Nonprofit accounting is in crisis. It has been building for years, and most organizations are feeling it whether they can name it or not.

A quick note before we get into it: this post is going out on April 8th, which means a lot of accountants, CPAs, and bookkeepers are currently in the middle of the most relentless stretch of their year, filing tax returns, wrapping up audits, and grinding through 990s on timelines that do not care about weekends. This piece is not aimed at them. It's aimed at the systems and structures that have made their jobs harder and left too many nonprofits without the financial support they need. If you are one of those people currently running on coffee and spreadsheets, bookmark this for April 16th. I hope you find something useful in it. And maybe, when you come up for air, you'll think of a colleague with some nonprofit finance curiosity who needs a nudge in the right direction.

Approximately 300,000 accountants and auditors left their positions in the past three years, and as of 2024, roughly 75% of CPAs are Baby Boomers approaching retirement age. Madrasaccountancy Meanwhile, only 1.4% of college students chose accounting as a major in 2023, down from 4% just a decade ago. Mondial Software

For nonprofits, this crisis lands differently. And harder.

I am not an accountant. But early in my career as a grant writer at smaller organizations, I became fluent in nonprofit accounting basics out of necessity. The organizations I worked for often had accounting functions staffed at a fraction of a single FTE, sometimes bundled with HR, operations, and whatever else needed a home. The accountants I encountered ranged from excellent but overextended to, in a few cases, a little clueless about restricted funds. Either way, I learned fast that a grant budget or financial report is only as accurate as the information behind it, and that information was my responsibility to understand.

That lesson has stayed with me. And the environment that produced it is getting worse.

The Generational Problem: A Pipeline Running Dry

What we're facing is structural. As experienced CPAs step away, they take decades of institutional knowledge with them, leaving firms and finance teams with gaps that can't be filled quickly by junior hires. Accounting expertise compounds over time. Replacing a senior professional isn't just about filling a seat; it requires years of training, client exposure, and judgment that can't be rushed. Ramp

The traditional model, where experienced accountants mentored the next generation into the work, has been breaking down for years. Some older practitioners looking to retire or sell their firms are finding no buyers or successors, leaving clients with nowhere to go. Caytogroup The knowledge walking out the door isn't only technical. It's contextual. Knowing how to read a situation, ask the right questions, and flag what actually matters.

Why Nonprofits Feel It More

Every sector is dealing with this shortage. Nonprofits are dealing with it in ways that are specific to their operations.

First, nonprofit accounting is a specialty, and most Certified Public Accountants (CPAs) don't study it unless they actively work in the sector. Nonprofits follow Generally Accepted Accounting Principles (GAAP), the same foundational rules that govern for-profit accounting, but the Financial Accounting Standards Board (FASB) also maintains a separate set of standards specific to nonprofits, updated periodically through what are called Accounting Standards Updates (ASUs). CPA Journal The updates that matter most to nonprofits cover how donated revenue gets recognized, how restricted and unrestricted funds are classified, how a grant with conditions attached differs from one without, and how organizations can spend from endowments. Two worth knowing by name: the 2016 update (ASU 2016-14) simplified how net assets are reported, reducing three categories down to two: funds with donor restrictions and funds without. The 2018 update (ASU 2018-08) clarified how grants and contracts are classified and when revenue from them can officially be counted. These aren't small technicalities. They determine how a major gift gets recorded and what your financial statements say to funders reviewing them.

Second, nonprofits have a hard time offering competitive compensation for accounting talent, competing with for-profit firms that face entirely different budget realities.

Third, and most immediately pressing for smaller organizations: CPA firms, facing their own capacity constraints, have been dropping smaller nonprofit clients or significantly raising fees. Many nonprofits need annual audits or reviews to comply with government grants, funders, or state registration requirements, meaning they end up paying more for less access. National Council of Nonprofits

A Particular Risk for Service Organizations and Fiscal Sponsors

The accounting crisis is hitting service organizations, including fiscal sponsors, especially hard. Fiscal sponsors exist specifically to provide administrative and financial infrastructure for projects and programs run by others. That model only works if the sponsor has financially astute leadership, staff, and board members who genuinely understand nonprofit finance. When that expertise is thin or absent, the consequences ripple out to every project under the sponsor's umbrella.

