Imagine a community without nonprofits. Who cares for older adults? Who provides housing, supports families, or stands alongside people when they need it most? Who creates opportunities for young people, responds when families face a crisis, or brings neighbors together to strengthen their communities?
We spend a lot of time talking about the challenges facing nonprofits. We spend far less time talking about what happens to people and communities when they disappear.
Nonprofits employ roughly 9% of the American workforce and contribute more than $1.5 trillion to our economy. Yet those numbers tell only part of the story.
What makes the nonprofit sector different is not simply what we do, but why we do it and where the value we create goes. We exist to serve a public purpose. We reinvest resources in our missions and communities rather than distributing profits to owners or shareholders. Our success is ultimately measured not by what we retain, but by what we make possible for others.
Our stakeholders are the people and communities we serve. When nonprofits are strong, communities benefit. When they struggle or disappear, the consequences extend far beyond any one organization.
As we look toward 2027, the question is not simply how we sustain the nonprofit sector as it exists today. It is how we strengthen a sector whose purpose is to create lasting value for people and communities.
Three trends are shaping that future.
1. We Cannot Cut Our Way to a Stronger Nonprofit Sector
Nearly four in 10 nonprofits surveyed reported operating deficits in 2025. For years, nonprofit leaders have been asked to do more with less. They have responded by stretching resources, finding efficiencies, and asking their teams to take on more.
But there are limits to what organizations can accomplish by cutting costs and working harder. That is not a strategy for the future.
The challenge in 2027 will not simply be managing tighter budgets. It will be rethinking how organizations operate, invest in their people, and respond to changing community needs.
We need to change the conversation from managing scarcity to investing in strength.
Leadership development, technology, data, partnerships, and new business models are not luxuries. They are essential to an organization’s ability to adapt, demonstrate results, and sustain its mission.
Yet too often, these are the very investments that are delayed or eliminated when resources become scarce. We fund programs but hesitate to fund the organizational capacity that makes those programs effective.
That needs to change.
Investing in the strength of a nonprofit is not an investment in the organization for its own sake. It is an investment in the people and communities that depend on its mission.
We also need to be willing to ask harder questions. Are our business models sustainable? Are we investing in the next generation of leaders? Are there opportunities to share services, build partnerships, or work differently to reach more people?
The goal should not be to preserve every organization exactly as it operates today. It should be to ensure that the people and communities depending on nonprofits have access to strong, effective organizations tomorrow.
If we want stronger communities, we must invest in stronger nonprofits.
2. What Works in One Community Shouldn’t Stay There
Across the country, nonprofits are finding better ways to address some of our most persistent challenges, from housing insecurity and access to care to economic mobility and family well-being.
Every day, nonprofit leaders are developing new approaches, building partnerships, and finding ways to respond to the changing needs of their communities.
Yet too often, what works in one community stays in that community.
We celebrate innovation, launch pilot programs, and recognize successful organizations. But how often do we ask what it would take for an effective approach to reach ten more communities? Or a hundred?
The next frontier for the nonprofit sector is not simply innovation. It is bringing what works to more people and communities.
That requires more than collaboration or sharing best practices.
It takes intentional investment in leadership, technical expertise, financing, and partnerships that allow organizations to learn from one another and adapt effective approaches to their own communities.
It also requires recognizing that no single organization can solve the challenges facing our communities alone.
Consider housing insecurity. Addressing it requires more than building homes. It requires bringing together housing providers, health systems, financial institutions, community organizations, and public and private partners. Each brings different expertise and resources. Together, they can accomplish what no single organization could achieve independently.
The same is true for improving access to care, supporting older adults, and strengthening families.
We also need to rethink how we measure success.
The number of programs launched, organizations engaged, or dollars raised tells us something about our work. But those measures alone do not tell us whether we are creating lasting change.
Are organizations stronger? Are effective approaches reaching more communities? Are more people able to access housing, care, and opportunity? Are we building partnerships and attracting investment that will sustain progress?
The goal is not simply to grow organizations or replicate programs. It is to create more value for communities by bringing effective approaches to more people.
The opportunity in 2027 is to move beyond individual organizational success and create the conditions for greater impact together.
3. Philanthropy Is Changing. Our Approach Must Change Too.
The way wealth is held, managed, and deployed is changing.
