Funding challenges, increasing demand drive staff burnout concerns

Nonprofit staff are essential to delivering programs and services, yet the workforce is showing clear signs of strain. Many nonprofits struggle to fill vacancies, and financial hardship and heavy workloads are common among staff. Unsurprisingly, burnout is widespread: 90% of nonprofit leaders report some level of concern about staff burnout.

A recent Urban Institute analysis of National Survey of Nonprofit Trends and Impacts data examined nonprofit leaders’ top concerns in 2024 and 2025 using the question: “All things considered, what are you most concerned about for your organization over the next year?” The share of leaders who identified staff burnout as their top concern doubled from 4% in 2024 to 8% in 2025. A closer look at these responses suggests two key drivers behind this growing concern: funding challenges and increasing demand for services.

Funding challenges drive staff burnout

Among leaders who identified staff burnout as a top concern, 62% elaborated on the reasons behind their concern. Of those, half pointed to funding challenges as a contributing factor to burnout, in three major ways:

1. Staff cuts: Funding challenges can lead nonprofits to cut staff—or worry they might soon have to. One respondent commented: “We are increasingly concerned about staff burnout and organizational capacity. Our small team is working tirelessly to bridge funding gaps, reapply for grants, and sustain essential services. Without stable, predictable support, we risk losing key personnel and being forced to scale back core operations.”
2. Inadequate pay: Funding challenges can also limit nonprofits’ ability to offer competitive compensation: “Our employees are the backbone of our organization, and they are already making sacrifices through reduced benefits,” one nonprofit leader said. “We are deeply concerned about the potential for burnout.”
3. Understaffing: In other cases, funding challenges can leave nonprofits understaffed. As one respondent said: “Every department is stretched. We need more people, but we don’t have the budget to support the hires that would truly relieve pressure.”

In 2025, many nonprofits faced government funding disruptions and reductions in funding from foundations and individual donors. When funding is unstable, nonprofits must devote significant staff time to fundraising rather than program delivery. This added administrative burden increases workloads while limiting the resources available to retain, compensate, and expand staff, creating conditions that accelerate burnout.

Increasing demand for services contributes to burnout

Among nonprofit leaders who listed staff burnout as a top concern and gave reasons for that concern, 38% cited increasing demand for their organizations’ programs and services. One nonprofit leader asked, “Can we survive the burnout of the increased demand for client support, trauma, and fear?”

Another explained, “As demand for services increases, ensuring we have the staffing, funding, and infrastructure to meet the needs of survivors without compromising the quality or integrity of care is top of mind. With such a lean team, burnout is a real risk.”

Even before recent reductions to programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP), 68% of nonprofit leaders anticipated increased demand as of late spring/early summer 2025. Cuts to those programs could intensify pressure on nonprofits as they work to fill gaps in health care, nutrition, and other essential services.

Mitigating staff burnout requires both nonprofits and funders

For nonprofit leaders, monitoring and addressing staff burnout may become increasingly important when facing funding challenges and increasing demand. The Nonprofit Finance Fund (NFF) highlights that fair pay, better benefits, flexible work options, collaborative leadership, and employee unions support staff well-being.

For funders, supporting the well-being of their grantees’ staff is especially crucial as demand for services continues to rise. NFF offers a guide for funders on supporting nonprofit workers’ well-being, including opening discussions about benefits, fully funding work, providing multiyear and flexible funding, supporting well-being programs and research, and creating platforms for learning and collective action.

Burnout among nonprofit staff is a long-standing challenge that may further intensify as financial uncertainty and demand continue to grow. Nonprofits cannot address these pressures alone; it will take both nonprofit leaders and funders to help mitigate staff burnout and support the workforce that sustains the sector.

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