Nonprofits across the U.S. report that they are experiencing an increase in trust from funders and positive changes in funder practice, while simultaneously noting that they are facing high levels of burnout in their staff and difficulty filling staff positions and retaining staff. Finally, nonprofits report a more positive financial outlook than many feared given the recent challenging economic context.

This new insight into how nonprofits are faring in 2023 comes from results of a nationally representative survey of nonprofit leaders conducted by the Center for Effective Philanthropy (CEP), released today in a new report, State of Nonprofits 2023: What Funders Need to Know.

Since 2020, nonprofits have experienced — and continue to grapple with — a period of exceptional difficulty, with colliding crises stemming from the COVID-19 pandemic and an ongoing racial justice reckoning as well as economic uncertainty. The aim of this study was to explore the state of nonprofit relationships with both foundation and individual donors, to understand how nonprofits are perceiving current challenges, and to gain a snapshot of the current financial well-being of nonprofits.

CEP's new report reveals that more than half of nonprofit leaders perceived an increase in trust during the past year from their funders, and that in addition to this experience of increased trust, they have seen shifts in related funder practices. The survey also revealed, however, that issues related to staff are the top challenge facing nonprofit leaders. Finally, despite the challenging economic context, most nonprofits experienced either a balanced budget or surplus in the most recently completed fiscal year.

These findings corroborate other CEP research based on self-reporting by foundations. It is worth noting, however, that nonprofits continue to operate in a shifting and uncertain context.

CEP will continue to explore these and other key issues facing nonprofits in the future.