If little else is certain about the future of the philanthropic sector, I can confidently predict that over the next few years, fundraisers will be under intense pressure from technological advancements, changing donor expectations, and a shifting economic landscape to raise more dollars than before. Despite philanthropy's failure to innovate, the upsides of innovating are numerous and impressive—mainly due to four shifting challenges that are transforming charitable giving.

But psychological studies have confirmed that we are more likely to act in the hope of avoiding failure than we are to secure success. So let’s start with a brief look at the potential costs and pitfalls of not innovating—with the hope that it will spur nonprofit organizations to take actions needed for financial sustainability and long-term success.

The Pitfalls of Philanthropy's Failure To Innovate

Diminishing Relevance: In recent years, donor preferences have shifted toward more engaging, transparent, and impactful giving experiences. Organizations that fail to innovate may risk becoming obsolete in contrast to these competitors, seeing diminished support and engagement from key stakeholders. Future-thinking development offices are transforming to deliver on these expectations.

Reduced Competitive Edge: The philanthropic landscape is increasingly crowded, with more and more organizations vying for donor attention and resources. Nonprofits that are hesitant and slow to change may struggle to positively differentiate themselves or capture the interest of potential—and next-generation—donors and partners, especially compared to more resilient and flexible organizations.

Missed Opportunities For Growth: By not strategically embracing fast-growing technologies and innovative practices, organizations may miss out on opportunities to expand their reach, improve their services, and increase their impact. This can hinder long-term growth and mission sustainability.

Inefficiency And Stagnation: Sticking to outdated methods and policies leads to inefficiencies, higher operational costs, and a general waste of resources. This affects an organization's bottom line and hinders its overall capacity to achieve its mission.

Read the full article about philanthropy's failure to innovate by Karen S. Cochran at Forbes.