Nonprofits faced tough times in 2025. How will they adapt in 2026?

The nonprofit sector is facing a tough paradox right now. 

🫴 Demand for services in 2025 continued to rise — especially in human services, housing, food access, and mental health — while many organizations are operating with thinner margins, unstable funding, and an increasingly stretched workforce.

🙋Leaders are faced with heightened challenges:

- Growing community need  🆘 (see Independent Sector’s December 2025 report)

- Funding uncertainty 💸 - especially around government resources (actual cuts or just the uncertainty about future resources) and limited reserves

- Staff burnout and hiring challenges 😩 - the perennial ask of nonprofits to do more for less inevitably leads to turnover

- Economic and policy volatility 💢 that makes long-term planning harder - that inflation you are feeling at the grocery store and for your health care is just as prevalent at a nonprofit when looking increasing costs for utilities, program expenses, employee health care, etc.

👀 At the same time, many nonprofits are exploring how to adapt. Here are some key strategies to consider in 2026:

- Rethinking operating models 🤔: when was the last time you reviewed all of your programs and services? Have you had “mission creep”? Are programs underperforming? Do you have the right staffing structure to move forward? Have you thought more about external partners and collaborations?

- Investing in technology 🧑‍💻: AI is inescapable. How are you using it…or even, ARE you using it? What about using “integrated technology systems” (i.e, does your CRM talk to your finance and fundraising systems)? Internal tools abound, too, for comms within your org - are they being used efficiently and effectively?

- Diversifying revenue 💱: ha ha, that old chestnut! And yet, it’s still true. Beyond the usual push to increase program fees-for-service, individual donors and institutional giving, are you considering your ways to approach funders for more flexible, trust-based funding, with multi-year commitments? Do you have the capacity you need to focus on revenue generation?

➡️ The takeaway: this moment isn’t just about resilience. It’s about rethinking how nonprofits are funded, staffed, and supported so they can meet today’s needs without burning out tomorrow.

Curious how others in the sector are seeing this play out. Let me know what you think! ❓