Nonprofit organizations across the U.S. are facing rising burnout, worsening financial stress and a tougher funding environment as demand for services continues to climb, according to a new report from the Center for Effective Philanthropy, published this week.
The report, titled "State of Nonprofits 2026: What Funders Need to Know," surveyed 380 nonprofit CEOs in February and found that 46% said their own burnout was "very much a concern," up from 29% in 2025.
Nearly three-fourths of nonprofit leaders said their organizations experienced increased demand for services since January 2025, while almost 60% reported it had become harder to secure foundation grants.
Funding Pressure Mounts
More than 40% of nonprofit CEOs said they had experienced reduced funding from foundations since January 2025, while over a third reported cuts in government funding from federal, state or local sources.
The report defines the "current context" as federal legislative actions, executive orders and budget decisions introduced starting in 2025 that could have broad effects on nonprofits and philanthropy.
Earlier this year, President Donald Trump proposed a 2027 budget that would increase defense spending while cutting non-defense discretionary programs by 10%, including reductions tied to housing, healthcare and environmental initiatives.
The CEP report found that 39% of nonprofits operated with a budget deficit in fiscal 2025, up from 22% in 2022.
Organizations that lost government funding were also more likely to reduce staffing and services, according to the report.
Strategic Shifts And Philanthropy
Many nonprofits said they are responding by cutting costs, freezing hiring, pursuing new donors and drawing from reserve funds. About 20% said they are considering using AI tools to lower operating expenses.
The report also highlighted increased collaboration across nonprofits, including shared staffing, fundraising partnerships and operational cost-sharing agreements.
The findings come amid broader discussions around philanthropy and nonprofit funding. Last year, Billionaire philanthropist MacKenzie Scott, the ex-wife of Amazon (NASDAQ:AMZN) announced more than $7 billion in annual donations to nonprofit organizations worldwide, while Tech Billionaire Bill Gates, Chair of the Gates Foundation warned that abrupt government aid cuts could severely impact humanitarian and healthcare programs globally.
The report said many nonprofit leaders remain committed to their missions despite growing uncertainty and financial strain.
Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.
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