Key insights
- Nonprofits continue to be under intensified financial and operational pressure, but with that comes new opportunities and a roadmap for greater resilience.
- Efficiency, strengthened compliance, and protecting people and systems are essential strategic priorities for nonprofits aiming to stabilize and grow in 2026.
- Organizations adopting flexible long‑range planning and rethinking traditional models — including alliances and shared services — can thrive in a rapidly changing sector.
Equip your nonprofit with industry-leading strategies.
The nonprofit sector finds itself defined by two parallel truths: the pressures are real — and the opportunities are, too.
2025 had sizeable impacts on much of the nonprofit sector. Economic turbulence, shifting donor behavior, government uncertainty, and workforce challenges created what many leaders described as a “fiscal cliff.” Yet across the country, nonprofits also demonstrated remarkable adaptability, innovation, and grit.
What emerged from 2025 was not simply a list of challenges, but a blueprint of strategic priorities for nonprofits in 2026. Organizations well positioned for the future are those leaning into innovation, efficiency, compliance, talent development, and long‑range strategic foresight.
Explore these themes to help build resilience and thrive.
The 2025 reality check for nonprofits: A sector reshaped
Nonprofits continue to play an outsized role in the U.S. economy:
- 1.9 million organizations contribute about $1.5 trillion to GDP, according to the U.S. Bureau of Economic Analysis.
- Nonprofits employ 10% of the U.S. workforce, including hospitals, higher education, social services, arts organizations, and faith communities, according to the U.S. Bureau of Labor Statistics.
But familiar headwinds intensified in 2025 — and new ones emerged.
Cascading financial pressures
- 68% of nonprofits expect rising demand for services, according to the Urban Institute while
- 86% anticipate increased operating costs, according to the Nonprofit Finance Fund.
Funding volatility and the government “fiscal cliff”
- More than 200 federal executive orders disrupting federal programs
-
Federal funding freezes and cuts through the Department of Government Efficiency
- Heightened legal challenges and policy instability
The result: a sector forced to re-evaluate programs, cost structures, and long-term sustainability.
A shifting donor landscape
Donor behavior continues to evolve in complex ways:
- A slight decline in donors year over year
- A slight increase in average donation amounts
- Fewer small-dollar givers entering the pipeline
- An aging base of large donors
Compounding the shift is the explosive growth of donor-advised funds (DAFs) — now more than 3.5 million accounts holding $326.4 billion in assets, according to the National Philanthropic Trust DAFs are not going away, and this reshapes fundraising, accounting, and relationship-building strategies.
Workforce disruption
Top reasons we saw nonprofit employees leave their organizations in 2025 included:
- Mission misalignment
- Limited learning opportunities
- Lack of transparency
- Cultural decline
With five generations in the workforce and high demand for skilled talent, staffing and retention have become strategic imperatives — not HR issues.
Four strategic priorities for nonprofits in 2026
Increasing efficiency
Efficiency means aligning systems, data, KPIs, and talent – not just “doing more with less” or spending every dollar on programs. Integrated technology, automation, and right‑sized staffing models help nonprofits refocus leadership time from reconciliation to strategy.
Key questions nonprofit leadership teams should ask in 2026 include:
- Are our accounting, CRM, and operational systems integrated — or isolated?
- Do we have the right KPIs, and are we reporting them accurately?
- Are we using AI and automation to reduce manual tasks and unlock strategic thinking time?
- Should we right-size through outsourcing any functions instead of overstaffing or understaffing?
Reframing nonprofit compliance as value
Nonprofit compliance is evolving quickly — and it’s touching more parts of the organization than ever before.
New compliance realities include:
- Heightened federal and private grant documentation requirements
- Increasing state-level tax changes, such as Maryland’s new tax on tech services
- Rising expectations for time and effort reporting, payroll allocation, procurement oversight
- Religious organizations voluntarily seeking audits to demonstrate transparency
Safeguarding people, systems, and finances
Resilient nonprofits focus fiercely on protecting their foundational assets.
People: Invest in the mission-carriers
The most effective nonprofit organizations:
- Build mission‑aligned training for all staff
- Create clear career pathways before hiring
- Use experiential learning to keep roles engaging
- Foster transparency and trust as core cultural values
- Strengthen collaboration and cross-functional impact
With competition for talent increasing — and expectations rising — culture and development are key to retention.
Systems: Strengthen internal controls and cybersecurity
Internal controls help nonprofits safeguard assets, support accurate reporting, and maintain trust during uncertainty. Core components include segregation of duties, clear approval processes, reliable documentation, and regular monitoring.
As nonprofits rely more on digital systems and remote work, they face increased risks from phishing, ransomware, and data breaches. Essential cybersecurity safeguards include multifactor authentication, routine updates, employee training, strong access controls, and a clear incident response plan.
Navigating change with foresight: Long-range planning
In 2026, change is not a disruption — it’s the operating environment. Long-range, scenario-based planning is replacing traditional 3- to 5-year strategic plans. Reviewing the structure needed to support current and future operations can turn challenges into opportunities.
Forward-thinking organizations are shifting to:
- Mission-driven long-term planning
- Flexible, multi-scenario models
- Real-time KPIs
- Strategic “right people, right roles” evaluations
- Governance acting as a rudder, not an overseer
Nonprofits: A sector poised for change
While 2025 brought uncertainty, it also accelerated innovation and collaboration across the sector. Many nonprofits are reconsidering whether they must operate alone — or whether shared services, alliances, or even mergers may better serve their missions and communities.
This willingness to rethink, refine, and reimagine the nonprofit model is one of the most promising trends for 2026.
How CLA can help nonprofits in 2026
At CLA, we see 2026 not as another hard year — but as a pivotal one for nonprofits ready to embrace transformation.
We help organizations:
- Modernize systems and reporting
- Strengthen compliance and grant management
- Protect talent and culture
- Navigate policy and funding shifts
- Build long-term scenario plans
- Improve operational efficiency
We can help you turn challenges into possibility — and possibility into sustained impact.