As 2025 draws to a close, those closest to Australia’s not for profit (NFP) sector are noting a strong sense of resilience and determination. Our recent survey of experienced NFP consultants and advisors captures their reflections on the year and the progress many organisations have made.
Yet behind this resolve lies a sector increasingly stretched by accelerating reforms and growing administrative and financial pressures.
Reform fatigue is real and growing
If there is one theme that defines 2025 for NFPs, it is reform fatigue. Consultants described clients contending with overlapping changes across Aged Care, the NDIS, Support at Home, cyber security, and regulatory reporting. These changes, while well-intentioned, are being rolled out faster than organisations can realistically absorb.
For many NFPs, especially smaller community organisations with limited administrative capacity, the cumulative impact is a sense of being constantly on the back foot, juggling compliance obligations while trying to maintain service quality. The willingness to evolve is there, the bandwidth is not.
Financial stress has become the new normal
The experts surveyed noted that, for many organisations, financial positions have either stagnated or deteriorated over the past year. Rising insurance costs, increased cyber security requirements, technology investment pressures, and persistent workforce shortages are outpacing revenue growth.
National reporting backs this trend. ACNC charity data shows demand and operating costs rising faster than revenue for many organisations, while AICD governance studies consistently find that government and philanthropic funding models do not fully cover the resources required for modern service delivery.
Digital capability: High expectations, low capacity
Digital transformation remains a priority across the sector, but the consultants who responded to the survey raised a consistent challenge: awareness is high, capability is low.
Many organisations recognise the need to adopt automation, AI tools and cloud-based systems, yet lack the internal skills, funding, or confidence to proceed. The risk of getting it wrong, particularly around privacy and data security, looms large.
Without targeted investment in digital capability, the gap between digital “leaders” and the rest of the sector will continue to widen.
Partnerships are becoming essential, not optional
A notable positive trend identified by survey participants is the increasing appetite for collaboration. Whether through shared services, co-delivered programs, or cross-sector partnerships, NFPs are exploring ways to pool resources and amplify impact.
But this is not just a strategic shift; it is a practical necessity. Collaboration is becoming one of the few tools organisations can leverage to maintain their services in an environment of rising expectations and limited resources.
Community trust remains a strength
Despite internal pressures, community trust remains steady. Consultants observed that organisations deeply embedded in local communities continue to receive strong public support, even as cost-of-living pressures affect donations.
This aligns with national trust indicators: Australians consistently place high confidence in charities, particularly those with clear missions and transparent reporting.
The sector’s message heading into 2026
The survey results offer one clear takeaway: Australia’s NFP sector is delivering extraordinary value under increasingly difficult circumstances. But goodwill cannot be the foundation on which an entire service system rests.
What the sector needs is stability.
Longer-term funding cycles. Simplified regulation. Clearer implementation pathways for reform. Investment in workforce capacity and digital capability. And a more coordinated government approach that recognises that administrative burden, when poorly sequenced, is not a neutral cost, it’s a barrier to impact.
NFPs will continue to serve their communities with commitment and integrity in 2026, just as they have in 2025. But without structural support, the gap between what they are asked to do and what they can sustainably deliver will only widen.
Australia relies on this sector every day. It is time to show that reliance is matched with respect, and with the resources organisations need to keep showing up.
