What This Year Taught Us About Nonprofit Leadership

As the year ends, many nonprofits are doing what they always do in December: finishing year-end appeals, closing the books, and pushing through one last board meeting before everyone exhales.

But year-end is also a rare pause point, an opportunity to step back and ask what this year actually taught us about how we lead, govern, and steward our organizations.

This year, more than most, highlighted a few truths nonprofits can’t afford to ignore.

Revenue Concentration Is a Risk, Even When It’s “Always Worked”

Many organizations were reminded this year that reliance on a single funding source, whether government grants, membership dues, or one major donor, creates vulnerability.  Funding cuts, delayed payments, or shifting priorities can quickly turn a stable budget into a stress test.

Year-end is a good time to ask:

• Do we truly understand where our financial risk lies?
• Have we documented contingency plans, or are we relying on optimism?
• Does the board understand how dependent the organization is on certain revenue streams?

Diversification isn’t just a finance issue; it’s a governance responsibility.

Strong Boards Don’t Happen by Accident

As organizations grow, boards must grow with them. This year, many executive directors felt the strain of boards that were deeply committed but maybe unclear on their role, hesitant to change, or resistant to training.

A hard truth surfaced again and again:  Passion alone is not a substitute for governance knowledge.

Year-end is the right time to reflect on board effectiveness:

• Does the board understand its fiduciary duties?
• Are board members engaged at the right level or stuck in operations or disengagement?
• Has the organization invested in board education, or avoided it to keep the peace?

Healthy boards are developed intentionally, not assumed into existence.

Internal Controls Matter Most When Resources Are Tight

When funding is uncertain and staff capacity is stretched, internal controls are often the first thing to loosen.  This year showed why that’s risky.

Strong controls are not about distrust, they are about:

• Protecting staff
• Safeguarding assets
• Ensuring accurate financial information for decision-making

As you close the year, it’s worth asking:

• Did we follow our policies consistently?
• Are there areas where “workarounds” became the norm?
• Has growth outpaced our processes?

Year-end is the perfect time to reset expectations before bad habits become permanent ones.

Transparency Builds Trust, Especially in Hard Years

Whether communicating with funders, board members, or staff, organizations that leaned into transparency navigated challenges more effectively.

That means:

• Honest financial reporting
• Clear explanations of risks and uncertainties
• Open conversations about capacity and priorities

Stakeholders don’t expect perfection, but they do expect clarity.

Year-End Isn’t Just About Closing the Books

Yes, December means reconciliations, financial statements, and compliance deadlines.  But it’s also a moment to prepare for what comes next.

Before the new year begins, consider:

• What lessons from this year should influence next year’s budget?
• What conversations have we been avoiding that need to happen?
• Where do we need stronger systems, clearer roles, or outside support?

Nonprofit work has never been simple, but it has never been more important.  The organizations that will thrive next year are not the ones pretending this year was easy.  They are the ones willing to learn from it.

As you close out the year, don’t just ask “Did we survive?”

Ask “What did we learn and how will we lead differently because of it?”