We have seen fiscal sponsors in Philadelphia and elsewhere close their doors or watch revenue drop precipitously year over year. The accounting crisis is part of that picture. So is a longstanding funding problem: many funders are reluctant to support service organizations directly, and some service organizations have not built the kind of funder relationships or viable programmatic case that would change that calculus. Dropping a general operating budget request in front of a funder without a compelling program narrative or a track record of financial stewardship is not a fundraising strategy. It's a wish. Fiscal sponsors that want to survive this environment need strong financial management and equally strong development practice. The two are inseparable.

The Part That Lands on Fundraisers

In partnership with organizational leadership, fundraisers are typically the primary relationship-holders with funders; the accounting staff stays behind the scenes. When restricted funds get spent on the wrong things, or a budget needs to be amended mid-grant, or a funder asks hard questions, someone from the development team is frequently in the room. Early in my career, I was in that room more than once, helping to explain what happened and, more importantly, rebuilding confidence that it wouldn't happen again. That's not the most comfortable way to learn fund accounting, but it's effective.

I want to be clear: mismanagement of restricted funds is rarely malicious. It's usually a combination of inadequate systems, overextended staff, and a genuine lack of clarity about what donor restrictions mean day-to-day. That context matters and doesn't change what the fundraiser is left navigating.

There's also the entirely normal, expected situation: a grant is awarded for a specific purpose, circumstances shift mid-year, costs change, a staff member leaves, and the budget submitted six months ago no longer reflects reality. At that point, someone in the organization needs to recognize that, document it accurately, and request a budget modification from the funder. That conversation requires accounting literacy. It also requires a decent relationship with the funder, which, again, is the fundraiser's domain.

What Non-Accountant Nonprofit Staff Can Do

You don't need to become a CPA. Some baseline knowledge goes a long way.

Understand how your organization classifies revenue. Know the difference between restricted and unrestricted funds, and between conditional and unconditional contributions. Know which grants have specific conditions attached, what those conditions are, and who in your organization tracks whether they've been met.

Build a real relationship with your finance team. If a brief monthly touchpoint between development and accounting is possible, use it. Even 20 minutes creates shared awareness that prevents much larger problems later.

Get comfortable asking: if a gift has donor restrictions, how does that get recorded, and who is responsible for tracking it? When do those restrictions expire or get released, and how will you know? If we need to request a budget modification from a funder, what's the process, and who owns it? If those questions feel awkward to raise, that's exactly why they're worth raising.

Accounting Software: Not Optional

One more thing that belongs in this conversation is technology. Accounting software is not a nice-to-have anymore. QuickBooks, Sage Intacct, Financial Edge, the specific platform matters less than the fact that your accounting staff know how to use one fluently and in concert with your auditor's requirements. Real-time fund balances, restricted revenue tracking, expense allocation, grant reporting: none of that happens reliably on paper or in someone's head.

I say this as someone who is not an accountant and can still navigate QuickBooks well enough to pull the reports I need. The translation from a handwritten ledger to rows and columns on a screen is not the leap it can feel like. If someone on your accounting team is resistant to making that transition, that's a staffing conversation worth having. The sector is too under-resourced, and the compliance stakes are too high, to carry resistance masking a major risk.

What the Sector Needs

The individual-level work matters. It's also not sufficient on its own.

The nonprofit sector needs to treat cross-training between finance and program staff as standard practice rather than an exception. It needs to adequately fund accounting and finance roles rather than treat them as administrative afterthoughts. It needs to build pipelines for nonprofit-specific financial training that extend beyond CPA firms and into the organizations themselves, reaching executive directors, development directors, and program staff who interact with restricted funding on a regular basis.

And when an organization is lucky enough to have a genuinely strong CFO, someone who understands the numbers, tells it straight, and works alongside fundraising and program leadership to find a path through hard stretches, hold on to them. These are the unsung heroes of the sector. They tend to appear more often at larger institutions, but the people who learn from them don't always stay at larger institutions. Some of those colleagues move on to smaller organizations, carrying that knowledge with them. That's how good financial practice spreads. It's also, quietly, how the sector sustains itself. For organizations under $10 million, access to that caliber of financial thinking, whether on staff or through a trusted consultant, can be the difference between weathering a rough year and not.

The organizations that take this seriously now, before the audit, before the funder question, before the budget crisis, are the ones that build the kind of financial infrastructure that actually sustains a mission. That's the work.

