2026 outlook for nonprofits: To survive uncertainty and donor competition, digital is no longer optional
After navigating unprecedented challenges in 2025, nonprofits should prepare for more of the same in 2026. Organizations will have to overcome obstacles like uncertainty, intense competition for donors and a talent crisis.
But don’t give up hope. By embracing creative thinking and new digital tools, you can strengthen your organization around your core mission and emerge from the next 12 months stronger than when you began.
Keep reading to learn more about the top nonprofit trends in 2026 and how you can adapt to meet the moment.
What are the top challenges nonprofits will face in 2026?
In 2026, nonprofits will face uncertainty around funding, exhausted staff and the ongoing ripple effects from the government shutdown. But that’s not all, as generational leadership turnover and a shallow bench will leave some organizations scrambling to replace talent at the top.
- Uncertainty: The political and economic climate is unlike any in living memory, which has created significant disruptions to both day-to-day operations and long-term planning. Nonprofit leaders will need to get comfortable with not knowing what will happen next.
- Funding shortfalls: In 2025, the Trump administration delayed some grant funding and made moves to cut other funds as well. Expect more of the same in 2026, which means that more organizations will be turning to private donors, foundations and state or local governments to fill budget gaps — leading to intense competition over this limited funding pool.
- Staff burnout and retention: Because the nonprofit world (and the country) is going through so much turmoil, many team members are exhausted. People are abandoning nonprofit work for other sectors, which means organizations will have to both improve morale and figure out how to fill open spots.
- Leadership turnover: To further complicate retention issues, a generation of veteran nonprofit leaders is at or nearing retirement. Because nonprofits have fewer middle managers, slower hiring cycles and less money for staff development than the private sector, many organizations will struggle to prepare new leaders for success.
- Federal shutdown consequences: As of today, the federal government shutdown remains ongoing. Even after it ends, organizations will have to deal with the aftereffects of staff furloughs (including talent lost to other opportunities) or interruptions to constituent services that will continue to leave a mark for years to come.
- Outdated systems: Finally, many nonprofits still rely on outdated systems. This leads to slow workflows and fragmented data sources that make it harder to show results to donors, assess your financials and serve your constituents.
What are the major trends for nonprofits to follow in 2026?
To survive 2026, many nonprofits will need to adapt. Here are four action areas to help your organization rebuild and grow stronger over the next year.
1. Embrace a targeted digital transformation
To be blunt: A digital transformation is no longer optional for nonprofits. You’ll need effective digital systems to meet donor and regulatory requirements — not to mention to better leverage limited resources.
But don’t think of digital as a cost center. A digital transformation can actually relieve some of the financial pressure you face by helping you work more efficiently and expand your reach to both constituents and donors.
The key here is using digital to solve specific problems within your organization. Don’t invest in AI because it’s the hot new thing. Instead, look for inefficiencies or challenges that your team is struggling to overcome and then consider whether AI, automation or other digital solutions could help. Set specific goals and then create a digital strategy to achieve them.
Start with low-hanging fruit. Pick one use case and experiment with how digital can help. For example, you could try using AI to segment your donor list based on donor interests so that your outreach team can make more personalized appeals.
Think about how digital can make life easier for your team, too. If you’re struggling to retain team members in certain positions, can you automate the worst parts of those roles to make them more appealing?
Put financial systems in place to track where your money is going. Both donors and federal regulators will be watching, and clearer financials can also help you plan more effectively and find new ways to save.
And finally, consider that a tech upgrade can actually mean less tech infrastructure. If your organization is still operating in-house servers, you can likely make it easier to work remotely, strengthen your cybersecurity and cut costs by moving to cloud-based storage.
2. Embrace creative strategies like leveraging data in storytelling to boost donor engagement
Nonprofits should also explore creative strategies to boost donor engagement. Chief among them is storytelling.
Both institutional donors and individuals want to see how their donations are making an impact. So assess how you tell the story of your work. How can you leverage data to showcase not just the number of people you serve, but detailed outcomes?
For example, can you say that your wraparound program helped 100 students stay in school and graduate to enter the workforce? Or maybe you operate a food bank that helped reduce child hunger in your service area by 30%.
This is one area where having better digital systems can really help you shine. If you can show up to donor presentations or meetings with elected officials with data that tells the story of how X dollars given equals Y outcome, you’ll make a case for your work that’s tough to ignore.
Stories like this play equally well on social media or on other platforms used by individual donors. Younger generations, especially, often make giving decisions based on where their dollar will deliver a measurable outcome, so if you can present those outcomes in storytelling form, you’ll get both eyeballs and income.
3. Consider a merger or offering shared services
Financial pressures may lead some nonprofits to feel forced into exploring a merger or acquisition. But what if that pressure is really an opportunity?
An M&A can actually help organizations overcome financial challenges and refocus on core services. M&As allow two different organizations to bring together the best elements of each, often in a way that allows them to better serve constituents while pooling resources and donors.
Community Action agencies, Head Start programs or associations that serve similar groups should consider merging, especially if they have complementary strengths.
If a full M&A doesn’t feel like the right fit, also take a look at whether shared services with a like organization can help both nonprofits thrive. What is your organization excelling at? That could be a chance to expand through a shared service model to bring extra revenue in.
4. Refocus on your core mission
Navigating uncertainty comes down to doing what you can and letting the rest go. Now is actually the perfect moment to stop wasting limited organizational energy on work you’re not good at and refocus on your core mission.
This starts with leadership getting aligned on what your mission should be. Ideally, set aside time for your senior team to meet with your board and reboot your strategic plan. Decide what thriving looks like for your organization, identify blockers and create a roadmap to get where you want to go.
As you do this, drill down on what your team does most effectively. Ask yourself: How can you best serve your mission? You may have to drop a program or sell a building. That’s okay.
(One caveat: Make sure you stay in compliance with your grant funding. Shifts in programmatic work could create compliance or regulatory hurdles if you’re not clear on the rules about how you’re allowed to spend your money.)
Nobody on your board or team has ever been through an experience quite like what’s going on now. That’s okay too.
If you’re willing to be flexible, creative and move with the flow of change, you’ll come out stronger on the other side.
How Wipfli can help
We help nonprofit organizations thrive. Let’s talk about your specific organizational challenges and how we can help you implement a clearer strategy and more effective digital tools to strengthen your financials and deliver on your core mission. Start a conversation.
Let’s navigate 2026 together
