Building Nonprofit Capacity in a Time of High Demand and Funding Uncertainty

Nonprofit leaders are heading into 2026 facing a tough mix of realities: higher community need, more complex policy changes, and less predictable funding. At the same time, staff are stretched thin, and reporting and compliance expectations keep going up, not down.

That is exactly what we tackled in our Built to Serve webinar:

Hosted by Jody Immink, FORWARD’s Director of Capture and Solutions Architecture and a self-described “recovering social worker,” this session unpacked the funding landscape, introduced a practical Operational Readiness Framework, and shared real-world strategies to protect staff, strengthen programs, and build long-term resilience.

Why this conversation matters now

If you are leading a nonprofit today, you are likely feeling at least some of the following:

• Higher community needs than your pre 2020 baseline

• Federal policy shifts, including H.R. 1 and 2025 changes, reshaping safety-net programs

• Shrinking or delayed public funding

• Staff burnout and turnover

• End-of-year reporting and fundraising pressure

• Increased expectations for transparency and outcomes

As Jody shared during the webinar:

“The nonprofits that will thrive in this environment are not just the ones with strong programs. They are the ones that build operational muscle. Operations are mission protection, not overhead.”

This blog recaps the key thought leadership from the session and gives you practical next steps you can take right away.

The 2025 nonprofit landscape: more demand, less predictability

1. Policy changes are reshaping demand

Recent federal policy shifts, including H.R. 1 (“One Big Beautiful Bill”) and other 2025 changes, are altering how safety-net programs, tax incentives, and social supports work.

• Reduced or restricted access to programs like Medicaid, SNAP, and social services means more people fall through the cracks

• When public benefits shrink or eligibility tightens, nonprofits become the de facto safety net

• At the same time, changes to charitable deduction rules may dampen giving from some higher-income donors

The result is simple and serious: more demand and less predictable funding.

Nonprofits step forward, as they always do, but often without new resources, staff, or systems to match the load.

2. Key funding trends nonprofit leaders need to know

During the webinar, Jody highlighted four major trends shaping nonprofit sustainability in 2024 and 2025.

Trend 1: Giving is up, but volatility is rising

• Total charitable giving hit 592.5 billion dollars in 2024 (plus 6.3 percent), but much of that growth came from the stock market and corporate giving

• Small donor counts and retention are declining

• There is a growing gap between major donors and everyday donors

For organizations that rely on broad-based, grassroots giving, this means less stability and more year to year risk.

Takeaway: Diversify revenue and intentionally invest in retaining small and mid-level donors, especially values-driven millennials who expect transparency and impact data.

Trend 2: Rising demand and shrinking public funding

• Eighty five percent of nonprofits expect demand to increase in 2025

• Thirty six percent ended 2024 in deficit

• About half have three months of cash or less

• One in three experienced government funding cuts, freezes, or delays

This creates a dangerous squeeze. More people need help while the most important revenue streams become less reliable.

Takeaway: Financial sustainability cannot be treated as a one time budgeting exercise. It must be managed as an ongoing risk, supported by strong systems and data.

Trend 3: Donors want transparency and outcomes

Across institutional funders, major donors, and even small recurring donors, the pattern is the same:

Donors want proof, not promises.

They expect:

• Outcome data, not just activity counts

• Real-time or timely reporting

• Clarity about how funds are used

• Multi-year strategies and measurable impact

Organizations with strong reporting and data infrastructure are winning trust and funding. Those without it are not necessarily less impactful, but they are less able to show their impact.

Trend 4: Foundation funding is high, but more competitive

• Foundation assets are near record highs

• Many funders are signaling greater selectivity and strategic focus

• There is a shift toward fewer, larger grants, with more rigorous expectations around infrastructure and accountability

• Priority areas like health, equity, and environment are getting increased attention

Takeaway: To stay competitive, nonprofits must show they have the systems, controls, and operational capacity to handle larger, more strategic investments.

What does this mean for your nonprofit?

When you pull these trends together, a clear picture emerges. To thrive in this environment, nonprofits need to:

• Diversify funding and reduce dependency on a single source

• Build reserves where possible

• Strengthen reporting and data practices

• Retain donors at all levels

• Invest in operational resilience

In Jody’s words:

“Resilience is not luck. It is built.”

That is where the Operational Readiness Framework comes in.

What is operational readiness for nonprofits?

During the webinar, Jody introduced a simple and powerful model: the Operational Readiness Framework. It is not about judgment. It is about giving you language to describe where you are today and what to strengthen next.

