Samwise Nonprofits and Charities Newsletter
Saturday, May 16, 2026
Saturday Deep Dive
Today we step back from the daily news cycle and surface the best recent research and long-form analysis on nonprofit impact, philanthropy, and sector policy. Worth a slower read.
One in Three Nonprofits Now Running Deficits as Federal Funding Cuts Deepen Sector Strain
The nonprofit sector entered 2026 under severe fiscal strain, according to the Center for Effective Philanthropy’s State of Nonprofits 2026 report. The share of organizations running deficits climbed to 39 percent, up sharply from 22 percent in 2022, as federal funding disruptions rippled across the sector. Three-quarters of nonprofit CEOs report increased demand for services, yet 29,000 sector jobs were cut in 2025 alone. Government grants represent at least $240 billion annually to nonprofits, and the current administration’s broad reductions are leaving critical gaps that private philanthropy cannot fully fill. Leadership burnout has reached near-universal levels: 95 percent of nonprofit leaders identify it as a major concern. Sixty-six percent of organizations now express serious doubts about their financial stability, raising urgent questions about the sector’s capacity to meet accelerating community need in the year ahead.
Sources: Center for Effective Philanthropy, Fortune
Fund for Shared Insight to Wind Down at June End, Spinning Off Listening Programs to Carry Its Legacy
Fund for Shared Insight, a $78 million philanthropic collaborative, will close on June 30, 2026, after twelve years at the forefront of participatory grantmaking and trust-based philanthropy. Founded in 2014 by the Hewlett, Ford, and Kellogg foundations, the collaborative developed Listen4Good, a feedback tool adopted by more than 1,200 nonprofits to systematically gather constituent voices and incorporate them into program design. Rather than dissolve its programs, the initiative is spinning out two successor efforts—Listen4Good and Listen to Community—designed to continue embedding beneficiary feedback into grant-funded work. Inside Philanthropy’s account describes the collaborative as a model for how time-limited philanthropic vehicles can build durable infrastructure. The closure reflects a broader recalibration among major foundations as they reassess their roles in an increasingly strained and politicized sector funding environment.
Sources: Inside Philanthropy
IRS Moves to Revise Form 990 Disclosure Requirements, Raising Transparency Hopes and Accountability Concerns
The Internal Revenue Service announced in late April that it will revise Form 990, the primary public financial disclosure document for tax-exempt organizations, focusing specifically on government funding flows and fiscal sponsorship arrangements. The move aligns with the SPONSOR Act introduced by Sen. Ted Cruz, which targets fiscal sponsorship as a vehicle for opaque grant-making. Sector advocates broadly support greater transparency but warn the revised form could impose significant new reporting burdens—especially for government-funded nonprofits already stretched thin. A deeper concern, raised by progressive philanthropy organizations, is that expanded disclosure could expose politically unfavored groups to selective IRS scrutiny. Inside Philanthropy identifies five unresolved questions: scope, implementation timeline, enforcement posture, whether change comes via legislation or rulemaking, and the risk of politically motivated targeting. Full implementation is expected to take years.
Sources: Inside Philanthropy
New Bonterra Report Finds $155 Billion in Annual Charitable Giving Goes Unrealized as Donor Engagement Falters
Nonprofit technology provider Bonterra released its 2026 Impact Report this week, finding that more than $155 billion in potential U.S. charitable giving goes unrealized each year. The figure represents the gap between current donation levels—which have remained at roughly 2.5 percent of GDP for decades—and a sector goal of 3 percent of GDP by 2033. The report draws on surveys of nonprofit leaders and donors alongside aggregated data from Bonterra’s network of 213,000 nonprofits, which facilitated $22 billion in giving in 2025. Structural barriers dominate the findings: limited visibility into program outcomes, affordability pressures, and absence of simple mechanisms for long-term engagement. Eighty percent of donors and 65 percent of nonprofit leaders believe the 3 percent target is achievable. The report argues that artificial intelligence and improved relationship-management tools are the most promising levers for closing the gap.
Sources: NonProfit PRO
Curated by JD · samwise.agency
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