It’s that time of year again! I’m breaking out my (foggy) crystal ball for 2025 and offering some conversation starters, opinions and predictions for the philanthropic sector in the year ahead and tips for navigating possible changes.
What are your thoughts on the opportunities and challenges nonprofits will face in 2025? I hope you’ll join the conversation here on LinkedIn!
1. The transition of power in the U.S. government will result in mixed impacts on philanthropy and will serve as a reminder to focus efforts on private philanthropy.
You don’t need a crystal ball to know that federal grants and investments will be diminished for some causes and increased for others with the changing of the guard. It’s been promised already, and in fact, just yesterday, you’re likely aware that the White House ordered a temporary pause on ALL federal loans and grants as it assesses programs to gauge their alignment with the Trump administration’s priorities. (The pause has been rescinded, thankfully, as of January 29th.)
For sectors and programs facing a diminished grant pool, traditionally, individuals usually step up in the U.S. to help fill the gap IF the case is strong. Over the years, I have seen many organizations use this shift to their advantage, and smart organizations have already planned to accelerate their push into the private sector, where fewer strings are attached to gifts and grants.
As individual donors make up most of the philanthropic giving in the country, organizations that focus fundraising efforts on this sector will often see an increase in overall giving. Also, reducing reliance on federal funding can serve as a vital survival tactic.
Given the recent order that all federal loans and grant spending be temporarily paused, it is clear that taking action to reduce reliance on federal funding is more important than ever. We, of course, encourage you to contact your local and national legislative representatives, but we continue to feel optimistic about the solution of the private sector. After all, the government and its priorities will continue to change, but the hearts of human beings will not. However, this is the time to strengthen your case for support and lean heavily into relationship-based fundraising practices, as competition for private dollars will no doubt increase.
Another side of the election outcome may ultimately result in increased corporate giving and foundation growth in donors’ portfolios. The impact of these increases on giving overall could be significant.
2. Dealing with the aftermath of wars and natural disasters internationally will stretch NGOs and resources around the globe.
NGOs will be hard-pressed to meet demands for medical, educational, and structural rebuilding and all other resources needed to redevelop numerous parts of the world post-war. Domestically, philanthropy is also playing a significant role in areas of the southeast that were hit hard by hurricanes and tornadoes at the end of 2024 and are being called upon to help do the same in the wake of the fires in the Los Angeles area, especially as insurance costs have soared or coverage has been dropped in these regions.
At a time when global nationalism seems to be surging, and the world’s needs are in the highest demand since the end of WWII, philanthropic organizations will be leaned on in 2025 to participate in rebuilding communities and regions more than they ever have in terms of real dollars. This presents an opportunity for organizations to raise more funds, but it also presents a real crisis that may overburden NGOs.
Philanthropy cannot fill these gaps on its own. Still, our sector is an important participant in the three-pronged system that creates sustainable solutions to these massive undertakings.
- Philanthropy serves as a catalyst, starting the work and showing potential.
- The government has the ability to build on this success and scale the solution.
- The private sector sees the opportunity to build an economy around the solution. When people are paid to do the right thing, we get sustainable solutions.
3. As predicted last year, artificial intelligence is a part of fundraising more and more every week. However, there are a few warnings…
In my “conversations” with AI, the program confesses it has no morals, ethics, human experience, or personal experience. It simply relies on input. So, it seems unwise to let that faculty run your life. AI is just a tool that fundraisers can selectively use for data, starter structures and information.
Keep up with the latest that AI can do to make your daily tasks more efficient, but use it as a starting point. Let’s all remember that organizations are built around human engagement, and while data is vital, emotional intelligence (EI) must be the driver companion for successful institutions in this space. EI will always beat out AI.
4. Higher education must adapt quickly as the “demographic cliff” drop-off begins in 2025.
Higher education has dealt with declining numbers of applicants since Covid. However, in the fall of 2025, it is predicted that the number of students applying to colleges will begin to drop off even more steeply, in what is being called a “demographic cliff” because there are fewer 18-year-olds in the U.S. due to declining birth rates that started in 2007, among other factors. My source, this article from NPR, offers very interesting data on the subject.
More than ever, in 2025, colleges and universities, especially smaller schools, will need to have strong cases for support to justify the value of their education and tightly run fundraising operations, as well as find creative ways to adapt to this new reality and remain profitable. But remember, fundraising is no substitute for tuition-paying students in seats.
As I recommend to every organization and leader in the sector, keep a steady hand at the wheel but always remain flexible so you are ready to adapt to surprises – which may mean taking advantage of new opportunities or ducking challenges! Let’s “use the problems” to our advantage!!
Again, I hope you’ll let us know your thoughts on what 2025 has in store for us by joining the conversation here on LinkedIn!
The Carter team wishes you all the best in the year ahead. Should you ever need support or guidance, you know where to find us, and we would be honored to be your partner in advancing your mission.
About the Author

Bob Carter, CFRE - Chairman
Bob Carter, CFRE, is one of the world’s most respected, experienced and recognized experts in institutional strategy and philanthropy. During the past four decades, Bob has strengthened a variety of organizations throughout the world by helping them overcome challenges and capitalize on opportunities to be successful. Bob is currently serving as a member of the Board of the World Health Organization (WHO) Foundation, where he is a founding board member, and he is Chair Emeritus of the Association of Fundraising Professionals (AFP) International Board of Directors. Learn more about Bob here.
About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.