What 2026 holds for Nonprofits and NGOs
With over two decades of experience working alongside nonprofits and NGOs, we've learned that predicting the future in this sector is never straightforward, and looking back at my 2024 and 2025 posts, some of my predictions proved fairly accurate while others did not account for just how far the US administration would go in the cutting of foreign aid and development budgets.
In both my previous posts on this topic I mention the “uncertain political climate in the United States” and even though I should probably be not surprised, it is still quite unbelievable to be writing this a few days after the Trump administration have kidnapped (or “arrested”) the president of another country, and is now hinting of a military intervention in Greenland. These are crazy times.
The funding crisis deepens
If 2025 was about scrambling to replace lost funding (whether directly from USAID or indirectly through multilateral organisations like the WHO), 2026 will be about whether organisations successfully pivoted or perished.
Making this crisis deeper, European donors are simultaneously cutting their own aid budgets to fund increases in defense spending. It's sad to write this but Europe is in an arms race. The UK is reducing aid from 0.5% to 0.3% of national income to help reach a 2.5% defense spending target. France cut its aid budget by 35% in 2025. Germany slashed nearly €1 billion from development spending while defense allocations surged.
European defense spending jumped over 30% between 2021 and 2024, driven by the war in Ukraine and quite legitimate concerns about US commitment to NATO. For many European governments, this represents a fundamental reprioritisation. The current security threat, combined with the US administration's rhetoric around Greenland and NATO feels immediate and domestic. Development needs feel distant and deferrable.
Some alternative funding sources are available, but they're unlikely to fully replace what's been lost. Private philanthropy remained steady through 2025, demonstrating commitment despite the global political uncertainty. Yet the scale of these alternatives doesn't match the gap left by both the US and Europe government funding cuts, and they come with their own constraints and priorities that may not align with every organisation's needs.
As well as looking for alternative funding streams, we are seeing many of our clients building alternative business models. Some are developing earned income strategies, others are creating membership models (or monetizing their existing memberships) or offering consultancy services to the private sector.
In 2025, conflicts have been raging at levels unseen since World War II, while global military spending has soared to 2.7 trillion dollars, growing by almost 10%. In 2026, I call on leaders everywhere: Get serious. Choose people and the planet over pain. A safer world begins by investing more in fighting poverty and less in fighting wars. Peace must prevail.
Trust, transparency, and the battle for legitimacy
Perhaps more concerning than funding challenges is the erosion of institutional trust we're all witnessing. Nonprofits and especially NGOs aren't immune to the scepticism that's affecting governments, media and other institutions. Proving impact has always been about satisfying funders, but now it seems to also be about maintaining legitimacy with the public.
This is particularly acute as misinformation and coordinated attacks on nonprofits become more sophisticated, and disinformation becomes more ingrained. Organisations working on climate, health, human rights and democracy are finding themselves targets of deliberate disinformation campaigns. The response can't simply be better communications (although that certainly helps), it requires a fundamental commitment to transparency - how the money is spent.
We're seeing organisations publish not just their successes but their failures, open their financial data completely, and involve beneficiaries directly in governance. This approach is essential for survival. Organisations need to demonstrate authentic accountability, not just compliance with reporting requirements.
AI moves from novelty to necessity (with important caveats)
In my 2025 post, I noted we were seeing "mature AI implementation." Many organisations have used AI adoption for organisational efficiency, but with this adoption the negative concerns around AI are coming into focus.
Firstly, the environmental cost of AI is finally getting serious attention. Organisations are starting to ask harder questions about whether the efficiency gains justify the energy consumption. We're seeing more thoughtful implementations, using AI where it genuinely adds value rather than because it's fashionable. For our sector, which often champions environmental causes, this tension matters.
Secondly, there's growing recognition that AI can amplify existing biases and inequalities. Nonprofits working on social justice are rightly cautious about tools that might perpetuate the problems they're trying to solve. The organisations doing this well are those that couple AI adoption with rigorous equity audits and human oversight.