In Mel Brooks' Blazing Saddles, Lili Von Shtupp sings "I'm Tired." Tired of performing. Tired of being used up and undervalued. Tired of having all the power and none of the credit.

If that doesn't describe the average development director, I don't know what does.

March is Women's History Month. It's also the month I find myself thinking about the nonprofit sector's most persistent challenge: women do most of the work that keeps this sector running, and are paid like that's fine.

Well, it’s not fine. 

The Nonprofit Workforce: Women Do Most of It

Start with the basic numbers. Women make up approximately 75% of the nonprofit workforce. Fundraising, program delivery, administration, and executive leadership at smaller organizations - the sector runs on women's labor.

The compensation doesn't match. Women earn around 25% less than men in the nonprofit sector, according to research by the National Council of Nonprofits. Candid's 2024 Nonprofit Compensation Report, which analyzed data from more than 128,000 tax-exempt organizations, found the gender pay gap in CEO compensation persists - particularly at organizations with larger budgets. 

And for women of color, the gap is wider. Black women earned 66.5 cents per dollar that white men earned. Latinas earned 58 cents - a gap of 42%, more than twice the average for all women. Those disparities hold across education levels, occupation groups, and states. Credentials and experience don't close them.

The Leadership Gap: A Sector with More Work to Do

Despite women making up 75% of nonprofit workers, only 22% of nonprofits are led by a woman executive director or CEO. Only 42% of nonprofit boards are chaired by women, and that number drops to 33% at organizations with incomes of $25 million or more. 

The nonprofit sector exists, in many cases, to advance equity in the communities it serves. Closing the gap internally is part of that work too - and it's worth naming that openly.

There's a term for what happens in female-dominated fields: the glass escalator. Men in female-dominated occupations often rise faster and more smoothly to leadership than women - not always because of individual decisions, but because of systemic dynamics and gender stereotypes that fast-track men even when the pool of qualified women is deep.

In fundraising specifically, this plays out in compensation benchmarks, job descriptions, and who gets taken seriously in a salary negotiation.

Development Directors: The Specific Case

Development directors are worth examining because it is here that the fundraising capacity crisis and pay equity converge.

The development director role is overwhelmingly held by women. It is also chronically underpaid relative to the revenue it generates and the complexity it requires. Organizations often budget for development staff at the low end of what the market will bear, and then face repeated turnover cycles that cost more in the long run.

Nearly 1 in 3 nonprofits struggle with retention and turnover, and 59% reported to Social Current that it was significantly harder to fill staff positions in 2024 than in previous years. Meanwhile, 55% cite the inability to offer competitive salaries as a significant challenge.

That challenge lands hardest on roles disproportionately held by women.

What This Costs Organizations

Underpaying development staff is not a budget strategy. It's a false economy.

Research on nonprofit compensation notes that a sizable gender pay gap can affect the sector's long-term vitality - when women perceive compensation practices to be unfair, they may step back from leadership roles altogether, which costs nonprofits experienced managers and talent at exactly the moment the sector needs them most.

When a development director leaves, the organization loses donor relationships, institutional knowledge, and fundraising momentum. The cost of a search, onboarding time, and the dip in performance while someone new gets up to speed almost always exceeds what a market-rate salary would have cost to begin with.

What Women's History Month Is Asking of This Sector

The ask is practical. Benchmark your compensation honestly - against current market data, not what you paid three years ago. If your development director manages donor relationships, writes grants, stewards major donors, and keeps your organization financially stable, pay her accordingly. If she's a woman of color doing all of that, the data suggests she may be earning even less. That's a gap organizations have the power to close.

Lili Von Shtupp was tired of performing for an audience that took her for granted. She deserved better. So do the women running development offices across this sector - and the good news is, the fix is actually within reach.

Last year tested everyone in ways we didn't expect. For many in the nonprofit sector, 2025 felt relentless. Friends and colleagues faced similar upheaval alongside personal losses and mounting burnout. As members of the sandwich generation, we found ourselves managing multiple family members who needed more attention in different ways than they had before.

Watching people I care about struggle was trying. This year didn't require explanation to anyone who lived through it. Everyone deserved the grace to get through with as little damage as possible.

Here's what organizations forget during challenging times: your volunteers, board members, and donors are navigating all of this while choosing to support your mission. They're whole people with jobs, families, health challenges, and stress you'll never fully know about. How you treat them during both ordinary times and crisis moments determines whether they stay engaged or quietly step back.

