Despite economic uncertainties and shifting donor behaviors, the nonprofit sector has demonstrated remarkable resilience over the past year. According to the newly released 2025 Philanthropy Pulse Report, 62% of organizations experienced revenue growth in 2024, reflecting an optimistic outlook for the year ahead.
The annual study, based on data from nearly 650 nonprofit organizations across 34 countries and 46 U.S. states, offers a comprehensive analysis of global fundraising trends, challenges, and opportunities.
Optimism Amid Economic Challenges
The findings indicate that nonprofits are navigating a complex landscape marked by economic fluctuations, donor engagement shifts, and technological advancements. While many organizations have struggled with staffing shortages and budget constraints, they have also embraced innovation and strategic planning to sustain growth.
Notably, the report highlights that organizations investing in digital transformation and artificial intelligence (AI) have seen significant improvements in donor engagement. Nearly one-third (31%) of nonprofits utilizing AI reported enhanced communication with donors, enabling more personalized and data-driven fundraising efforts.
The Role of AI and Technology in Fundraising
The integration of AI tools into fundraising strategies has allowed nonprofits to target donors more effectively. AI-driven analytics help organizations predict donor behavior, optimize outreach, and improve retention rates. Additionally, AI has enabled organizations to automate administrative tasks, freeing up valuable resources for direct donor engagement.
However, the report also acknowledges that AI adoption is not without its challenges. Smaller nonprofits with limited budgets struggle to implement these technologies at the same pace as larger organizations, leading to a potential digital divide within the sector.
Donor Acquisition and Retention: Progress and Persistent Hurdles
While donor acquisition and retention remain top concerns for nonprofits, the report indicates steady improvements in these areas. Over half (53%) of organizations reported an increase in new donors in 2024.
More importantly, nearly three-quarters (72%) of organizations that grew their donor base also reported a rise in overall revenue.
Despite this progress, fewer organizations are acquiring new donors consistently year-over-year. In 2023, donor acquisition growth stood at 57%, compared to 62% in 2022. Economic uncertainty, increased competition for charitable dollars, and donor fatigue have all contributed to this trend.
Diversity, Equity, Inclusion, and Belonging (DEIB) in Philanthropy
The 2025 report underscores the importance of diversity, equity, inclusion, and belonging (DEIB) in nonprofit fundraising. A significant 61% of organizations align DEIB initiatives with their values, recognizing the role of inclusivity in strengthening community relationships. However, nearly half (47%) of respondents admitted to facing challenges in engaging diverse donor groups.
International organizations have been particularly proactive in this area, with many citing DEIB efforts as crucial to building trust with stakeholders. The study suggests that nonprofits must refine their outreach strategies to better connect with underrepresented donor demographics.
Staffing and Leadership: The Struggle to Attract Talent
Nonprofits are facing increasing difficulties in hiring and retaining fundraising professionals. The report reveals a 10% decline in staff hiring over the past year, primarily due to budget limitations and a shortage of qualified candidates. This hiring slowdown could hinder fundraising efforts in the long term, as organizations rely heavily on skilled professionals to drive donor engagement and revenue growth.
Leadership involvement also remains a challenge. While 72% of fundraising professionals consider themselves knowledgeable in board relations, nearly one in four (23%) organizations cited board engagement as a key obstacle.
The report suggests that board benchmarking—a method of evaluating board performance against sector standards—could help nonprofits address this issue.
Large vs. Small Nonprofits: A Growing Disparity
The report highlights a notable disparity between large and small nonprofits in terms of revenue growth. Nearly 78% of organizations with operating budgets between $100 million and $500 million reported financial gains in 2024.
In contrast, smaller organizations, particularly those with budgets under $25 million, faced revenue declines at a higher rate.
The gap suggests that well-resourced organizations have greater capacity to invest in technology, staff, and donor engagement strategies, whereas smaller nonprofits often struggle to keep pace. The study emphasizes the need for increased funding and capacity-building initiatives to support smaller organizations.
The Shift Away from Digital Fundraising
Surprisingly, digital fundraising saw a 28% decline compared to 2023. While digital platforms remain a vital tool for donor outreach, nonprofits are shifting their focus back to in-person engagements. The decline is attributed to donor fatigue, concerns over online fraud, and challenges with digital payment systems.
Social media, once seen as a game-changer for fundraising, has also seen reduced effectiveness in some areas. Many organizations now prioritize personalized outreach strategies, such as face-to-face meetings and direct phone calls, to cultivate donor relationships.
The Future of Fundraising: Expanding Revenue Streams
Looking ahead, nonprofits are focused on diversifying their revenue sources to ensure long-term sustainability. More than half (57%) of organizations reported plans to expand revenue streams in 2025, seeking alternative funding through corporate partnerships, impact investing, and donor-advised funds (DAFs).
The report also notes that 94% of organizations are familiar with DAFs, yet few actively target them as a fundraising strategy.
As the philanthropic landscape continues to evolve, nonprofits that effectively leverage these funds could unlock significant new revenue opportunities.
A Resilient Sector Adapting to Change
The 2025 Philanthropy Pulse Report paints a picture of a sector that, despite economic and operational hurdles, remains optimistic and adaptable. Organizations that embrace innovation, prioritize donor engagement, and invest in sustainable growth strategies are well-positioned to thrive in the coming years.
While challenges persist—particularly in staffing, donor acquisition, and DEIB efforts—the nonprofit sector’s ability to evolve in response to these issues is a testament to its resilience. As fundraising strategies continue to shift, one thing is clear: philanthropy is not just surviving but finding new ways to flourish in a changing world.
