Non-profits in Capacity Crisis: Research Uncovers Critical Gaps in Funding, Coaching, and Digital Support

New research published today by Sage Foundation reveals that medium-to-large non-profits face four systemic and deeply interconnected capacity challenges: financial instability, workforce pressures, weak leadership and governance, and outdated operational infrastructure.

Sage Foundation, which acts on Sage's mission to knock down barriers for underserved communities, commissioned a report in partnership with SLR Consulting, exploring the operational and organisational challenges facing charities in the United Kingdom, United States, Spain, and South Africa. These countries were selected to reflect regions of strategic importance to Sage while ensuring strong geographic and demographic diversity.

The report, titled ‘Non-Profit Capacity Needs’, is based on survey findings compiled by SLR Consulting, with responses from people who work in non-profits across four regions. The key finding is that coaching and capacity building were the main areas where non-profits need the most support, yet there are limited existing programmes to meet this need. This reinforces the value of the existing Sage Foundation Grow programme, which pairs non-profit leaders with Sage employees for tailored, leader-to-leader mentoring.

Specifically, the research found that non-profits across all four countries face the following challenges.

• Operational infrastructure and digital capabilities represent the most frequently cited capacity challenge in surveys, with technology and digital tools ranked number one. Many charities rely on outdated or fragmented systems that slow service delivery and increase administrative burden. Despite growing awareness of AI's potential, most organisations lack the infrastructure, skills, or funding to begin digital transformation.

• Financial resilience remains the most fundamental barrier to organisational sustainability. Charities are overwhelmingly reliant on short-term, restricted grants that limit their ability to build reserves, invest in infrastructure, or plan beyond a single funding cycle. In Spain and South Africa, the situation is particularly acute, with few unrestricted funding options and minimal financial planning support available.

• Workforce capacity and staff wellbeing are under severe strain. High turnover—particularly in specialist roles—combined with burnout from heavy workloads and emotional labour, and limited professional development pathways, are affecting workforce stability and threatening service continuity across the sector. Non-profit survey respondents highlighted that retaining skilled staff is among their greatest ongoing challenges.
• Leadership, governance, and board development are consistently underpowered. Boards are frequently inactive or disengaged, succession planning is often informal or absent entirely, and governance weaknesses leave organisations ill-equipped to manage risk or plan strategically for the long term. Existing support in this area is largely template-based and one-off, rather than tailored and sustained.

Helen Devanny, Vice President of Sage Foundation, said: "The barriers facing non-profits today are not isolated problems - they reinforce one another in ways that can trap organisations in cycles of under-investment and instability. The good news is that the solutions are equally interconnected. Strengthening financial resilience, for example, creates the headroom to invest in people and systems. We believe a holistic, sustained approach to capacity building can unlock meaningful and lasting change for charities and the communities they serve."

The research also found that the provision of support varies significantly by geography. Spain and South Africa have fewer options and more limited access to capacity-building resources than the US and UK, making the need for targeted intervention in those regions particularly pressing. Across the four regions, existing programmes tend to be short-term and project-based, with limited emphasis on long-term organisational resilience.

Hannah Harper, Director of Corporate Responsibility at SLR Consulting, said: “Non-profits continue to face persistent, interconnected gaps, especially where coaching and long-term operational support are limited or too short-term to create sustainable progress. Our research with Sage shows the biggest, most lasting impact comes when organisations address the four challenges together, rather than in isolation.”

Since 2015, Sage Foundation has been providing support, mentorship, and financial resources to underserved communities through programmes like Sage Foundation Grow. This new research provides a roadmap for where the Foundation's resources could be directed next, to help build a stronger, more resilient non-profit sector — regardless of geography or organisational size.

The report is based on findings compiled by SLR Consulting, drawing on 18 sector reports, 7 expert interviews, and 29 survey responses from non-profits across four of Sage Foundation's strategic regions. You can download the report here. 

For further reading, please visit the Sage Foundation newsroom, and to learn more about Sage Foundation, please visit: Sage Foundation - Charity Support | Sage UK