Minnesotans love our nonprofits.

We volunteer for them, donate to them, serve on their boards, and proudly describe our state as the land of 10,000 Nonprofits—organizations working on every imaginable civic challenge.

It’s part of our identity. But many of those nonprofits are struggling, and supporters often don’t realize it until the closure announcement hits their inbox.

As a nonprofit leader, I often find myself quoting my high school economics teacher: “Nonprofit is a tax status, not a business plan.” Nonprofits face the same pressures every business does: rising costs, competition for the best talent, AI and regulatory complexity, and the constant pressure to innovate.

Like for-profit businesses, nonprofit leaders must make the math work. But unlike most businesses, nonprofits are expected to keep overhead artificially low, staff small, and programming expansive. With that combination, the math doesn’t add up.

For organizations that choose to pursue government funding, the picture is even more complicated. State, local, and federal dollars can be a lifeline, but they can also disappear with little warning.

A change in elected champions can and often does shift priorities—suddenly a program that was stable for years has a hole in its budget. That was true before all the fraud cast a shadow over the entire nonprofit ecosystem.

With the current economic uncertainty, individuals, corporations, and the philanthropy sector are all rethinking charitable giving, and that has a trickle-down effect.

(I should pause here and give credit where it’s due to for-profit businesses. Without the taxes they pay, the people they employ in high-paying jobs, and their charitable giving and sponsorships, most of the nonprofit sector literally could not exist.)

Nonprofit leaders obscure developing problems

I’d estimate that 98% of nonprofits are struggling. A few, either because of celebrity attention or making good use of a crisis that resulted in a huge influx of donations, are OK for now. But a giant pile of money often comes with its own issues.

When nonprofits shut down, supporters are often shocked. “We had no idea things were this bad,” they often say. And they’re right—most of the time they are unaware of how precarious the financial situations are until the closures occur.

The nonprofit sector’s culture usually encourages leaders to project confidence and resilience, even when bank account balances are low.

Part of the problem is the language we’ve gotten used to using in both political and nonprofit fundraising. Everything is urgent. Every deadline is critical. Every campaign is the most important one yet.

We’ve cried wolf for so long that when something is truly a crisis, people don’t read it that way. They assume it’s just this quarter’s urgency—just the same as last quarter.

Does Minnesota have too many nonprofits?

One part of the problem might be that there are just too many nonprofits.

It’s easy to start a nonprofit, but that ease can result in duplication. Multiple organizations doing nearly identical work compete for the same grants, donors, and staff. The market, even one as civically abundant as Minnesota’s, can’t bear infinite versions of the same mission, no matter how worthy each one is.

I would argue that it’s time for more conversations about mergers, consolidations, and strategic alliances. Those reorganizations should be seen as responsible stewardship, not failure.

If you care more about the work than the logo on the letterhead, these conversations are healthy and incredibly difficult at the same time. Think of the situation through a Venn diagram: Organizations with similar missions can often cover more ground when the overlapping is kept to a minimum. Finding efficiencies in the overlapping parts is where the magic happens.

So here’s the call to action: Don’t wait for the shutdown announcement.

If you value an organization, support it now. Reach out. Ask how they’re doing. Increase your gift if you can. Encourage collaboration rather than competition. And when you see two or more organizations exploring a merger or shared services, celebrate it. That’s what sustainability looks like in the long term, but those alignments are bumpy in the short term. A financial cushion helps.

Minnesota’s civic ecosystem is one of our greatest strengths. But it won’t stay strong by accident. It will stay strong because supporters, donors, and leaders choose to invest in alignment, resilience, and straightforward communication—before closing the doors is the only option left.