Our nonprofit neighbours to the South are struggling. We sit and watch, offer support where possible, but feel the pain they are going through. We can only imagine waking up to find our funding gone overnight, our organizations in political crosshairs and being the “bad guys”.
However, Canadian nonprofits are not immune to the impact of the political turmoil going on down south. With Trump’s new tariffs on Canadian goods in full effect, economic pressures are set to rise. For nonprofits, this isn’t just about trade policy—it’s about real people needing more support at a time when funding may become even harder to secure.
Higher prices, job losses, and economic uncertainty will create a perfect storm of rising demand for nonprofit services while straining their financial and operational capacity. Organizations must prepare for shifts in service demand, donor behavior, and government funding to stay ahead of the challenges ahead. What will this mean for Canadian nonprofits and their teams? Here are some thoughts:
A Surge in Demand for Essential Services
The first trend I think we will see, depending on the length of these tarrifs, is an increase in demand for services. As the economy slows, nonprofits will be on the frontlines, dealing with a dramatic rise in people needing support. Several key areas will be hit hardest:
Food Security & Hunger Relief
With rising inflation and job losses, more families will struggle to afford groceries, driving up demand for food banks and meal programs. Urban centers, where the cost of living is already high, will feel the brunt of this crisis.
Housing & Homelessness Services
As economic instability puts more pressure on renters, nonprofits providing rental assistance, emergency shelters, and homelessness prevention programs will be stretched to their limits. At the same time, affordable housing projects may slow down or stall altogether due to higher construction costs from tariffs on building materials.
Employment & Workforce Support
If tariffs lead to manufacturing and trade job losses, more people will turn to job training, resume workshops, and career counseling services to get back on their feet. The demand for skills development programs will skyrocket.
Mental Health & Crisis Intervention
Economic stress often triggers higher rates of anxiety, depression, substance abuse, and domestic violence. Nonprofits supporting mental health services, crisis hotlines, and family support programs must prepare for an influx of people needing help—at a time when funding may be harder to secure.
Immigration & Refugee Services
If Trump tightens U.S. immigration policies, more asylum seekers could come to Canada, increasing demand for legal aid, housing, and employment support programs for newcomers. This will put added strain on nonprofits that are already stretched thin.
Declining Donations and Government Funding
The second issue I think we will face, is a greater challenge with fundraising and again, depending on the length of the tariffs, declining grants. Just as demand for services rises, the economic downturn could make fundraising more challenging.
Smaller Donations from Individuals
When money is tight, many households cut back on charitable giving. Small-dollar donations, which make up a large portion of nonprofit revenue, could decline as families focus on their own financial stability.
Reduced Corporate Sponsorships
Businesses facing tariff-related costs may scale back charitable giving and sponsorships. Some may shift their donations toward direct lobbying and advocacy efforts instead.
Government Budget Cuts
If tax revenues fall due to slower economic growth, governments may freeze or cut grants and funding for social programs. This could leave nonprofits responsible for filling even more gaps—without additional financial support.
Higher Operating Costs & Strains on Nonprofit Staff
The third meta trend, will be increased operating costs. Even as funding becomes more uncertain, the cost of running a nonprofit is about to get more expensive.
Rising Costs of Goods and Services
- Tariffs will make food, construction materials, fuel, and technology more expensive, impacting everything from food banks to affordable housing projects.
- Nonprofits that rely on supplies from the U.S. may see higher costs for essential materials, forcing them to scale back programs or find alternative suppliers.
Burnout and Staffing Challenges
- Many nonprofits already struggle to retain staff due to low wages and high workloads. If demand increases while funding shrinks, staff burnout and turnover will accelerate.
- Organizations that rely on volunteers may struggle to recruit and retain them, especially if people are working longer hours to deal with their own financial stress.
Tougher Competition for Grant Funding
- More nonprofits will be competing for the same limited pool of funds, forcing organizations to spend more time and resources on grant applications and donor engagement.
How Nonprofits Can Adapt and Stay Resilient
Given these challenges, nonprofits need to rethink their strategies and prepare for economic volatility. Here’s what organizations can do now:
Advocate for Government Support
- Push for policy changes that protect nonprofit funding and ensure the sector is included in economic recovery plans. It is easy to remember manufacturing plants, less to remember the organizations supporting people from the fallout.
- Engage with policymakers to secure tax incentives for charitable giving to offset declining donations.
Strengthen Partnerships & Collaborations
- Work with other nonprofits, businesses, and government agencies to share resources, avoid duplication, and maximize impact.
- Form coalitions with organizations in similar fields (housing, mental health, food security) to lobby for funding together.
Diversify Funding Sources
- Look beyond traditional donations and explore:
- Social enterprises that generate revenue for the organization.
- Fee-based services for those who can afford them while maintaining support for those in need.
- Impact investing and alternative funding models.
Double Down on Digital Fundraising
- As in-person events and sponsorships decline, nonprofits must expand digital fundraising efforts.
- Use AI and automation tools to personalize donor engagement and streamline outreach.
- Lean into peer-to-peer fundraising and crowdfunding platforms to tap into grassroots support.
Prepare for Different Economic Scenarios
- Nonprofits should build contingency plans to navigate funding shortages or sudden spikes in demand.
- Investing in data collection and impact measurement will help organizations make stronger cases for funding and demonstrate their value to donors and policymakers.
The Road Ahead: A Defining Moment for Canadian Nonprofits
Trump’s trade policies will exacerbate economic uncertainty, increase poverty, and put more pressure on nonprofits. Many organizations will be forced to do more with less—at a time when their services have never been more critical.
Yet, this moment also presents an opportunity. Nonprofits that innovate, strengthen partnerships, and adapt to the new economic landscape will not only survive but emerge stronger. The coming years will be challenging, but for organizations that stay strategic, proactive, and resilient, this could be a defining moment to drive lasting impact in their communities.
Carmen Reis is the Co-Founder of Pharo Academy and a 15 year practitioner in the non-profit sector.