At the end of fiscal year 2024, nearly $328 billion was held in donor-advised funds alone. At the same time, growing concentrations of private wealth, philanthropic LLCs, impact investing, and new approaches to giving are reshaping the philanthropic landscape.
These changes present both challenges and opportunities for nonprofits.
Traditional fundraising approaches will remain important, but they will not be enough.
We need to understand how donors and investors are thinking about the future, what motivates their giving, and how they want to engage in creating change.
Increasingly, the conversation is not simply about supporting an organization or funding a program. It is about the opportunity to address a challenge, demonstrate results, and create lasting impact.
That requires nonprofit leaders to think differently about how we build relationships and make the case for investment.
We must be able to articulate not only what we do, but the value we create. We need to demonstrate results, identify opportunities for growth, and bring partners together around shared ambitions.
And philanthropy needs to evolve as well.
If we want lasting impact, we must be willing to invest in more than individual programs. We need philanthropic capital that strengthens leadership, builds organizational capacity, supports collaboration, and allows effective approaches to reach more communities.
This also means recognizing that different kinds of capital can play different roles. Philanthropic funding can support innovation and early-stage work. Patient and catalytic capital can make new approaches possible. Public and private investment can sustain and expand what works.
The opportunity is to connect these resources more intentionally to the needs and ambitions of our communities.
The return on investment is not measured in financial gain for shareholders, but in stronger communities, greater opportunity, and improvements in people’s lives.
The question is not simply how we raise more money. It is how we connect philanthropic capital with opportunities to create lasting change.
Looking Ahead
The nonprofit sector has a distinctive role in American life. We bring people together, respond to needs that markets and government alone cannot meet, and reinvest in the communities we serve.
That is both our responsibility and our opportunity.
In 2027, we have an opportunity to rethink how we lead, how we work together, and how we attract investment. Not simply to sustain our organizations, but to strengthen a sector whose success is measured by the value it creates for people and communities.
Because ultimately, when we invest in the nonprofit sector, we invest in the future of our communities.
*****
Alesia Frerichs is president and CEO of Lutheran Services In America.
Commentary: 3 Trends For Creating Lasting Value During 2027
Imagine a community without nonprofits. Who cares for older adults? Who provides housing, supports families, or stands alongside people when they need it most? Who creates opportunities for young people, responds when families face a crisis, or brings neighbors together to strengthen their communities?
We spend a lot of time talking about the challenges facing nonprofits. We spend far less time talking about what happens to people and communities when they disappear.
Nonprofits employ roughly 9% of the American workforce and contribute more than $1.5 trillion to our economy. Yet those numbers tell only part of the story.
What makes the nonprofit sector different is not simply what we do, but why we do it and where the value we create goes. We exist to serve a public purpose. We reinvest resources in our missions and communities rather than distributing profits to owners or shareholders. Our success is ultimately measured not by what we retain, but by what we make possible for others.
Our stakeholders are the people and communities we serve. When nonprofits are strong, communities benefit. When they struggle or disappear, the consequences extend far beyond any one organization.
As we look toward 2027, the question is not simply how we sustain the nonprofit sector as it exists today. It is how we strengthen a sector whose purpose is to create lasting value for people and communities.
Three trends are shaping that future.
1. We Cannot Cut Our Way to a Stronger Nonprofit Sector
Nearly four in 10 nonprofits surveyed reported operating deficits in 2025. For years, nonprofit leaders have been asked to do more with less. They have responded by stretching resources, finding efficiencies, and asking their teams to take on more.
But there are limits to what organizations can accomplish by cutting costs and working harder. That is not a strategy for the future.
The challenge in 2027 will not simply be managing tighter budgets. It will be rethinking how organizations operate, invest in their people, and respond to changing community needs.
We need to change the conversation from managing scarcity to investing in strength.
Leadership development, technology, data, partnerships, and new business models are not luxuries. They are essential to an organization’s ability to adapt, demonstrate results, and sustain its mission.
Yet too often, these are the very investments that are delayed or eliminated when resources become scarce. We fund programs but hesitate to fund the organizational capacity that makes those programs effective.
That needs to change.
Investing in the strength of a nonprofit is not an investment in the organization for its own sake. It is an investment in the people and communities that depend on its mission.