The 3 levels of operational readiness

1. Foundational

What it looks like:

• Fragmented systems and paper forms

• Spreadsheets everywhere

• Reporting is manual and slow

Risks:

• High staff burnout

• Errors and inconsistent data

• Hard to scale when demand spikes

Next step:

Map your key processes such as intake, service delivery, and reporting, and start centralizing data. Even moving from ten spreadsheets to one master file or an entry-level case management tool can make a real difference.

2. Developing

What it looks like:

• Some automation in place

• Partial data consolidation

• Early dashboards or standardized report templates

Risks:

• Remaining silos and manual work

• Stress during peak reporting periods

Next step:

Standardize workflows across programs and integrate systems where possible so data flows instead of being retyped.

3. Strong

What it looks like:

• Unified data and integrated systems

• Automated workflows for routine tasks

• Real-time dashboards for leadership and funders

Benefits:

• Confident scaling and program replication

• Faster, more accurate reporting

• Staff focused on people, not paperwork

Next step:

Shift from “keeping up” to using data strategically for advocacy, new funding, and smarter program design.

Mini self diagnostic: where are you now?

Ask yourself:

1. How long does reporting take each quarter? Hours, days, or weeks?

2. How many systems or spreadsheets hold critical program or client data?

3. If a key staff member left or went on leave, would processes still run smoothly?

4. How often is your team entering the same data into multiple places?

If your answers suggest long reporting cycles, scattered data, dependency on individuals, or frequent duplicate data entry, you are likely operating primarily in the Foundational or early Developing stage.

That is not a failure. It is a starting point for targeted improvement.

Where nonprofits struggle most, and why it is fixable

Across the governments and nonprofits FORWARD works with, we see the same pain points:

• Data scattered across tools and sites

• Last minute reporting “scrambles”

• Staff time consumed by administrative work

• Difficulty meeting funder data requests

• Inconsistent communication with participants

The good news is that these are operational problems, and operational problems are solvable with the right mix of process, people, and tools.

Two high impact strategies for building capacity

The webinar focused on two practical strategies any nonprofit can start applying, regardless of size or budget.

Strategy 1: Strengthen funder confidence with better data

You do not need a full data warehouse to build funder trust. Start with:

• Timely or real-time reporting on a small set of key metrics

• A simple dashboard with:

  • Number of people served versus goals

  • Key outcomes achieved

  • Basic demographics

• A single source of truth for program or client data

When you can pull accurate numbers quickly and confidently, it:

• Reduces staff stress

• Shortens reporting cycles

• Builds credibility with boards and funders

Strategy 2: Free up staff time with smart automation

Operational readiness is not about fancy tech. It is about removing friction from your staff’s day.

Start by asking:

“What part of your week feels the most repetitive or frustrating?”

Then look at:

• Digitizing intake and eligibility: Move from paper and PDFs to digital forms that feed directly into your system.

• Automating routine communications: Appointment reminders, status updates, “we received your application,” and document reminders.

• Templatizing recurring reports: Build once and reuse often.

Every hour you save with automation is an hour that can go back to direct service, supervision, and strategy.

Case snapshot: how a workforce development council built operational resilience

During the session, Jody walked through an example from a Workforce Development Council (WDC) facing many of the same challenges as webinar attendees.

Before:

• Manual, multi step intake across multiple forms

• Staff reviewing applications in email threads and spreadsheets

• Limited visibility across programs

• Long turnaround times for eligibility decisions

• Disconnected communications, including texts from personal phones

• Reporting took days or weeks and relied on one person’s memory and personal tracking

After moving to a more centralized, structured model:

• Intake became digital and mobile friendly

• Eligibility checks followed standardized workflows

• Communications were automated and tracked in one place

• Referrals to partners were logged and monitored

• Reporting moved to near real-time dashboards with enrollment, outcomes, demographics, and compliance metrics

The shift was not just about adopting technology. It was about building operational resilience:

• Faster service delivery

• Reduced staff burnout

• Improved funder confidence

• Clearer outcomes tracking

• Better experience for program participants and staff

This is what it looks like to move from Foundational to Developing to Strong readiness in practice.

How FORWARD supports nonprofits

FORWARD is a mission driven partner that helps governments, nonprofits, workforce agencies, and philanthropic organizations:

• Launch and manage programs more efficiently

• Reduce administrative burden on staff

• Strengthen data, reporting, and compliance

• Deliver services in ways that are more accessible, human centered, and sustainable

We do this through:

• Digital intake and applications

• Human centered case management

• Automated workflows and communications

• Referral tracking across partners

• Real-time reporting and compliance tools

• Professional services for high volume or complex programs

Our north star is simple:

Technology should make your work easier so your people can do what they do best.

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