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What’s Keeping Nonprofit Leaders Up at Night Right Now? (+ Introducing Our New Podcast, Changemaker Conversations!)

By Alyssa Conrardy

APPLE PODCASTS | SPOTIFY

We’re thrilled to announce the launch of Changemaker Conversations, a podcast designed specifically for nonprofit CEOs, executive directors, and senior leaders who are ready to shake things up and redefine what’s possible in the sector.

After years of hosting in-person Changemaker Conversations events with nonprofit leaders in Chicago (pre-pandemic), we’re bringing these valuable discussions to a podcast format that can reach leaders anywhere. Every other week, we’ll publish a new episode diving into the challenges and opportunities facing nonprofit leaders today, with candid conversations between ourselves and with innovative nonprofit leaders who are totally changing the game.

For our inaugural episode, we’re tackling a topic that’s on everyone’s mind: what’s keeping nonprofit leaders up at night right now? 2025, you’re giving us some serious nightmares. Let’s dive in!

The nonprofit landscape in 2025 has been anything but smooth sailing. From sudden federal funding freezes to market volatility affecting donor confidence, nonprofit leaders are navigating unprecedented challenges while trying to maintain their organizations’ impact and staff morale.

As strategic advisors to nonprofits across the country, we’ve had countless conversations with leaders who are feeling the weight of these challenges. In this article, and in this week’s episode of Changemaker Conversations, we’ll explore the four biggest issues keeping nonprofit leaders awake at night—and more importantly, share practical solutions to address them.

Challenge #1: Funding Uncertainty

Funding uncertainty has reached new heights in 2025. The year started with a jolt when the Trump administration announced a federal funding freeze at the end of January, shortly after taking office. While the full pause lasted only a few days before being pulled back, the effects continue to reverberate throughout the sector.

It’s becoming increasingly clear that organizations addressing diversity, equity, and inclusion, environmental causes, and what some policymakers have labeled as “woke” issues are at greatest risk. However, the definition of what fits into those categories remains troublingly broad and ambiguous.

The instability isn’t limited to federal funding. Market volatility is causing private funders to rethink their strategies and priorities. Foundations and family foundations that rely heavily on the stock market and endowments are becoming more cautious about making significant investments precisely when nonprofits need them most.

Individual giving is also being affected. When donors see their investment portfolios fluctuating wildly, their confidence in making charitable donations often wavers—even when their commitment to the causes remains strong.

Solutions for Funding Uncertainty

The most effective nonprofit leaders are responding to these challenges by:

  1. Diversifying revenue streams – This means not just having different types of funding sources (government, individual, foundation), but also structuring how that money is used across multiple programs within the organization. Rather than replacing one revenue stream with another, think about diversification as a growth strategy.
  2. Focusing on your locus of control – Consider developing social enterprise or other earned revenue models where you have more direct control over income generation.
  3. Strengthening your case for giving – Use clear messaging to communicate to donors and supporters why your work is more critical than ever during these challenging times. Be frank about current conditions and tie them directly to why your organization needs support now.

Challenge #2: Staff Morale and Retention

Coming on the heels of COVID-19, years of social unrest and the impact of another election, nonprofit staff are experiencing another wave of uncertainty and burnout. The sector is seeing concerning trends:

  • One in three nonprofits is struggling with retention and turnover
  • 59% of nonprofits report it was significantly harder to fill staff positions in 2024 than in previous years
  • Many employees are leaving not just for other nonprofits but exiting the sector entirely

Wage pressure is unrelenting as inflation makes it increasingly difficult to compensate talent competitively against the corporate sector. Development and fundraising teams are particularly hard-hit. Additionally, organizations are still wrestling with the divide between essential frontline workers and administrative staff regarding remote versus in-person work expectations.

