Unit4 has published a study (Registration required) conducted by global research by Pierre Audoin Consultants (PAC), which looks at the strategies for non-profit organisations around transformation. The study is based on 200 senior strategy leaders based in North America and Europe. The survey was conducted before President Trump came into power.
Over the last five years, the volatile economic, geopolitical, and environmental atmosphere has made times tough for non-profits. Increasing costs have accompanied an increased demand for services. The study, titled “From transition to transformation”, examines the state of finance and operations, what non-profits are doing to transform, and what they need to do.
Non-profits face huge challenges, but many (70%) are turning to digital transformation to help overcome the challenges they face in 2025. 56% of respondents expect this investment to improve efficiency. One of the technology challenges they face is the ability to extract data from their systems. 72% cannot get data within a day, and for 30% it takes longer than a week.
The report examines the two focus areas highlighted by the study, finance and operation, with 40% looking to increase technology investment in these areas. It appears to be time for change, with 45% citing legacy technology as hindering progress.
Nick Mayes, Principal Analyst, Pierre Audoin Consultants, commented, “Non-profit leaders recognize that small, incremental changes are not enough to enhance their financial position and growth prospects at a time of increased volatility. Success hinges on smart data use, whether it is shaping programs to support new areas of demand, pinpointing the areas where the biggest efficiency gains can be achieved or mitigating compliance risk.”
What is in the report
The seventeen-page report is broken down into four sections and a short introduction:
- The financial outlook
- Operational Challenges
- Organization and technology
- Conclusion & recommendations
Each section contains commentary and analysis. While there is no qualitative research element within the report, it does draw examples from non-profits to relate how non-profits are making changes. However, there are no quotes from these customers, industry analysts, or even Unit4 leaders. The data visualisations are simple and could have illustrated the data points better.
Each section is divided into key themes from the survey and concludes with an analysis that includes the key takeaways from the section. The conclusion, while a solid synopsis of the study, provides no clear recommendations, actions or questions about what non-profit leaders should do next.
The key recommendation seems to be a section which delves into the value that a partnership with Unit4 can deliver and how its solutions offer “functionalities that streamline operations, enhance financial management, improve fundraising effectiveness, and facilitate better collaboration.”
The financial outlook
The outlook for non-profits is mainly positive, with 79% seeing some growth ahead. US organisations were the most bullish, with 41% expecting strong or very strong growth. 75% also believe they will maintain or increase their surplus to help with transformation efforts.
However, recent political events by DOGE, such as the dismantling of USAID, are likely to have an impact. Enterprise Times asked Chris Brewer, Global Growth Director, Non-Profit, of Unit4 about this.
He replied, “The dismantling of USAID by DOGE presents significant challenges for non-profits, prompting many to adapt by exploring new strategies. One approach is the shift towards shared infrastructure, where organizations collaborate to pool resources and reduce costs.
“There is also a greater emphasis on leveraging data and technology to enhance efficiency and maximize impact.”
Even in Europe, while organisations are embarking on multi-year to transform their organisations, the report cites the examples of the Salvation Army and St John Ambulance new challenges remain, as Brewer explained.
“Although not directly dependent on USAID funding, those European NFPs and NGOs that collaborate with US entities do face potential challenges in several areas:
- Funding Gaps: A loss of financial support for US organizations may pressure European NFPs to fill gaps or seek new partners. (European governments)
- Partnership Changes: This shift could lead to a rise in multi-stakeholder partnerships, encouraging closer collaboration with corporate and philanthropic funders instead of relying solely on traditional global aid structures.
- Demand for Collaboration: If or as US funding declines, there may be a push for efficiency, promoting shared data systems and resource pooling among non-profits.”
Operational Challenges
79% expect to see increased demand for services, and 38% believe that demand will increase by over 5%. However, due to cost pressures, 32% of plans to make reductions in services, further exacerbating the demand challenge. The US funding situation is likely to make that worse.
As events unfold globally, NFPs are also faced with the need for faster reaction times. There is room for improvement, with only 24% saying they can get campaigns launched within 48 hours. Once funding starts flowing, getting projects started takes longer. The authors believe that access to data can improve response times. 36% only have a limited view of their data.
Even when they do have access, it takes time to extract insights. 40% of organizations state that this process takes at least one-to-two weeks, with humanitarian NFPs (43%) finding this particularly difficult.
Another challenge is fraud. While 30% saw a decline in fraud, 26% saw an increase. The advent of AI and even more sophisticated fraud attempts may mean the situation is worse. Are non-profits detecting fraud as accurately? The authors believe that NFPs need to operationalize and automate anti-fraud measures across the organization.
Organization and technology
The report looks at who makes the decisions to shape strategy. It identified that top management (61%), decentralised teams (45%) and auditors/regulators (27%) have the strongest influence on strategy. The report falls short of investigating how they influence strategy. A qualitative element of this study may have highlighted some interesting insights.
NFPs are shifting to a centralised structure. Within the next three years, over 80% will have centralised Finance & accounting, Governance and compliance, HR, and IT. Fundraising and Program Management will not be far behind, with all functions increasing centralisation by over 30%.
As organisations look to digitally transform, the survey identified the top drivers for doing so. The top three drivers are:
- Improving operational efficiency (56%)
- To drive competitiveness and differentiation (42%)
- To meet regulatory requirements (39%)
This last data point may be why regulators are so influential on strategy. Interestingly, investment in transformation is focused evenly across several functional areas:
Almost one-half (49%) of NFPs expect to ramp up their:
- Finance and accounting systems (49%)
- Governance systems (48%)
- HR applications (41%)
- project management systems (52%)
Conclusion & recommendations
The report highlights three priorities for transformation initiatives:
- Faster decision-making, possibly in real-time
- Better forward planning
- The removal of legacy applications
Brewer commented, “The non-profit sector thrives on innovation, driven by the need to prove the impact of every spend. But in 2025, that challenge will be greater than ever. Digital transformation is already benefiting non-profits, but a water-tight business case is crucial to win stakeholder support. PAC’s research reveals where to invest to tackle legacy tech debt and drive more agile, real-time decision making.”
For non-profit leaders, there are some useful insights, but the research did not pull out many of the regional differences. In Europe, the responses were equally divided between DACH, the Nordics, Benelux and the UK. It would have been interesting to see what variance there was.
The changes in US policy could also have had a significant impact on responses from US organisations. Which might have had a knock-on effect on European ones, especially where, for some non-profits, demand could increase significantly with less support from US organizations.
