Samwise Nonprofits and Charities Newsletter
Wednesday, May 13, 2026
Survey Finds 39 Percent of Nonprofits Running Deficits as Federal Actions Deepen Sector Crisis
The share of nonprofits running operating deficits rose to 39 percent in 2026 — nearly double the 22 percent recorded in 2022 — according to the “State of Nonprofits 2026” report released Tuesday by the Center for Effective Philanthropy. The study, drawing on surveys of 380 nonprofit leaders conducted in February 2026, found that 66 percent of respondents have concerns about their organization’s financial stability, and that the sector eliminated approximately 29,000 jobs in 2025 — more than five times the prior year’s rate. “The current crisis facing nonprofits is unlike anything I have seen in my 25 years working in philanthropy,” said CEP President Phil Buchanan, who called for immediate action from funders.
Sources: NPR
As Federal Funding Shrinks, Demand for Nonprofit Services Has Surged 73 Percent, New Survey Shows
Almost three-quarters of nonprofit leaders surveyed in February 2026 report that demand for their organizations’ services has increased over the past year, according to the Center for Effective Philanthropy’s new report released Tuesday. Food banks, homeless shelters, immigrant aid groups, and behavioral health providers are among those seeing the sharpest increases in demand — driven by rising inflation, SNAP benefit cuts, and the withdrawal of other federal safety net programs. Many organizations are simultaneously cutting staff and programs, forcing them to turn away people seeking help. The compounding pressure threatens the long-term viability of organizations that communities depend on.
Sources: Axios
Nonprofit Workers Report Widespread Burnout, Fear, and Low Morale as Sustained Federal Pressure Takes Its Toll
A new survey from the Center for Effective Philanthropy, released Tuesday, paints a stark picture of workplace conditions across the nonprofit sector. Beyond financial strain, the study of 380 nonprofit leaders found a dramatic deterioration in staff morale, with leaders reporting surging burnout, pervasive fear, elevated stress, and a corrosive atmosphere of uncertainty. Federal investigations, congressional hearings, and broad allegations of fraud or domestic terrorism — which the sector categorically denies — have created an environment that is affecting staff retention and recruitment. The NonProfit Times noted that these conditions threaten organizational capacity precisely when community need is at its highest.
Sources: The NonProfit Times
CEP President Calls on Foundations to Give at Significantly Higher Rates as Nonprofits Face Existential Threat
Accompanying Tuesday’s release of its “State of Nonprofits 2026” report, the Center for Effective Philanthropy issued an urgent call to private foundations and individual donors to substantially increase their giving. CEP President Phil Buchanan stated that nonprofit leaders are having more difficulty obtaining foundation funding than in prior years, even as government funding declines simultaneously. He urged foundation leaders to “seriously consider giving at a significantly higher than typical rate.” The report notes that at least 35 philanthropies have signed the CHANGE Philanthropy Level Up pledge, committing to increase grantmaking budgets by 20 percent or raise payout rates to 8 percent or above for at least two fiscal years.
Sources: PR Newswire
DOGE Grant Terminations, Federal Funding Freezes, and Tax-Exempt Threats Are Driving Nonprofit Sector Toward Collapse
The Center for Effective Philanthropy’s 2026 survey identifies the specific federal actions driving the nonprofit sector’s crisis: a broad funding freeze in early 2025, DOGE-directed review and termination of federal grants, executive orders targeting specific causes, federal investigations and congressional hearings, and threats to revoke organizations’ tax-exempt status. The administration has also made what the sector describes as unfounded allegations of fraud and domestic terrorism against nonprofit organizations. CEP Vice President of Research Elisha Smith Arrillaga noted that these actions, taken together, have created conditions of fear and financial uncertainty that are forcing some nonprofits to suspend programs or close entirely.
Sources: NPR
Curated by JD · samwise.agency
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