Solutions for Staff Morale Challenges

Forward-thinking leaders are addressing these challenges by:

  1. Developing an Employee Value Proposition – Focus on what makes your organization unique as an employer beyond compensation. What can you offer that the for-profit sector cannot? Involve staff in developing this proposition to ensure it meets their actual needs.
  2. Reconnecting staff to mission impact – Find those common threads between why donors support your organization and why staff members are dedicated to your work. Communicate these connections through internal and external channels.
  3. Reassessing organizational values – Ensure your values are incorporated into day-to-day work in ways that help staff feel alignment and fulfillment.
  4. Balancing leadership approaches – Put on a brave face when needed, but also show appropriate vulnerability to build authentic connections with your team.

Challenge #3: Strategic Whiplash

The constant need to adapt to changing regulations, priorities and news is creating what we call “strategic whiplash.” Leaders are living on high alert, making daily adjustments to their operations and communications. This environment can make strategic plans feel irrelevant or obsolete.

There’s a natural temptation during times of rapid change to abandon strategic plans entirely and shift to a purely reactive stance. This tendency is especially pronounced when board members react strongly to news events, sending leadership in multiple directions at once.

Solutions for Strategic Whiplash

Successful leaders are navigating this challenge by:

  1. Conducting mini strategic planning sessions – Rather than abandoning strategic plans, hold focused sessions to evaluate what you need to start, stop,or continue relative to your established priorities. Make careful edits to meet the moment while keeping your overarching strategic framework intact.
  2. Maintaining clear board-staff boundaries – Remind board members of the “hands-on, fingers-out” principle. Be transparent about challenges, but be specific about where you need their expertise versus operational interference.
  3. Establishing monitoring committees – Create board and/or staff committees dedicated to tracking specific developing issues, whether related to funding, policy or legislative changes. These groups can inform planning without triggering reactionary responses.
  4. Being responsive, not reactive – Take a deep breath before making significant changes. Adjust where necessary but stay the course on your core mission and approach.

Challenge #4: DEI Pressures and Responses

Diversity, equity, and inclusion (DEI) initiatives are facing particularly targeted funding cuts. Organizations are grappling with how to balance their values with pragmatic funding concerns.

Some nonprofits are “bulletproofing” language on their websites and marketing materials or adapting to new requirements in federal contracts. Others are taking a more defiant stance, refusing to change their narrative despite potential funding implications.

This tension extends to internal dynamics as well. Staff and board members may push back against language changes, feeling that the organization is compromising its values.

Solutions for DEI Pressures

Organizations are finding their way forward by:

  1. Taking a multi-lens approach – Consider legal implications, risks, and strategic choices while staying true to core values.
  2. Maintaining transparent internal communication – Explain to staff, volunteers and board members why certain external language choices are being made and how they relate to sustaining the mission. Use town halls and fireside chats to address staff concerns openly.
  3. Using data to inform decisions – Show how language or approach adjustments are connected to the organization’s ability to continue serving its mission and constituencies.
  4. Distinguishing between language and values – Communicate clearly that while external language may shift, the organization’s fundamental values and commitments remain unchanged.

Moving Forward With Hope

While the challenges facing nonprofit leaders in 2025 are significant, they’re not insurmountable. By adopting thoughtful approaches to funding diversification, staff engagement, strategic adaptability, and value-aligned communication, organizations can weather this period of uncertainty.

Most importantly, remember that you’re not alone in facing these challenges. The entire sector is navigating similar waters, and by sharing solutions and supporting one another, we can continue advancing our critical missions even in turbulent times.

Resources Mentioned in This Episode:

About Changemaker Conversations

Changemaker Conversations is a podcast for nonprofit leaders who are ready to build smarter, more strategic organizations with less friction and more joy. Join hosts Alyssa Conrardy and Lindsay Mullen, Principals at Prosper Strategies, every other week as they pull you out of the day-to-day grind and refocus your attention on the big picture through candid conversations about the challenges facing nonprofit leaders today.

Subscribe wherever you get your podcasts and visit changemakerconversations.com for show notes and additional resources. If you have ideas for future episode topics or guests, email us at hello@changemakerconversations.com.