The 2026 Grant Funding Outlook: What Nonprofits Can Expect This Year

As nonprofits move into 2026, many leaders are asking the same question: What does the funding landscape look like this year?

The short answer: grant funding remains available, but competition is strong, expectations are higher, and strategy matters more than ever.

Economic conditions, policy priorities, and philanthropic trends are shaping how and where dollars are distributed. For nonprofits that understand these shifts and prepare accordingly, 2026 still offers meaningful opportunities for grant funding. 

Here’s what nonprofits should know about the grant funding outlook for the year ahead.

1. Economic context & philanthropic giving

After several years of economic volatility, inflation has begun to stabilize and interest rates are showing signs of leveling. While this has created some cautious optimism, funders remain intentional in how they allocate resources.

According to Giving USA, overall charitable giving has remained relatively stable, with foundations continuing to play a critical role in nonprofit funding (even as individual giving fluctuates).

Key trends nonprofits should be aware of:

• Private foundations remain a steady source of funding, often with more flexibility than government grants

• Corporate philanthropy continues to focus on issue alignment and community impact

• Individual giving may be more unpredictable, reinforcing the importance of diversified funding strategies

While funders are cautious, they are not retreating. Many are being more selective, or giving to organizations who they have engaged in the past.

2. Federal, state and local grant outlook

Public funding remains a significant opportunity for nonprofits in 2026, particularly at the federal and state levels.

Government investment continued to prioritize areas such as:

• Workforce development

• Affordable housing

• Mental health and behavioral health services

• Education, youth services, and reentry programs 

Research from the National Council for Nonprofits indicates that while public grant funding is still robust, application processes are highly competitive and often administratively demanding.

What this means for nonprofits:

• Compliance and documentation are crucial

• Partnerships and coalitions can strengthen applications

• Smaller organizations may benefit from focusing on local and state opportunities where competition is narrower

3. Foundation giving projections for 2026

Foundations remain a cornerstone of nonprofit funding, and many are maintaining or modestly increasing their grantmaking in 2026.

Data from Candid shows that while emergency pandemic-era giving has tapered, foundations are shifting toward longer-term, strategic investments.

Notable trends include:

• Increased interest in multi-year grants

• Continued support for capacity building and general operating support

• Greater emphasis on evaluation, learning, and sustainability

However, with these opportunities come higher expectations. Foundations want to fund organizations that demonstrate:

• Clear strategic direction

• Strong leadership governance

• The ability to manage and scale impact responsibly

4. Smaller grants, higher competition

One of the defining realities of the 2026 funding landscape is competition.

More nonprofits are applying for grants, often with similar, if not identical, funding priorities. As a result:

• Average grant sizes may be smaller

• Funders may fund fewer organizations per cycle

• Rejection rates are higher (even for strong proposals)

Nonprofits with diversified funding streams and regional funder relationships are better positioned to weather these pressures. 

5. What strong applicants are doing differently

Despite increased competition, strong applicants stand out by applying smarter and building genuine connections.

Successful organizations are:

• Clearly positioned with a focused mission and strategy

• Grant-ready with updated narratives, budgets, and documentation

• Selective, applying only to funders aligned with their mission and goals

• Consistently engaging current and past funders through social media, newsletters, annual updates, and communications

• Building genuine relationships with program officers and foundation staff beyond the application cycle

Rather than chasing every opportunity, these organizations invest in preparation, visibility, and relationships, saving time while increasing long-term funding success.

Looking ahead

For organizations willing to take a thoughtful, proactive approach to fundraising, 2026 can be a year of meaningful growth and stability. By planning ahead and truly understanding your funders’ priorities, you can take your grant game to the next level.

Here at Scribe, we help nonprofits approach the grant process with confidence through strategic grant planning, proposal development, and more.

Sign up for a free consultation here: https://www.scribellcnc.com/booking-calendar/free-20-minute-consultation-with-scribe