Nonprofit sustainability: When closure is the right choice

Since 2020, the nonprofit sector has faced compounding crises—from the COVID-19 pandemic to the unprecedented federal actions of 2025—that have reshaped every aspect of organizations. As Dr. Mirae Kim and Dr. Dyana P. Mason observe, nonprofits play a substantive and critical role in the U.S. economy and social safety net, and a crisis impacting the nonprofit sector significantly affects community well-being and the broader economy.

Many nonprofits are reassessing whether they have the capacity and financial sustainability to continue advancing their mission. For some, intentional closure, as difficult as it is, is the most responsible and mission-aligned path forward.

In early 2026, Global Washington (GlobalWA), a nonprofit network supporting Washington State’s international development sector, made the intentional decision to close rather than continue operating with declining capacity and financial instability. This reflection shares lessons from that process, including insights on sustainability, membership models, strategic decision making, and ways intentional closure can be a positive and viable pathway for organizations facing similar challenges.

Nonprofit sustainability and GlobalWA’s path to closure

Funders’ shifting priorities

Founded in 2008, GlobalWA connected nonprofits, academic institutions, philanthropies, corporations, and public-sector actors working across global development and global health. At its height, GlobalWA had nearly 200 members, serving as a hub for collaboration, professional development, and sector coordination.

Like many infrastructure organizations, its sustainability depended on the health and engagement of the ecosystem it supported—which evolved over time. Longtime funders shifted priorities, leaving funding gaps that were difficult to fill. Membership dues and event revenue declined as organizations faced tighter budgets.

COVID-19’s impact on revenue

COVID-19 accelerated these challenges. Virtual programming expanded access but did not generate the participation or earned revenue of in-person convenings. By late 2024, membership renewal had declined to 70%, and overall membership had not returned to pre-pandemic levels.

Changes to international development funding

In 2025, federal foreign assistance cuts and structural changes to U.S. international development created unprecedented instability. While The Urban Institute found that one-third of nonprofits across all issue areas experienced at least one type of government funding disruption in the first half of 2025, more than 80% of GlobalWA’s member organizations were impacted.

In addition, the political climate created fundraising challenges for GlobalWA, as it did for many in the sector. After multiple efforts to grow funding and rebuild the membership base, the board determined that long-term sustainability was out of reach.

Reflections on nonprofit sustainability and intentional closure

GlobalWA chose a planned wind-down while it still had financial runway. With support from longstanding funders, GlobalWA created a structured transition focused on preserving the community it helped create.

Here are some lessons we learned and reflections on nonprofit closure for the broader sector. Additional details can be found in the full case study.

1. Nonprofit sustainability isn’t always in your control

Solid leadership and management may not be enough to withstand multiple external disruptions. Policy changes, funding contractions, and sector-wide pressures can alter an organization’s viability even with strong operations.

To maximize organizational resilience, leaders should regularly review strategic and financial assumptions. Scenario planning should include funding shocks, policy implications, and participation shifts. GlobalWA, like many in the sector, did not anticipate the number, frequency, and severity of disruptions of the past six years.

2. Membership organizations carry unique risks

Membership organizations are especially vulnerable during disruptions. When members reduce spending, infrastructure organizations are among the first to lose revenue.

To minimize fiscal impacts, organizations should diversify revenue wherever possible and regularly assess whether membership structures meet sector needs. GlobalWA’s efforts to diversify funding at the level required for sustainability were ultimately inadequate.

3. Early decision making enables intention

GlobalWA understood the importance of action before conditions became urgent. Planning for closure began while GlobalWA still had resources. By acting early, GlobalWA gave staff time and support to seek new opportunities, communicated transparently with stakeholders, satisfied liabilities, and made intentional decisions about programs and partnerships, reducing the disruption often caused by sudden closure.

To head off crisis, leaders should establish clear thresholds, including minimum reserves, membership targets, and fundraising benchmarks that trigger deeper investigation and decision making. This was key to GlobalWA’s decision making and its successful closure.

4. Nonprofit closure can be positive

Closure is often equated with failure, but GlobalWA’s experience suggests otherwise. When sustainability is no longer achievable, a planned wind-down is an act of responsible stewardship. Intentional transitions can be a positive way for the nonprofit sector and specific communities to evolve and grow in new ways.

Successful planned wind-downs require full transparency, proactive communication, and a clear understanding of organizational capacity throughout the final transition.

5. Networks should outlast organizations

GlobalWA closed in early June 2026, but the relationships it fostered will continue. GlobalWA prioritized preserving and transferring knowledge and relationships to the community—from investment in peer leadership, to shared platforms, to distributed ownership of convening and capacity building. It’s an important reminder: Success in nonprofit sustainability should be measured not by institutional longevity but by how strong and connected the community remains.

As disruptions continue, leaders need to consider how to sustain organizations and how to steward missions responsibly when existing structures are no longer viable. The most responsible choice can be closing with intention and creating space for what’s next.

Photo credit: Global Washington on behalf of Vlack Media