Survey: US Nonprofits at Critical Point as Funding for Community Needs Falters

Nonprofit Finance Fund (NFF) has released the results of a survey of the nonprofits that drive social and economic well-being in neighborhoods across the country. The State of the Nonprofit Sector Survey comes amid inflation, uncertainty, and federal government funding pullbacks that impact education, healthcare, affordable housing, arts and culture, and more. The free survey report includes detailed financial and operational data from 2,206 nonprofits and is designed to guide funding and advocacy decisions at this crucial time.

The survey reveals worrying financial trends, and many nonprofit leaders voiced acute concerns. One survey respondent from New Hampshire said, “Many of the food insecurity resources are being cut. There will be more demand put on organizations like ours to help make up the difference. This is not sustainable for the long term without additional funding sources.”

“Nonprofits are the infrastructure that we rely on to meet everyday needs and epic challenges, and investments in this infrastructure yield sustained and substantial impact,” said Elise Miller, NFF’s Senior Director of Community Engagement and lead survey report author. “Nonprofits are also employers, connectors, and advocates. We all have a stake in keeping this infrastructure strong.”

Key findings show tension between the rising demand for services and growing financial constraints:

• 85% of survey respondents expect service demand to increase in 2025.
• 36% ended 2024 with an operating deficit, the highest in 10 years of NFF’s survey data.
• 86% said high costs due to inflation have impacted their organizations and clients.
• Over half of survey respondents (52%) have 3 months or less cash on hand, and 18% have one month or less cash on hand.
• 84% of respondents with government funding expect cuts to that funding.

“We are at a moment of reckoning in this country, determining what promises we make to each other and to future generations,” said Aisha Benson, President and CEO of NFF. “Will we protect and nurture our resources, or run them into the ground to enrich a few? Nonprofits are resilient and responsive and know how to stretch a dollar. And those should be reasons to invest more in these organizations, not excuses for perpetual underfunding and outsized demands.”

Nonprofits employ about 10 percent of the US private workforce. They contribute $1.4 trillion to the economy each year. While they are essential to everything from disaster recovery to affordable childcare, many operate under strict financial constraints.

• 62% of survey respondents said building community wealth and well-being is a major focus of their work; 54% said addressing economic inequality is a major focus.
• Only 41% of survey respondents are able to pay all full-time staff a living wage.
• Only two-thirds offer health insurance; this drops to 12% for organizations with annual budgets of less than $250,000.

The last time NFF conducted this survey (2022), nonprofits were overall in better financial shape. The COVID pandemic and calls for racial justice prompted more flexible funding and major public and private investments; that support is now waning. One hundred sixty-three respondents took the survey in both 2022 and 2025, allowing for a direct comparison of their financial situation over time. The trends among these 163 are consistent with overall findings:

• 37% of repeat respondents operated at a deficit in 2024, significantly up from 13% in 2021.
• The percentage of repeat respondents with six or more months of cash on hand dropped from 36% to 26%.

“Our Board has officially requested a plan for a 30 percent cut to personnel and services, which is not cutting fat – it’s muscle and bone,” said one California human services nonprofit.

Despite significant financial pressures, nonprofits are deeply rooted in the communities they serve and are expanding programs and addressing shifting community needs.

• 63% expanded their programs or services in 2024.
• One-third (32%) of surveyed nonprofits said their leader has lived experience representative of the communities their organization serves.
• Half (51%) said they solicited and acted on community feedback in 2024 to shape their programs and services.

One Midwest nonprofit shared that it “helped 38 households become first-time home buyers, even though the economic conditions and housing market were extremely challenging. We are desperately seeking alternative funding sources to give us more time to figure out a new strategy … if we lose federal funding, even though it’s only about one-third of our revenue, it pulls a thread that unravels our entire system.”

Access the "State of the Nonprofit Sector Survey" here.

Source: Nonprofit Finance Fund

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