We also need to be willing to ask harder questions. Are our business models sustainable? Are we investing in the next generation of leaders? Are there opportunities to share services, build partnerships, or work differently to reach more people?
The goal should not be to preserve every organization exactly as it operates today. It should be to ensure that the people and communities depending on nonprofits have access to strong, effective organizations tomorrow.
If we want stronger communities, we must invest in stronger nonprofits.
2. What Works in One Community Shouldn’t Stay There
Across the country, nonprofits are finding better ways to address some of our most persistent challenges, from housing insecurity and access to care to economic mobility and family well-being.
Every day, nonprofit leaders are developing new approaches, building partnerships, and finding ways to respond to the changing needs of their communities.
Yet too often, what works in one community stays in that community.
We celebrate innovation, launch pilot programs, and recognize successful organizations. But how often do we ask what it would take for an effective approach to reach ten more communities? Or a hundred?
The next frontier for the nonprofit sector is not simply innovation. It is bringing what works to more people and communities.
That requires more than collaboration or sharing best practices.
It takes intentional investment in leadership, technical expertise, financing, and partnerships that allow organizations to learn from one another and adapt effective approaches to their own communities.
It also requires recognizing that no single organization can solve the challenges facing our communities alone.
Consider housing insecurity. Addressing it requires more than building homes. It requires bringing together housing providers, health systems, financial institutions, community organizations, and public and private partners. Each brings different expertise and resources. Together, they can accomplish what no single organization could achieve independently.
The same is true for improving access to care, supporting older adults, and strengthening families.
We also need to rethink how we measure success.
The number of programs launched, organizations engaged, or dollars raised tells us something about our work. But those measures alone do not tell us whether we are creating lasting change.
Are organizations stronger? Are effective approaches reaching more communities? Are more people able to access housing, care, and opportunity? Are we building partnerships and attracting investment that will sustain progress?
The goal is not simply to grow organizations or replicate programs. It is to create more value for communities by bringing effective approaches to more people.
The opportunity in 2027 is to move beyond individual organizational success and create the conditions for greater impact together.
3. Philanthropy Is Changing. Our Approach Must Change Too.
The way wealth is held, managed, and deployed is changing.
At the end of fiscal year 2024, nearly $328 billion was held in donor-advised funds alone. At the same time, growing concentrations of private wealth, philanthropic LLCs, impact investing, and new approaches to giving are reshaping the philanthropic landscape.
These changes present both challenges and opportunities for nonprofits.
Traditional fundraising approaches will remain important, but they will not be enough.
We need to understand how donors and investors are thinking about the future, what motivates their giving, and how they want to engage in creating change.
Increasingly, the conversation is not simply about supporting an organization or funding a program. It is about the opportunity to address a challenge, demonstrate results, and create lasting impact.
That requires nonprofit leaders to think differently about how we build relationships and make the case for investment.
We must be able to articulate not only what we do, but the value we create. We need to demonstrate results, identify opportunities for growth, and bring partners together around shared ambitions.
And philanthropy needs to evolve as well.
If we want lasting impact, we must be willing to invest in more than individual programs. We need philanthropic capital that strengthens leadership, builds organizational capacity, supports collaboration, and allows effective approaches to reach more communities.
This also means recognizing that different kinds of capital can play different roles. Philanthropic funding can support innovation and early-stage work. Patient and catalytic capital can make new approaches possible. Public and private investment can sustain and expand what works.
The opportunity is to connect these resources more intentionally to the needs and ambitions of our communities.
The return on investment is not measured in financial gain for shareholders, but in stronger communities, greater opportunity, and improvements in people’s lives.
The question is not simply how we raise more money. It is how we connect philanthropic capital with opportunities to create lasting change.
Looking Ahead
The nonprofit sector has a distinctive role in American life. We bring people together, respond to needs that markets and government alone cannot meet, and reinvest in the communities we serve.
That is both our responsibility and our opportunity.
In 2027, we have an opportunity to rethink how we lead, how we work together, and how we attract investment. Not simply to sustain our organizations, but to strengthen a sector whose success is measured by the value it creates for people and communities.
Because ultimately, when we invest in the nonprofit sector, we invest in the future of our communities.
*****
Alesia Frerichs is president and CEO of Lutheran Services In America.
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