As 2026 approached, non-profit organizations face a rapidly changing environment. Economic volatility, evolving donor expectations, technological advancement, and regulatory changes will all have a significant impact on non-profit sustainability and growth.

Below, CDS compiled the latest 2026 sector outlook data and offers guidance to help your organization navigate what’s ahead.

Key Trends for Non-profits in 2026

1. Giving Growth is Modest but Stabilizing

2026 Outlook: The Lilly Family School of Philanthropy’s 2024 Philanthropy Outlook forecasts that total giving will grow modestly in both 2025 (+2.8%) and 2026 (+3.2%), as inflation eases and the economy stabilizes. Giving by individuals is expected to rebound; however, non-profits may still face increased competition for donor dollars, particularly from high-net-worth individuals and donor-advised funds (DAFs).

CPA Insight:

• Prioritize donor retention strategies and stewardship.
• Plan budgets conservatively, expecting modest growth.

2. Grant Funding and Government Support: Cautious Optimism

2026 Outlook: Most industry forecasts anticipate that foundation and government funding will remain steady or rise modestly, though recent fraud allegations in parts of the sector have led to increased caution. Funders are intensifying their review of grantee financial controls and impact reporting, and some may redirect or delay funding in areas of heightened concern.

CPA Insight:

• Prepare for more rigorous due diligence and reporting requirements.
• Demonstrate strong internal controls and transparent, measurable results to remain competitive for grants.

3. Technology and AI Integration Accelerates

2026 Outlook: McKinsey’s 2024 nonprofit tech trends indicate that AI-powered donor management, digital fundraising, and automated back-office tools will become mainstream by 2026. Those investing early will see increased efficiency and engagement.

CPA Insight:

• Assess data privacy and cybersecurity risks as you adopt new tools.
• Budget for cloud-based accounting or CRM upgrades.

4. Workforce & Talent: Hybrid is Here to Stay

2026 Outlook: The Non-profit Times’ 2025 nonprofit workplace projections note that hybrid and remote work models will be the norm, with a focus on flexible benefits and upskilling. Attracting and retaining talent—especially for fundraising and finance roles—remains a top challenge.

CPA Insight:

• Benchmark compensation and benefits to remain competitive.
• Continue offering professional development to retain talent.

5. Compliance: Increasing Scrutiny

2026 Outlook: The IRS is expected to continue its focus on digital filings, timely Form 990 submissions, and transparency. States may expand registration and compliance requirements, particularly for organizations soliciting donations online.

The IRS is advancing a fully digital environment by expanding access to exempt organization data, improving transparency and oversight. Timely Form 990 filing remains a priority, with a focus on organizations at risk of auto-revocation. States may also expand registration requirements for online fundraising, though some offer safe harbor thresholds, such as Minnesota’s $25,000 limit before registration is required.

CPA Insight:

• Implement calendar reminders and compliance checklists.
• Perform a compliance audit annually.

Funding in Small & Regional Markets: 3 Key Adjustments

1. Less Predictable Government and Foundation Funding

• Local Governments:

Local government budgets are more sensitive to tax base changes. If local sales/property tax revenues decline, grants to non-profits can be cut or paused with less notice than at the state or national level.

• Regional Fraud Impact:

Fraud or mismanagement by a local non-profit can cause a significant chilling effect on local funders, sometimes affecting unrelated organizations.

2. Increased Competition

• With fewer available grants and donors, competition among non-profits is higher. Funders may become more selective, especially after regional fraud incidents or economic downturns.

3. Relationship-Driven Funding

• In small markets, personal relationships and local reputation play a larger role. Transparency, collaboration, and visibility in the community are crucial for remaining a “trusted grantee.”

Small Market CPA Advice:

• Stay proactive in communication with local funders and stakeholders.
• Strengthen your financial and governance practices to reinforce trust.
• Explore new partnerships and diversify your funding sources to enhance resilience in a changing local landscape.

The next two years will test non-profit adaptability, resilience, and innovation. Organizations that embrace technology, commit to transparency, and focus on team and donor engagement will be best positioned for success.

CDS is ready to help you plan, comply, and grow.

Contact one of our experts at (888) 388-1040 for guidance on audits, financial planning, taxes, consulting, and compliance strategies tailored to your mission.

References:
• Lilly Family School of Philanthropy: 2024 Philanthropy Outlook
• Candid: 2024 Philanthropy Forecast
• McKinsey: Nonprofit Digital Transformation
• The Nonprofit Times: Workforce Projections for 2025
• BDO Nonprofit Standards Benchmarking Survey 2024
• National Council of Nonprofits: Local Nonprofit Trends
• Johns Hopkins Nonprofit Economic Data Project: Rural Nonprofit Impact
• Candid: Community Foundation Trends