National Trends, Local Watch
Nonprofits Under Pressure
Across the country, nonprofit organizations are confronting a cascade of financial stressors, according to the 2025 State of the Nonprofit Sector Survey released last week by the Nonprofit Finance Fund (NFF). The survey is widely cited as a barometer of US nonprofits' programmatic, operational, and financial health. The report reveals that more than one-third of nonprofits ended 2024 with an operating deficit—the highest rate in a decade—and many are struggling with cash flow, government funding instability, and rising demand.
Key findings include:
- More than 50% of nonprofits have three months or less of cash on hand.
- 84% of those reliant on government funding expect cuts or delays.
- 86% are facing cost increases due to inflation.
- 80%+ have seen demand for services rise, especially in areas like housing and mental health.
Jen Talansky of NFF called the situation “a perfect storm,” where increased costs and lagging funding have pushed many organizations to the brink. Annie Chang, another NFF leader, emphasized that “the dollar isn’t going as far,” warning of a “very precarious moment” for the sector.
At PACF, we are paying close attention. While national data offers a barometer, we also see how these challenges are unfolding locally, whether in delayed public contracts, resource strain, changes in local funding priorities, or staff burnout. The resilience of our local nonprofits is remarkable, but resilience without resources is not sustainable.
As we continue to listen, invest, and adapt, this report reinforces the importance of strong, flexible, community-based funding. Our partners are on the front lines. We are working to ensure they are not facing the storm alone.
Download the full report to see recommendations for nonprofits, government, and philanthropic funders here.