Thirdly, we're seeing AI used in genuinely innovative ways for social good. From improving early disease detection in low-resource settings to identifying patterns in human rights abuses, the technology is proving its worth when applied thoughtfully. Translation tools continue to improve (the most common AI integration we did in 2025 was AI translations tools), making multilingual communication more accessible. Organisations are using AI to analyse program effectiveness in ways that would have been impossible a few years ago.
The sensible organisations will be the ones using AI to complement human expertise versus those trying to replace it.
The localisation imperative
The shift toward locally-led development that we flagged in 2025 is accelerating. This move seems to be around streamlining and effectiveness. Communities understand their own issues better than outsiders ever can and local organisations are more trusted, more sustainable, and often more cost-effective.
For international NGOs, this creates an identity crisis. What's their role if local organisations should be leading? The answer seems to be about shifting from delivery to enablement. The successful international NGO provides funding, technical expertise, and global advocacy, while ceding decision-making and implementation to local partners. This last year at Liquid Light we've worked with several nonprofits who are doing exactly this, restructuring their digital platforms, content, and communications to reflect this fundamental shift in how they operate.
Climate isn't a sector, it's everything
By 2026, the idea that climate change is a separate issue tackled by environmental organisations has completely collapsed. Every nonprofit, regardless of their focus area, is dealing with climate impacts. Health organisations are responding to disease pattern changes. Education programs are adjusting to climate-displaced populations. Economic development work must account for climate-vulnerable livelihoods.
This mainstreaming of climate is changing organisational strategies across the sector. It's also creating opportunities for new kinds of partnerships and integrated approaches. The artificial boundaries between issue areas are dissolving, replaced by more holistic problem-solving.
For organisations, this means building climate literacy throughout their teams and integrating climate considerations into all planning. It also means being prepared for the increased frequency of humanitarian crises and the strain this places on resources. Sadly, with the US recently pulling out of the UN Framework Convention on Climate Change (UNFCCC), this situation is only going to get worse.
Digital fatigue and the search for meaningful connection
Something I didn't anticipate in my earlier posts, but a topic I have been hearing more of lately is digital fatigue. After years of digitisation, and the post COVID shift to remote working, there seems to be a hunger for more genuine human connection. I am seeing virtual events becoming shorter and more focused and digital campaigns being designed for genuine interaction rather than just passive consumption.
We're also seeing a reassessment of what constitutes digital success. Reach and engagement metrics remain important, but organisations are looking deeper at quality of connection and real-world impact. A smaller, more engaged community often proves more valuable than large but passive audiences (and we see this with our membership clients) and we have seen our clients put more effort into cultivating their communities.
The talent challenge
Nonprofits have always struggled to compete with private sector salaries, and I believe this struggle will become more pronounced in 2026. Younger professionals are increasingly demanding flexible work arrangements, genuine work-life balance, and to work with organisations that practice the values they preach.
At the same time, the skills required are changing rapidly. Digital literacy is of course the baseline but data analysis, strategic communications, and partnership development are increasingly essential. Yet many organisations lack the resources to upskill existing staff or compete for external talent.
The organisations navigating this successfully are those getting creative: developing genuine career pathways, creating cultures of learning, offering flexibility and autonomy, and building meaningful connections to missions that go beyond rhetoric.
Looking ahead
As we move into 2026, the nonprofit sector faces a challenging period. Political hostility, economic uncertainty, climate impacts and technological disruption are converging in ways that could overwhelm many organisations.
I remain optimistic and the organisations we work with are nothing if not resilient. They've navigated previous crises and emerged stronger. The current challenges are driving innovation and forcing necessary evolution.
The successful nonprofit of 2026 will be fundamentally different from its predecessors: more adaptable, more transparent, more locally rooted, more digitally sophisticated, and more integrated in its approach to complex problems. It will be smaller in ego but bigger in impact, more collaborative and less territorial, more focused on genuine effectiveness and less on organisational survival. For organisations willing to embrace genuine transformation, 2026 offers real opportunities to build something more effective and more sustainable than what came before.
Get in touch to discuss how we can support your organisation through these transitions and help build the digital infrastructure you need for 2026 and beyond.
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Owen Priestley
Strategy Director
