The 2026 Charity Funding Outlook

There is good news in the 2025 giving figures, and it should not be explained away. Charitable giving grew faster than inflation. But the distance between the strongest and weakest sources matters more to an individual organization than the national average.

Bequests rose sharply; individual giving grew much more modestly; corporate giving was effectively flat. A charity supported by a broad base of individual donors is therefore reading a different outlook from an institution receiving large estates. Both belong to the same sector, but they cannot build the same plan from its headline.

The mistake would be to turn an exceptional year for a volatile source into an ordinary assumption for the next budget. The more useful reading is that generosity remained strong, while the sources carrying growth gave leaders different degrees of predictability.

More foundation giving is welcome. It creates reason to look outward, renew conversations and reconsider where support might come from. What it does not do is remove the hard choices inside a grant pipeline: which opportunities deserve scarce staff time, which relationships can develop, and which awards would actually strengthen the organization.

Giving USA’s estimated 3.0% real increase in foundation giving is a positive backdrop, not a promise of easier access. GrantStation’s research shows how sharply reported awards differ by organizational scale. A small organization and a large institution may be searching the same broad funding landscape without having the same opportunities within reach.

The recipient trends below offer another useful signal, but not a shortcut. Growth in giving to education or health does not identify the funders active in your geography, the size of organization they support or the costs they will cover. These categories include giving from all private sources, not grants alone.

For leaders, the more consequential distinction is between an award worth winning and an award the organization can afford to deliver. A restricted grant may advance important work while leaving supervision, systems or the gap before payment unfunded. That does not make it a bad grant. It makes its terms part of the funding decision, not an administrative detail to resolve after the celebration.

A successful fundraising year can make a participation problem harder to see. When larger gifts close the gap, the organization can reach its target without rebuilding the relationships that will support future years. The income is real. So is the question of what comes after it.

That tension sits at the center of FEP’s 2025 results: dollars raised increased while donor counts fell for a fifth consecutive year. The decline in participation has slowed, which is encouraging. But losing donors more slowly is not the same as bringing them back, and a stronger revenue line cannot answer that question on its own.

Retention offers a clue about where the work lies. FEP found improvement among repeat donors but little progress among new ones. The first gift is therefore better understood as the beginning of a relationship than as a completed acquisition. Whether someone gives again tells a different story from whether a campaign persuaded them to give once.

This is why donor health belongs in the leadership conversation, not only in a fundraising dashboard. A plan built on deeper support from fewer people may be entirely deliberate. It should not happen unnoticed. Read participation, conversion and gift value together so that this year’s success does not obscure the work of building next year’s base.

A significant gift can change what a nonprofit is able to imagine. It can make a program possible, give an ambitious plan credibility or create time to build something lasting. The lesson of 2025 is not to become suspicious of that opportunity. It is to understand what happens when the plan starts to depend on it.

FEP attributes almost all of its reported fundraising growth to major and supersize donors. Blackbaud finds a similar divide in gift-band revenue: higher-value giving grew while smaller-gift revenue declined. These are separate datasets, but they point toward the same planning tension. Stronger results can arrive without a broader foundation of support.

Other evidence reinforces the importance of high-value relationships without making them predictable. The Bank of America study shows substantial giving by affluent households in 2024. Giving USA’s strong 2025 bequest growth shows the potential of another high-value channel, while its warning about volatility is a reminder that a large gift and a repeatable source of income are not the same thing.

The practical response is not to choose between major gifts and broad participation. It is to cultivate significant relationships while keeping sight of what each expected gift is being asked to fund. A conversation, a commitment and cash received represent different levels of confidence. The operating plan should reflect those differences.

We should also resist a larger claim than the evidence supports. These studies do not establish that every nonprofit has become more concentrated. They establish a reason to ask the question. Your own records must show how much would change if a leading donor renewed later, gave less or did not renew at all.

This is where the apparent contradiction in the research starts to make sense. Giving can grow nationally while an organization struggles to keep a service running. The money may be going somewhere else. It may be restricted to a different purpose. Or it may arrive too late to meet the costs already committed.

The operating-condition studies bring that gap into view. CEP found that 69% of nonprofits experienced cuts from at least one source in 2025, while 65% reported rising demand. In NFF’s separate survey, more than half of respondents had three months or less cash on hand. These findings do not cancel out the growth in charitable giving. They show why growth alone is an incomplete measure of organizational stability.

Public funding makes the picture more complicated still. Urban’s research describes how early-2025 government funding disruptions widened the gap between demand and the ability to respond. A stronger year for private giving does not automatically replace a disrupted public commitment, for the same organization, on the same timetable.

Flexibility offers part of the answer, but the terms matter. GEO found that most grantmakers offered some multiyear support and some general-operating support. Exponent found that only 28% of its lean-foundation respondents offered the combination: multiyear general-operating support. Different samples prevent a direct comparison, but the distinction is important. Funding can last several years without covering the organization’s underlying costs.

For leadership, that changes the conversation from “How much have we raised?” to “What can we responsibly commit to?” A one-time restricted award, an unrestricted renewal and an expected major gift may contribute the same amount to a headline total while giving the organization very different choices.

The five dimensions below are our way of making those choices explicit. They are not a score or a new research finding. They are a practical lens for judging whether the funding plan can support the promises being made to staff, partners and the people the mission serves.