According to BTQ Financial’s 2026 Nonprofit Leaders report, after years of reactive crisis management, nonprofit organisations entered 2026 showing unmistakable signs of financial maturity.
While almost half (47%) of the 100 US-based organisations had drawn down reserves to cover operating costs in the past year, 85% planned to expand their programmes in 2026 and four-in-ten had approved new revenue generating initiatives over the previous 12 months.
“Some of the funding challenges facing nonprofit organisations include lack of diversification in revenue, tighter corporate budgets for supporting social causes and dependencies on government funding,” explains Selene Benavides, CFO at ALPFA (Association of Latino Professionals for America), a national nonprofit organisation created in 1972 to foster career growth, leadership and opportunity.
Three-quarters of the organisations surveyed reported zero voluntary finance turnover and a quarter had implemented a new financial system. One of the most significant shifts for these CFOs was that more than 80% were working with a finance and accounting partner compared to just 30% who were doing so last year – a development most referred to as significant or even transformational.
However, the report also noted that four-in-five nonprofits still rely on manual spreadsheets with only 18% using dedicated financial planning and analysis or budgeting software.
“Some budgets are too small to support the business case for tools that are expensive and will be used by a small team of a few employees,” says Benavides. “Additionally, because budgets are limited, Excel is cost effective and familiar.”
Given that nearly half of staff time in some nonprofits is redirected away from forecasting, compliance and strategic analysis towards chasing outstanding payments, this is clearly not ideal.
More than two-thirds of respondents reported adjusting their budgets mid-year in 2025, a sign that boards are no longer deferring to annual cycles when circumstances change. The survey data suggests that board members are not simply rubber-stamping management requests but actively driving oversight, with more than three-quarters now requesting more detail than standard financial reports provide or initiating conversations about long-term sustainability without waiting to be prompted by finance teams.
The report authors say this is evidence that the finance function has become the connective tissue between mission ambitions and organisational survival and that boards are treating it accordingly.
Benavides agrees that boards have become more proactive in terms of requesting additional information and insight. “They want and need transparency into the numbers in real-time to make decisions and pivot quickly in turbulent and hard times,” she says.
Nearly half of the nonprofits surveyed had been forced to draw on unrestricted cash reserves to cover operating expenses over the last 12 months — a metric that board members and finance leaders treat as a red line indicator of organisational health.
Even more concerning was the finding that 85% could only sustain operations for six months or less using available unrestricted reserves. This narrow runway leaves these organisations acutely vulnerable to funding disruptions and explains why scenario modelling has become a board level priority rather than a back office exercise.
“Options for optimising cash reserves are a mix of money market and brokerage accounts – or real estate if there is a need for central office,” concludes Benavides.
