The Biggest Problems Facing Churches And Nonprofits

Introduction

Over the past few years, we all have seen some truly crazy things. A worldwide pandemic that led governments to shut down routine operations. A full scale war breaks out in Eastern Europe. Soaring inflation and concern over the health of the global economy. Many people might only focus on the organizations that are being mentioned consistently as being the ones affected by these changes such as oil, tech, or manufacturing companies. Nonprofit organizations and churches in the United States are not getting their due notice for the problems they are facing as a direct result of these unfortunate events. This is exactly what we're going to be talking about today: The problems facing these critical organizations, why they are a problem, and possible solutions that can be implemented.

Rising Costs and Financial Uncertainty

Of course, I would be remiss if I didn't mention the number one problem facing Americans every day. Inflation has skyrocketed over the past 5 years raising prices for everyday items by over 30% (Department of Labor Statistics, 2026). This is based on the CPI (Consumer Price Index) scores from 2020-2026 with an average inflation rate of 4.49% each year. With higher inflation and little to no movement in wages, the average American's disposable income has decreased significantly, leaving less room for charitable spending towards nonprofits and churches.

According to ChurchSalary, "52% of churches suffered a decrease in per person giving (the ratio of budget to attendance)." (ChurchSalary, 2026) This is even with 75% of the same churches surveyed reporting higher numbers in congregation size and operating budget. The problem isn't how churches can get more people into their congregations, it's how to communicate the importance of their church so people will support them with donations.

Nonprofits have been showing similar trends over the past few years as well. 69% of nonprofits reported having at least one source of funding cut from their organization in 2025 alone. (Center for Effective Philanthropy, 2026) From the same nonprofits surveyed, 32% are operating in a budget deficit with expectations of service demand to increase during the next year. Nonprofits are supporting more people now than ever before, but they are severely lacking the financial resources to be able to do it.

While there is no magic button to press and there will suddenly be millions of dollars in donations, there are things that both organizations can do more effectively to alleviate the financial pressures they are experiencing. Only about 1/3rd of nonprofits and churches in total have actual accounting software and dashboards for showcasing clarity of their financial situation. The majority of these organizations rely on separated spreadsheets, documents, isolated systems for donations, tracking, and forecasting. This leads to missed opportunities, longer follow ups for community engagement, and a better chance for committing fraud (nonprofits are the second largest industry committing financial fraud behind the finance industry).

Connecting these systems together and consolidating these views into one coherent dashboard is extremely useful and important for nonprofit organizations and churches alike. It will free up more time for the admin to actually get back their missions and bring in more interest and donations for their team.

Staffing, Volunteers, and Operations Overload

There is just too much to do for such a few people. Now, I'm sure that the people working in the nonprofit sector are extremely capable and smart people, but that doesn't mean they should be overloaded on work just because they can. My mom always called this "The Curse Of Competency". What she meant by that was that the more capable you are at completing work, the more work people tend to give you. This is especially true in nonprofit organizations and churches where employees and volunteers are often expected to take on multiple responsibilities outside of their actual positions. According to the Center for Effective Philanthropy, 45% of nonprofit CEOs identified staffing as one of their organization's biggest challenges in 2026. The same report found that 46% of nonprofit CEOs were significantly concerned about their own burnout, compared with less than 30% in 2025. (Center for Effective Philanthropy, 2026)

Churches have similar issues, especially regarding volunteer leadership. The Unstuck Group reported that 41% of church attendees were actively volunteering in early 2026, an improvement from the previous year. However, these churches still averaged approximately 17 attendees for every volunteer leader. (Unstuck Group, 2026) This means that even with more volunteers getting involved, there is still a significant need to develop leaders and organize the responsibilities being placed on them.

I think one of the biggest mistakes organizations make is assuming that every operational problem requires another employee or volunteer. Sometimes it does, but many administrative responsibilities can be simplified with better systems. Volunteer scheduling, automated reminders, event registration, employee onboarding, and task management can all be organized into structured workflows. Instead of having one employee manually manage every part of these processes, the technology can handle predictable responsibilities while allowing people to focus on the work that actually requires their attention.

Poor Follow-Up and Relationship Management

This is something I believe both nonprofits and churches should be taking much more seriously. An organization can spend enormous amounts of time recruiting volunteers, finding donors, attracting new members, and building community relationships, only to lose those opportunities because there isn't a consistent process for following up.