When Organizations Get It Right: Volunteer Appreciation That Builds Long-Term Engagement

Two organizations taught me what genuine appreciation looks like in practice, and both lessons came more than a decade apart.

Over 20 years ago, I started volunteering with a healthcare access organization. Within my first few months, my grandfather and my ex's grandfather both died within weeks of each other. The organization sent condolence cards. They told me to take my time returning to the schedule. They checked in on me as a person, not because they needed me back for coverage.

I hadn't donated a penny yet. They simply saw me as human first, volunteer second.

The program leadership changed over the years, but that culture stayed consistent. I'm still volunteering with them because they recognize that the work demands emotional investment alongside time. The role involves navigating high-stress situations regularly and supporting people during vulnerable moments. I keep showing up because the organization demonstrates we're in this together. That's a relationship I've valued for over two decades, and it's shaped how I think about volunteer management ever since.

More recently, a giving circle I am considering joining told prospective members upfront: "You can be as involved as you want to be, and we expect that to change over time." That transparency is refreshing in a sector that often treats fluctuating capacity as a sign of commitment failure. This group acknowledges that life circumstances shift. They build flexibility into their model rather than demanding consistent participation regardless of what members are managing in their personal lives. That's one of many reasons I'll be getting more involved with them this year.

The Board Member Burden: Board Member Engagement and Volunteer Retention Strategies

Nonprofits need to think about flexibility when it comes to boards. Board members are volunteers who take on legal liability and governance responsibilities by choice. We've become rigid about ensuring board members deliver the seven T's: time, talent, treasure, ties, testimony, tenacity, and whatever seventh T you prefer. When organizations expect all of those consistently and simultaneously without acknowledging that board members are whole people with lives beyond your mission, the eighth T becomes "Take me away!" as that old Calgon commercial declared.

I've held volunteer programs at other nonprofits to that same standard ever since my early experience. It's probably too high a bar for most organizations. But that first organization understood something fundamental: volunteering wasn't just about donating hours. It was an emotional investment requiring support and genuine appreciation, not performative gratitude.

How We Can Do Better: Sustainable Nonprofit Volunteer and Board Management Practices

From an organizational perspective, building flexibility into volunteer and board structures is no longer optional. The sector faces unprecedented turnover as people leave nonprofit work entirely or move between organizations in search of better conditions. People are exhausted. Your volunteers and board members face the same pressures as your staff. They're managing caregiving responsibilities, job uncertainty, health challenges, and burnout while trying to show up for your mission.

Create explicit flexibility frameworks rather than treating capacity changes as failures. The giving circle model I mentioned works because expectations are transparent from the start. Tell board members and volunteers what you need, when engagement levels can flex, and how to communicate when life demands their attention elsewhere temporarily.

Leadership staff need to check in without asking for something. Those condolence cards mattered because they came with zero strings attached. Personal connection strengthens relationships more than constant requests for participation or contributions. When someone on your board or in your volunteer corps is managing a crisis, checking in as a human rather than as an organizational representative makes all the difference.

Board perspectives matter too. If you're serving on a board, feeling overwhelmed or confused by expectations, name that reality with your fellow board members and executive leadership. The organizations that retain engaged boards are the ones where honest conversations about capacity happen before people quietly resign.

For consultants and fractional professionals like me, this means building capacity awareness into every engagement. When I work with organizations on fundraising strategy or board development, we talk about sustainable practices given actual resources. Implementing systems that acknowledge humans have limits creates conditions where both staff and volunteers can succeed.

Why This Matters Now: Building Lasting Relationships with Nonprofit Volunteers and Donors

This year will bring challenges we can't predict. The nonprofits building lasting relationships with volunteers, board members, and donors will be the ones treating them as whole people navigating complex lives. Show genuine appreciation, not performative gratitude. Check in personally without an agenda. Build flexibility into expectations instead of treating temporary capacity shifts as failures. Recognize that everyone's engagement will ebb and flow based on circumstances beyond your organization's control.

When I think about peace, progress, and joy as values guiding my work in 2026, treating people as whole humans sits at the center of all three. Peace comes from sustainable relationships rather than transactional ones. Progress requires acknowledging that capacity changes over time. Joy emerges when people feel genuinely valued for who they are, not just what they contribute to your mission.

