Nonprofit Recession Strategy: A Field Guide to Leading Through Economic Uncertainty

Recession PreparationStrategy: A Field Guide for Nonprofits

As an elder millennial, I’ve had a front-row seat to a few defining economic moments—9/11, the 2008 banking crisis, the early chaos of COVID… and now, whatever it is we’re heading into next.

If you’re leading a nonprofit right now, I don’t need to tell you the economy feels wobbly. Inflation, donor uncertainty, staffing stress, rising costs—yep, it’s all real. And unfortunately, “ride it out” isn’t much of a plan.

But here’s what I can tell you: I’ve walked with leaders through every one of those moments. And the organizations that come out stronger aren’t the ones with the biggest budgets—they’re the ones with clarity, adaptability, and a deep commitment to their people.

This post is a field guide for whatever’s coming next. Whether you're running a scrappy community org or a $20M+ nonprofit, here's how to lead well when the road gets bumpy.

If You’re Small (Under $5M)

• Focus, focus, focus. Now's not the time to be everything to everyone. Protect the core of your mission. Let go of programs or projects that stretch you too thin or stray from your strategic focus.

• Talk to your donors. Pick up the phone. Send that email. Be real about where you are and what you need. Donors want to help—they just need to be invited into the story.

• Stabilize your systems. You don’t need a million-dollar tech stack, but you do need systems that make your team’s job easier. Get your books in order. Tighten your budget. Use tools that help—not hinder—collaboration.

• Don’t cut your people first. It's tempting to slash professional development or pull back on team care, but it’s a short-sighted move. Investing in your team—even with limited resources—will save you turnover headaches (and dollars) later.

If You’re Midsize ($5M–$20M)

• Build a recession response plan. What happens if you lose 10%, 20%, or even 30% of your revenue? What gets prioritized? What gets paused? Who decides? Answer those questions now—not when you're in crisis mode.

• Invest in your people. Seriously. Resist the urge to “trim the fat” by eliminating things like training budgets, wellness stipends, or leadership coaching. These are the exact tools that keep your team grounded and loyal in unstable times.

• Strengthen your funding mix. If you're over-reliant on one or two major funders, now is the time to diversify. Look into earned income strategies, new grant streams, or even partnerships that bring in shared revenue or shared services.

• Communicate with care and candor. In uncertain times, silence creates fear. Your team needs to know what you’re seeing, how you’re thinking, and where you’re headed. Even if the answer is “we’re figuring it out”—say that.

If You’re Large ($20M+)

• Remember your influence. Your decisions ripple across the sector. Use your platform to advocate for funding flexibility, trust-based practices, and investments in nonprofit infrastructure.

• Look down the ladder. How are you supporting smaller orgs in your ecosystem and their recession strategy? Consider subgranting, joint fundraising efforts, or infrastructure-sharing models that build collective resilience.

• Future-proof your workforce. Large orgs often carry more weight in HR budgets—and more opportunity for innovation. Reimagine retention strategies. Use this moment to upgrade your leadership pipeline, prioritize internal advancement, and bring DEI into every level of staffing.

• Don’t assume your people feel secure. Big orgs don’t feel big to the people inside them. They feel like teams. Departments. Often silos. Make sure you’re checking in, not just checking boxes. Create real, ongoing opportunities for your staff to grow and be heard.

Final Thought

If there’s one thing I’ve learned from living through these waves of disruption, it’s that leadership in nonprofits has never just been about survival—it’s about stewardship. Of your mission. Of your people. Of the communities counting on you.

So before you cut the professional development budget, lay off your ops manager, or put your team in a holding pattern—pause. Ask: how do we care well for the people who are the work?

And if you’re not sure where to start, you don’t have to go it alone.

Let’s Talk. We’re helping nonprofits of all sizes think clearly, plan wisely, and show up with heart—especially in messy moments like this. Book a discovery call with The Collaborative Collective. It’s not a sales pitch. Just a space to talk honestly about what you're facing and how we might help.