Four Nonprofit Risk Trends to Watch in 2026As we enter the new year, nonprofit leaders face an environment of rapid change and rising complexity. Tight budgets, emerging funding sources, evolving AI regulations and mounting litigation will influence the risk landscape. Is your organization prepared to navigate with confidence? Let’s dive into the four key nonprofit risk trends to watch in the year ahead.
Trend #1: Tight Operating Budgets
Increased demand for nonprofit services combined with funding pressures may result in tightening budgets.
Inflation and job losses have put pressure on families. According to the Bureau of Labor Statistics, unemployment climbed to 4.6% in November 2025. At the same time, changes in political policy could leave many people without the benefits they depend on. When the government shutdown threatened SNAP benefits in November, ABC News says food banks saw a surge in demand, and demand remained higher even after benefits were restored. Stricter SNAP requirements and expiring ACA subsidies could lead to even higher demand for nonprofit services going forward.
Unfortunately, economic uncertainty can also prevent people from making donations. According to an AP-NORC poll conducted in early December, only 18% of people say they have already donated and plan to do so again before the end of the year, while 30% say they have not donated and do not plan to do so.
Tight budgets can put strain on nonprofits, which many have to cut corners, reduce services or make do with a smaller staff, resulting in greater risk. For example, delayed repairs could put a nonprofit at risk for property damage, while a smaller staff could increase the risk of mistakes.
Trend #2: Bitcoin Donations
Many nonprofits will be happy to accept donations in any form. However, the rise of cryptocurrency donations can create complications.
According to The Giving Block, global cryptocurrency donations have reached $2 billion in the five years leading up to 2024, with substantial growth in 2024.
By accepting bitcoin and other cryptocurrency donations, nonprofits can tap into this trend, and they may receive funds that donors aren’t willing to give in any other way. At the same time, market volatility means these donations could rise or fall in value quickly, making it difficult to budget and causing accounting challenges. Other risks can involve proper storage of funds and the threat of losing access to cryptocurrency wallets.
#3: AI and Cyber Risks
AI has made it easier for scammers to carry out social engineering and cyberattacks. For instance, scammers can use AI to craft convincing phishing messages or to search for vulnerabilities and launch attacks.
For nonprofits, the risk is twofold. First, nonprofit organizations may be targeted by cybercriminals attempting to divert funds, steal data or infect files with ransomware. In one example from last year, scammers use deepfake video to target a nonprofit in Oregon, posing as an artist’s son who wanted to sell some of his father’s paintings and donate the proceeds, according to KGW8. Thankfully, the nonprofit wasn’t fooled, but as AI becomes more convincing, these types of scams may be harder to spot.
Second, cybercriminals may pose as nonprofits in order to trick people into donating funds, reducing the amount of money going to legitimate nonprofits and eroding donor trust. KOAA News reports that crisis charity scams spiked in the aftermath of the Los Angeles wildfires, and AI has made it easier for bad actors to create sophisticated scams.
Trend #4: Evolving Liability Risk
Carrier Management says technology and social changes are leading to a growing risk of employment discrimination claims. For example, the growing use of AI in hiring can lead to inadvertent discrimination, while remote work policies can trigger discrimination claims. Nonprofits also face litigation risks tied to statute of limitations reform and allegation of funds mismanagement.
Amid all of these risks, social inflation and nuclear verdicts are increasing the potential losses. In one example, Proskauer says a California jury awarded more than $11 million to a woman who accused her employer, a plasma donation center, of illegally discriminating against her by failing to accommodate her back pain and then terminating her. To cover their risks, nonprofits need sufficient liability insurance, but securing coverage is sometimes challenging due to reduced capacity and surging rates, especially for abuse liability coverage.
Is Your Nonprofit’s Risk Management Keeping Up?
As you navigate these nonprofit risk trends, count on Heffernan Insurance Brokers for mission-minded nonprofit insurance. Our nonprofit insurance program provides coverage that’s designed for the needs of nonprofit organizations, so you can stay focused on your mission while managing your risks. Learn more.
