illustrate the legal and financial risks associated with governance failures. To stay ahead, nonprofits must conduct regular board assessments and tailor their governance models — whether traditional, Carver or Patron governance structures — to fit their organizational goals.

Is Your Organization Ready for the Next Wave of Nonprofit Trends?

The nonprofit landscape is evolving, and staying ahead of these trends is critical for long-term success. From bridging talent gaps and embracing AI to forming strategic partnerships and adopting ESG-focused philanthropy, nonprofits that act proactively will thrive in 2025 and beyond.

The TM Group specializes in helping nonprofits integrate innovative accounting and ERP solutions to improve efficiency, governance and impact. If your organization is looking to future-proof its operations, connect with us today.