One in three nonprofits lost or froze funding in 2025. Hiring plans collapsed sector-wide. And yet—the organizations that will come out of this stronger are the ones hiring strategically right now. Here’s what boards and executive teams need to understand.

Nobody predicted 2025 would hit this hard, this fast.

Federal grants were paused, clawed back, or canceled outright. State and local funding followed—because when federal dollars shrink, the ripple moves downstream. Programs were suspended. Staff were laid off. And organizations that had spent years stabilizing after COVID found themselves destabilized again, almost overnight.

The numbers tell the story:

· 1 in 3 nonprofits reported some form of government funding disruption in the first half of 2025. (Urban Institute)

· Nonprofit job cuts more than quadrupled—from 5,640 in 2024 to 28,696 in 2025. (Challenger, Gray & Christmas)

· Hiring plans collapsed: the share of nonprofits planning to add staff fell from 52% to just 38% in six months.

· 15% of nonprofits reduced staff in the first four to six months of 2025—nearly double the rate from the year before.

This wasn’t a slow fade. It was a funding whiplash.

In a crisis, the instinct is to freeze.

Freeze hiring. Freeze decisions. Wait for certainty before moving forward.

We understand that instinct. But it’s exactly the wrong move—especially when it comes to leadership.

The organizations that will come out of this stronger are the ones that hire strategically right now—not the ones that wait.

Here’s why.

1. Leadership Vacancies in a Downturn Cost More Than They Do in Good Times

When funding is tight and demand for services is high, every day without the right leader in place has an outsized cost.

Your fundraising slows without a strong CDO or CEO driving donor relationships. Staff morale erodes when they’re operating without clear direction. Boards get nervous. Funders get nervous. And the longer the seat stays empty, the harder the recovery.

A leadership vacancy in a stable environment is disruptive. A leadership vacancy in a funding crisis is dangerous.

2. The Talent Landscape Has Changed—and That Creates Opportunity

Here’s something the headlines aren’t telling you:

The same disruption that rattled the sector has also shaken loose a significant pool of experienced nonprofit leaders.

Sitting CEOs who felt locked in are now open to new opportunities. Long-tenured leaders are retiring early rather than navigate the uncertainty. And a wave of seasoned professionals from government and the private sector are moving into the nonprofit space with fresh energy and transferable skills.

The candidate pool is deeper right now than it has been in years.

But—and this is critical—record applicant volume doesn’t mean finding the right leader is easier. It means the vetting process matters more than ever.

3. The Profile of the Leader You Need Has Changed

The leader who thrived in 2022 may not be the leader you need in 2026.

The funding environment is forcing a fundamental reset of what effective nonprofit leadership looks like. Boards and executive teams need to be honest about this.

Right now, the leaders moving organizations forward share a few key traits:

· Revenue diversification fluency. They know how to reduce dependence on any single funding stream. This isn’t aspirational anymore. It’s a core competency.

· Fundraising gravity. Search firms across the sector are reporting a surge in CDO and development-focused searches as organizations pivot hard to individual donors and major gifts. The ability to grow philanthropic revenue is now a premium skill.

· Calm under structural uncertainty. Leaders who need clear conditions to perform will struggle. The organizations winning right now have leaders who make good decisions without all the answers—and who can project confidence to staff, boards, and donors even when the ground is shifting.

· Coalition-building and advocacy. More nonprofits are realizing isolation is a vulnerability. Leaders who can forge partnerships and engage in policy advocacy are increasingly valuable.

4. Boards Can’t Afford a Slow, Reactive Search

One of the most common mistakes we see: boards waiting until the pressure is unbearable before launching a search.

A well-run executive search takes time. Launching one in crisis mode—when you’re already stretched thin and under scrutiny—almost always leads to a compromised outcome.

The organizations that come through funding disruptions with strong, stable leadership are the ones that moved proactively. They assessed their leadership gaps before those gaps became emergencies.

Reactive hiring in a crisis leads to exactly the revolving-door leadership that makes recovery harder. Proactive hiring—even when it feels uncomfortable—is how you stabilize.

Whether you’re currently in a search, anticipating a transition, or simply trying to assess your organization’s leadership health, here are the questions worth asking:

·        Do our current leaders have the skills to navigate a revenue diversification strategy—or do we have a gap?

·        If we lost our top leader tomorrow, do we have a succession plan—or would we be starting from scratch in a crisis?

·        Are we asking the right questions in our hiring process to identify leaders built for this environment, not the one from three years ago?

·        Are we moving quickly enough—or are we waiting for certainty that isn’t coming?

The organizations that ask these questions now will be in a fundamentally stronger position six months from now.

The funding squeeze of 2025 didn’t just stress-test nonprofit budgets. It stress-tested nonprofit leadership.

Some organizations discovered they had exactly the right leaders in place—steady, resourceful, and built for uncertainty. Others discovered they didn’t.

Now is the time to make sure you’re in the first group.

The Batten Group Can Help

We specialize in placing transformational leaders in nonprofit, healthcare, and higher education organizations—in stable times and turbulent ones. We understand the current landscape, the talent pool, and the leadership qualities that will matter most in the years ahead.

If you’re navigating a leadership transition—or want to get ahead of one—let’s talk.

➡ Contact The Batten Group today. Because in uncertain times, the right leadership isn’t a luxury. It’s your greatest asset.

The Batten Group’s commitment to finding mission-driven leaders is not just a recruitment strategy—it’s a dedication to the long-term success of nonprofit organizations and their missions. The true art of executive search lies in identifying authentic passion, aligning it with the right expertise, and matching it to the unique purpose of each organization. By doing so, The Batten Group helps nonprofits thrive and drive meaningful, lasting change.

In the nonprofit world, values-driven leadership isn’t a luxury—it’s essential. And The Batten Group is at the forefront of making that essential leadership a reality.

We are a premier national executive search and consultancy firm with more than 75 years of collective experience in nonprofit, philanthropy, and executive recruitment. We specialize in placing transformational leaders in nonprofit, healthcare, higher education, and mission-based organizations across the country.

As experts in recruiting and talent acquisition, our mission is to connect exceptional individuals with purpose-driven organizations—helping our partners achieve their boldest strategic goals.

We believe the most impactful teams are built by welcoming varied perspectives, lived experiences, and leadership styles. That belief is at the core of every search we conduct. By fostering environments where people feel seen, supported, and empowered, we help build stronger, more resilient leadership for the future.

We’d love to learn more about your organization’s goals and how we can support your search for the next transformational leader. Visit thebattengroup.com to learn more, or click here to explore our proven hiring methodology.

Follow us on LinkedIn and X to stay updated on our latest searches. And don’t forget to sign up for our monthly newsletter for expert tips, leadership insights, and new career opportunities across the nonprofit sector. [Click here to subscribe].