The Fundraising Effectiveness Project found that while total charitable giving increased by 4.3% in the first quarter of 2026, the number of donors actually declined by 0.8%. (FEP, 2026) This doesn't necessarily mean nonprofits are failing at donor relationships, but it does show that increasing donations and maintaining a growing supporter base are two very different challenges. Churches face a similar issue to this. A 2026 study conducted by Invite Welcome Connect found that follow-up and relationship-building were identified as greater areas of need than initial greeting and welcome ministries among the congregations surveyed. (Invite Welcome Connect, 2026)

Think about somebody visiting a church for the first time or making their first donation to a nonprofit. If their information gets buried in someone's inbox or forgotten in a spreadsheet, that relationship could end before it ever really begins. Having a centralized CRM (Customer Relationship Management) system that automatically organizes contacts, assigns follow-up responsibilities, and reminds employees when action is needed can make an enormous difference. The goal isn't to automate relationships, but to make sure the relationships organizations are working so hard to build don't get forgotten.

Disconnected Systems and Disorganized Information

This brings me to what I believe is one of the most overlooked challenges nonprofit organizations face today. There is a big difference between having software and having an actual system. Most organizations already use different programs for accounting, donations, communications, scheduling, and recordkeeping. The problem begins when those programs don't communicate with one another and employees end up manually transferring information between spreadsheets, checking multiple platforms for the same information, and wasting valuable time trying to figure out which records are actually correct.

A 2026 report from NTEN and The Bridgespan Group found that only 23.9% of surveyed nonprofit executives reported having data sufficiently organized to support AI use, while only 24.3% had adequate AI-related technology infrastructure already in place. (NTEN, 2026) This is especially important as more organizations begin experimenting with Artificial Intelligence. AI is an incredible technology, but it cannot automatically fix an organization that doesn't have clear processes or reliable information. If your databases are disorganized and your employees don't know where to find important information, simply purchasing another AI subscription isn't going to solve those problems.

Instead, organizations should focus on connecting their existing software, cleaning up their databases, and establishing clear workflows for how information moves throughout the organization. This allows employees to spend less time searching for information and more time actually using it.

Measuring Impact and Making Better Decisions

Finally, I think organizations need to become much better at understanding whether the work they are doing is actually producing the results they want. According to BDO's 2026 Nonprofit Standards Benchmarking Report, 59% of surveyed nonprofit leaders identified inadequate technology as a challenge when collecting information about program impact, while 50% reported insufficient staffing to collect that information. Another 49% identified the lack of a consistent measurement and reporting framework. (BDO, 2026)

These are significant problems when organizations rely on donations, grants, volunteers, and community support to continue operating. How can a nonprofit effectively communicate its impact to potential donors if it cannot clearly measure how many people it has served? How can church leadership make informed decisions about volunteer engagement or ministry growth if that information is scattered across multiple systems?

This is where dashboards, automated reporting, and connected databases become extremely valuable. Instead of spending hours collecting information for a board meeting or annual report, organizations can have access to accurate operational information as it is being recorded. AI can also help identify trends and summarize results, although the final interpretation and decision-making should always remain with organizational leadership.

Building Stronger Systems for Stronger Missions

When you look at all five of these problems together, I think something becomes very clear. Financial pressure makes it difficult to hire more employees. Limited staffing creates operational overload, which makes follow-up and communication more difficult. Disconnected systems make those responsibilities even harder, and without reliable information, leadership struggles to identify where improvements are actually needed. These problems are connected, and I believe the solutions should be connected as well.

This is one of the main reasons I started Harbor Systems. I believe churches and nonprofits should have access to organized, effective, and affordable technology that makes accomplishing their missions easier. That doesn't mean every organization needs an AI agent, a custom software platform, or an entirely new technology stack. Sometimes the greatest improvement comes from connecting the software they already have, simplifying a complicated process, or giving leadership a clearer understanding of what is happening throughout their organization.

Technology should never become the mission itself. Churches exist to serve their congregations and communities, while nonprofits exist to advance causes and help people who need them. The administrative systems supporting those missions should make that work easier, not more complicated. These organizations are facing real challenges, and technology alone will not solve all of them. But I strongly believe that better systems, connected information, and clearly defined workflows can help organizations become more efficient, financially responsible, and better equipped to serve their communities.

The goal should not be to replace the people doing the work. It should be to give those people the systems and resources they need to do their work more effectively.