2025 Nonprofit technology impact report: Key findings & challenges

Today’s nonprofit leaders are battling rising competition for funding streams, rising costs, and the regulatory uncertainty which accompanies a new administration, all while program demand and staff shortages reach an all-time high.

The 2025 Nonprofit Technology Impact Report, which was undertaken during a key time of political upheaval, provides a detailed look at how nonprofit finance leaders are using technology to address these concerns and drive greater mission impact.

This year, the survey questioned more than 350 nonprofit leaders representing a range of case areas, about the biggest challenges facing their organizations—and the findings highlight some key learnings for the sector to take into 2025.

From a reliance on manual, time-consuming reporting and a lack of real-time visibility into key metrics and performance, many of the challenges nonprofit leaders are reporting have remained consistent year-on-year.

But with today’s funding market demanding higher levels of financial transparency, efficiency, and accountability than ever before, nonprofits leaders must be prepared to act now to safeguard their organizations’ futures.

Here’s what we’ll cover:

Staffing is now the sector’s primary challenge

This year saw a huge growth in the number of respondents indicating that they are struggling with hiring and retention, with 58% saying it’s the biggest external challenge, outranking competition for funding (55%) and economic uncertainty (49%).

Nonprofits say their inability to compete on wages and benefits is making recruitment difficult, while a decline in volunteerism is also impacting service delivery.

Some are also struggling to find impactful board members, which will further affect their strategic performance.

At the same time, nonprofits have increased the number of programs they are administering to help address the growing need.

Addressing internal inefficiencies will improve performance

When asked to identify their biggest operational challenges, nonprofit financial leaders had common concerns around inefficiencies.

While, anecdotally, finance leaders in the industry may already be aware of a shared challenge surrounding manual work and lack of data visibility, the report highlighted how widespread the issue truly remains.

What are the biggest operational challenges affecting nonprofit organizations today?

• Lack of process automation and organizational efficiency – 41%
• Reliance on manual, time-consuming reporting – 35%
• Lack of real-time visibility into key metrics and performance – 34%
• Difficulty budgeting and planning for the year ahead – 31%
• Inefficiencies and delays due to disparate systems – 29%

These top five challenges have remained the same for the past few years.

While nonprofits are aware of the critical challenges that they need to address, there are clearly roadblocks getting in the way of more efficient workflows.

Progress that is being made around automation and reporting, for example, remains slow.

More than a third (34%), for example, shared that they’re still struggling with a lack of visibility into key metrics and performance.

This stands out as a significant impediment to the sector’s sustainable growth.

The link between data handling and financial planning

Clear and transparent financial data ensures nonprofits can continue to operate at maximum efficiency and deliver on their missions long into the future.

As inflation drives up costs, it’s important for nonprofits to have a strong understanding of their financial position and manage budgets effectively, with renewed emphasis on cost management.

The 2025 trends report shows:

Some improvement in data handling

Only 7% of respondents still consider their use of data to be manual and siloed.

Missed opportunities for strategic decision-making

While 27% of respondents considered themselves ‘data-informed’, only 9% were ‘highly data-driven’—and the most popular response (34%) was from finance leaders who collect data, but fail to ‘fully leverage’ it.

Limited team capacity is having an impact

31% of respondents believe that building their finance team’s skills and capacity will be a priority for driving increased impact in the next year.

In 2025, nonprofit finance leaders must be prepared to monitor the financial health of their organizations and demonstrate sustainability and stewardship if they are to succeed at winning vital funds.

Boosting team capacity with automation, and improving data-handling will also help improve nonprofits’ ability to tackle staffing challenges and facilitate more strategic decision making for the future.

Closing the technology gap

This year’s survey showed a clear need for nonprofit finance leaders to embrace the benefits of new technology.

However, there is a sector-wide lack of confidence that’s impeding progress.

When asked about leveraging AI technology, for example, only 4% of respondents felt ‘very confident’ in their organization’s capability.

Almost half of respondents (45%) were unsure whether their current financial technology can support AI— making planning for the future almost impossible.

Other key findings highlighted:

The industry is split on AI

While 54% of respondents are in a position of either using, or looking to use, AI, 46% are either not considering it or need further information before they commit to the tech.

That means that almost half of the nonprofit industry is lagging behind their peers, and the competition to catch-up will be fierce.

Budgeting and planning tools are gaining popularity

In 2022, only 18% of nonprofits were using tools specifically designed to aid with their forward-planning.

That figure has now risen to 38%, a notable increase which demonstrates the importance of budgeting to long-term nonprofit sustainability.

There is a strong desire for integration

The survey illustrated a clear demand for comprehensive, integrated solutions that can improve operational efficiency.

This includes automated financial reporting, which was the highest ranked software priority amongst nonprofit finance leaders, as well as the ability to integrate with other systems, and automatically track and consolidate multiple funds and entries.

Financial sustainability will be the top priority for 2025

Nonprofit leaders are looking to enhance donor and grant management this year, and strengthening budgeting and forecasting capabilities.

This focus reflects the ongoing competition for funding and economic uncertainty impacting the sector.

Final thoughts

The annual nonprofit technology trends report continues to highlight the most pressing needs of the industry, and this year the overwhelming message is clear— staffing issues and manual processes continue to burden operations, while technology adoption remains low on the priority list.

Visibility remains limited, even while nonprofit executives are pushing for greater insight than ever before.

Nonprofits need to break the cycle of manual processes, and look at technology and automation as a means to build scale and capacity.

Effective data utilization remains rare, and budgeting and planning isn’t reflecting reality.

Those surveyed indicated that the external societal factors impacting their organizations are particularly exacerbated by the lack of internal capacity—a challenge especially notable when considering the impact of outcome metrics and forecasting on the likelihood of winning funds.

But it’s also clear financial leaders have the opportunity to contribute more to their organizations, rather than focus solely on expense management, compliance and internal processes.

The full report reveals where crucial disparities and opportunities lie.

For organizations looking ahead to 2025, now is the time to prioritize financial management systems that free up finance teams to contribute strategic insights and drive sustainable mission growth for this year and beyond.

Read the full 2025 nonprofit technology trends report to gain deeper insights and discover where nonprofit leaders are focusing their attention in the year ahead.