Let's be sure to show our volunteers, board members, and donors love and genuine appreciation. And if you're volunteering your time and expertise, extend that same grace to yourself. Love is peace. Love makes progress. Love brings joy.

I'm in a go-with-the-flow mode right now, taking the spirit of the season of renewal seriously. But I don't do resolutions, and I don't do intentions. They both feel too soft for me. I set goals, and this year I'm grounding them in the values I'll be focusing on in 2026: peace, progress, and joy. For me and the people around me - family, friends, clients, colleagues.

This is also the time of year to consider what to keep, what to bring on, and what to move away from. Keeping doesn't mean keeping it the same. If you always do what you've always done, you'll always get what you've always gotten. It means keep it, but evolve. Progress.

Progress doesn't mean all new. It can mean moving beyond or away from. Because, frankly, if you're impeding my progress or your own, you're not bringing me or yourself joy. We'll be parting ways soon. So let me be clear about where I'm putting my energy in 2026.

What Sustainable Nonprofit Management Looks Like

I'm keeping my commitment to practical, capacity-appropriate guidance for small nonprofits, but evolving how I deliver it. For years, I've watched organizations chase industry "best practices" designed for shops with full development teams. A solo fundraiser trying to implement the same stewardship timeline as a five-person department isn't demonstrating excellence - they're heading toward burnout.

This evolution shows up in my fractional fundraising work constantly. When a client says, "We know we should be doing X," my first question is always, "Says who?" If the answer is "best practices" or "that's what big organizations do," we're having the wrong conversation. The right question is: what does your organization need, given your actual capacity and donor base? Automated email receipts sent immediately beat handwritten notes delayed three months. A simple three-metric dashboard you actually use beats comprehensive analytics you never open.

I'm bringing on more explicit advocacy for sustainable fundraising practices and stronger organizational leadership. The sector faces both a staffing crisis and a problem with management, governance, and systems.

According to the 2025 Social Impact Staff Retention survey, 67% of nonprofit employees plan to seek new jobs this year, with arts and culture organizations facing a potential exodus of 92%. The top reason? Too much responsibility without adequate support. We keep talking about staff retention in nonprofits without changing the conditions creating the crisis.

Executive directors need to make hard choices about what not to do. Boards need to understand that their role extends beyond meeting attendance to include active advocacy for the mission through thoughtful engagement. Organizations need to build systems that support staff rather than overwhelm them. Leadership clarity about organizational priorities creates the conditions for success.

Why Fractional Support Builds Capacity

This connects directly to why fractional professionals are a great fit for nonprofit organizations. When an organization brings me in for grant writing or transition management, we're not just accomplishing those tasks - we're building nonprofit capacity by reducing overwhelming workload and creating breathing room for existing staff to focus on relationship-building. Peace comes from sustainable systems. Progress requires adequate support. Joy emerges when people can focus their energy on work that matters instead of constantly operating in crisis mode.

I'm moving away from working with organizations that view their team as interchangeable parts rather than humans with limits. When a prospective client tells me they need someone to "raise $500K in six months" but can't articulate their donor pipeline, their board's engagement level, or what specific need the funding addresses - that's a red flag. When organizations expect consultants to work on commission or "volunteer time until we raise money," they're signaling they don't value fundraising as professional work requiring expertise and strategy. I'm moving away from these situations because they impede progress for everyone involved.

Strategic Choices for Small Nonprofit Leaders

Small nonprofit management faces particular pressure to do everything everyone else is doing. Limited capacity means saying no becomes a strategic necessity, not a luxury. When you're running development solo or with minimal staff, you can't compete on the same playing field as organizations with full teams. You compete by being smarter about where you focus energy.

This means keeping donor stewardship but evolving it to match your capacity. It means bringing on board engagement strategies that deliver real help rather than performative involvement. It means moving away from fundraising trends designed for organizations with resources you don't have.

The strongest small nonprofits I work with have learned to ask: Does this serve our mission, given our actual resources? If yes, how do we do it sustainably? If no, what do we do instead? That's the peace, progress, and joy approach in action.

This is how I'm approaching 2026 - with clear values guiding hard choices about where to invest my time and energy. When you ground your decisions in what actually matters, you give yourself permission to keep what works while letting go of what doesn't. You create space for progress that serves your mission and your team. The sector needs more of us to make these intentional decisions about sustainable nonprofit management.