Nonprofits in 2026: Clear Headwinds, Real Momentum, and Why I’m Confident in What Comes Next

by Casey Hines, Executive Director

On January 5, I stepped into a new role as Executive Director at BrightVine Solutions. In this role, I intend to advocate for the nonprofit sector with clear-eyed realism and a bias toward action.

The nonprofit industry is operating in a moment of tension: demand is rising, costs remain sticky, and the political environment is volatile, yet we are also seeing strong signals of resilience, more innovative fundraising, and a more mature approach to digital operations. If you lead a nonprofit, fund one, volunteer with one, or work alongside one, here’s what I believe is most true right now, and why I’m optimistic.

The state of the sector: pressure is real, but so is performance

Let’s start with the headline many people miss: giving has not collapsed.

• U.S. charitable giving reached an estimated $592.5B in 2024, increasing 5.5% in current dollars and 2.7% adjusted for inflation, which marked an inflation-adjusted gain after several challenging years.

• Reporting on the same Giving USA results emphasized that giving in 2024 outpaced inflation and reflected broad-based gains across several cause areas. 

That’s not the whole story, of course. The more accurate statement is this: the sector is bifurcating. Organizations with strong operating discipline, clear messaging, and modern engagement engines are finding traction; those relying on legacy approaches (or chronically underinvesting in infrastructure) are feeling the squeeze.

The headwinds: what’s making leadership harder right now

Budget compression and “cost growth > revenue growth.”

Many nonprofits are experiencing the most frustrating dynamic in operations: costs rising faster than funding, which shows up as frozen vacancies, delayed initiatives, and fragile cash flow.

Nonprofit Finance Fund’s 2025 survey underscores this pattern, highlighting widespread burnout, staffing challenges, and concerns about government funding pullbacks while costs climb. 

Workforce constraints aren’t easing fast enough.

This is not a “nice to have” issue. It's capacity, service delivery, and institutional knowledge.

The National Council of Nonprofits has consistently documented the magnitude of vacancy challenges, with survey findings showing high vacancy rates and increased service demand/longer waiting lists tied to staffing constraints. 

Political climate risk is now an operating reality (even when you avoid politics)

Nonprofits don’t need to be partisan to be impacted by politics. Funding streams, regulatory shifts, community tension, and staff safety are increasingly part of the environment.

The Center for Effective Philanthropy’s State of Nonprofits 2025 report captures this directly: nonprofit leaders describe a polarized and unpredictable climate affecting funding, mission, and communities. It also quantifies the specific elements leaders cite most often: outcomes of the 2024 federal elections (71%), changes in federal government funding (62%), and political divisions (50%) among the most frequently reported elements affecting their work.

The trends: what’s changing (and what’s working)

Fundraising is now digital-first (but not digital-only)

The sector has moved beyond “we should do digital” to “digital is embedded in how we operate.”

Recent observations and studies have shown:

• 85% of organizations reported changes in fundraising strategies

• 90% use one or more digital channels

• Many are increasing investment in fundraising, marketing, and communications, and diversifying channels. 

This is not about chasing shiny objects. It’s about meeting supporters where they are, and running modern, measurable programs.

Donor retention remains the structural challenge (and the opportunity)

Across the industry, acquisition is expensive; retention is leverage.

Fundraising Effectiveness Project reporting continues to show retention pressure and a weak new-donor pipeline. For example, FEP’s benchmarking highlights year-over-year softness in retention and meaningful declines in new donor retention in recent cycles.

The implication: nonprofits that build lifecycle journeys, recurring-giving motions, segmented stewardship, and faster feedback loops will stand out from the pack.

AI is moving from experimentation to an operating model.

AI is not replacing mission work; it’s increasingly augmenting it: drafting, summarizing, coding, analyzing, routing, personalizing, and automating.

The risk is a widening “capacity gap” where underfunded organizations cannot sustainably adopt modern tooling. Bridgespan has been explicit about this: AI can unlock efficiency and scale, but many nonprofits lack the funding and infrastructure to do it responsibly, calling for funders to treat technology as a core operating cost. 

Cybersecurity and trust are now frontline issues.

As nonprofits digitize and data becomes central to engagement, the threat surface grows. Sector-oriented reporting in 2025 continues to emphasize increasing cyber risk, including mission-driven organizations becoming targets because of the data they hold and their public profiles. 

This matters because trust is not just brand; it’s deliverability, donation conversion, volunteer confidence, and staff safety.

Why I’m confident: Nonprofits are adapting faster than the narrative suggests

When I speak with nonprofit executives and advancement leaders, I see pragmatic innovation:

• More rigorous scenario planning and cash forecasting

• A shift toward integrated growth engines (development, marketing, data, and programs)

• A stronger push for unrestricted support and operational resilience

• Increasing openness to modern platforms and shared services when it improves mission outcomes

And despite volatility, the sector continues to attract philanthropic confidence, including high-profile examples of large-scale, unrestricted giving that reinforce the trend toward trust-based philanthropy.

The “technology investment in a downturn” argument (in plain terms)

If budgets are tight, why invest in technology?

Because in many nonprofits, the choice is not “tech vs. mission.” It’s tech as a mission force multiplier (and sometimes as a mission protector).

Well-targeted investments can:

• Reduce manual effort and rework

• Improve retention and recurring revenue

• Increase campaign speed-to-market

• Strengthen reporting for funders and boards

• Reduce compliance and cyber risk

• Prevent burnout by fixing broken workflows

The critical point: technology spend must be tied to outcomes, not features. The organizations that win will treat tech as an operating system: data quality, governance, process, enablement, and adoption, not just implementation.

What I plan to focus on as I step into this role

As BrightVine’s Executive Director, my lens is straightforward: help organizations deliver more mission with less friction.

That means being opinionated about a few things:

• Invest in the data foundation (because personalization, AI, and performance reporting all depend on it)

• Design for retention, not just acquisition

• Fund the full cost of operations, including security, training, and the systems staff actually use

• Simplify the tech stack where possible, integrate where necessary, and automate aggressively (where safe)

• Tell the impact story with credibility, measurement that’s honest, timely, and decision-useful

Closing thought

The nonprofit sector is being asked to do more in a complex environment, economically, socially, and politically. But the capacity, ingenuity, and commitment I see across the field are real. I’m confident not because headwinds are disappearing, but because the sector is learning to operate with modern discipline while staying deeply human.

If you’re a nonprofit leader navigating these dynamics, or a funder, board member, or partner shaping what’s next, I’d welcome the conversation.