Report: Half of nonprofit execs worried about finances before lockdown

Nearly half (47%) of nonprofits do not have the adequate funds to execute their programs and services during 2025. This lack of funding has driven anxiety within the overall industry, with 50% of respondents to a survey expressing concern about their current financial situation, up from 38% last year. 

For the second consecutive year, individual contributions — the single largest source of dollars given to charitable organizations — have declined. Due to a strong economic market in 2024, however, 56% of organizations reported a net increase in income. 

That’s just some of the data released in the 2025 State of the Nonprofit Sector Report released by accounting and advisory firm Forvis Mazars. The annual report benchmarks the responses of 230 nonprofit professionals from various organization sizes and types across the country, from small startups and midsize groups to large educational and health institutions. It was conducted in late 2024. 

Surveys and interviews were used to gather information on tax-exempt organizations’ finances, staffing, governance, technology, and programs. Survey distribution and participation included individuals and organizations representing diverse backgrounds, interests, and regions. Participants were from organizations in 34 states, with the biggest representation from Texas, Missouri, New York, Indiana and Ohio. 

There are more than 25 categories of 501(c) tax-exempt organizations in the survey results, with two divisions — charitable (donations are tax-deductible) and noncharitable. Information in the study is from leaders primarily representing 501(c)(3) nonprofits. 

“While a resilient 2024 economy strengthened the financial position of some nonprofits, rising costs and the expiration of pandemic-era funding have fueled uncertainty,” Dan Prater, senior managing consultant with Forvis Mazars and author of the report, said in a statement. “Nearly half of nonprofits are increasingly concerned about their financial future.” 

The transition of younger staff into leadership positions “as well as recruiting for higher-level roles remains a struggle,” according to Prater. Roughly 77% of nonprofits reported that they are finding it difficult to recruit senior leadership, while two-thirds of respondents revealed they do not have a leadership training or mentorship program currently implemented. 

Additional findings: 

• 65% of respondents said their organizations are hampered by staffing shortages 

• Three out of four nonprofits reported staff elimination and reduced programs and services 

• 77% of respondents reported that they had an increase in demand for their programs and services 

• 87% of nonprofits saw an increase in requests for mental health programs and services 

On the revenue front, 15.37% on average came from individual donor contributions, with fees for service and programs a close second at 14.9%. Foundation grants came in at 13.72%. Special events, government grants, investments and corporate giving ranged from 10.71% to 10.25%. All other sources were in the low single digits. 

Cutting travel and use of contract workers and interns were the top ways to reduce spending, 47.6% and 41.8% respectively. Use of volunteers was at 39.53%, tied with eliminating some staff positions. 

“With ongoing uncertainty, nonprofits are finding creative ways to manage rising operational costs while staying true to their missions. Many are strategically reducing travel, outsourcing professional services, and leveraging the talents of interns and volunteers to maximize resources. Beyond immediate benefits, these efforts also play a crucial role in cultivating future leaders and dedicated supporters, who often become long-term contributors,” concluded Prater.