The nonprofit sector has a complicated relationship with endings. Organizational survival is often treated as an unquestioned good: funders reward persistence, boards equate closure with failure, and leaders internalize institutional decline as personal defeat. Yet that narrative is not only unhelpful: it is untrue.
Research on nonprofit closure from Emily Searing, from Beth Gazley and Chau Guo, as well as from Jeongyoon Lee and Andrew Sullivan suggests the sector’s assumptions are more cultural than empirical. Organizations close for many reasons beyond crisis or mismanagement: missions evolve, environmental conditions shift, leadership transitions occur, or another institution becomes better positioned to carry the work forward.
At the Dorothy A. Johnson Center for Philanthropy, our research from across the 2020s highlights how many organizations were already rethinking fundamental assumptions about infrastructure, governance, and sustainability in response to financial uncertainty and workforce strain even before we entered this latest period of “existential crisis.” Rather than viewing these adaptations as temporary stopgaps, many nonprofits have long treated them as sustainable strategies for mission resilience.
Fiscal sponsorship, for example, can allow emerging initiatives to operate without building entirely new administrative systems. Shared leadership models can reduce executive burnout and distribute institutional knowledge more equitably. New models that blend aspects of business, government, and philanthropy are enabling organizations to respond more flexibly to changing community needs. Even the growing movement for collective giving offers alternatives to the independent-entity model, as Grapevine’s Emily Rasmussen shared with us.
What’s driving this innovation is a subtle but critical shift in approach. Leaders are putting aside the question, “How do we keep the organization alive?” and focusing instead on, “How do we ensure the mission continues to thrive?”
Clear Pathways Forward
The reality is that a huge portion of our sector is facing crisis — and the communities they serve are facing that crisis, too. As the Center for Effective Philanthropy (CEP) reported in a survey of 600 nonprofit and foundation leaders, 46% were concerned about the risk of their organization closing or merging. Keeping the mission alive may require organizations to seek new and greater forms of collaboration, to restructure, or to move toward a strategic exit that takes the full ecosystem of providers, services, and communities into consideration.
That led us to ask more deliberately, “What options exist for nonprofits facing existential pressures, and what do leaders need to move forward effectively?”
What emerged from that work was not a single roadmap, but a framework for expanding organizational imagination. Rather than treating mergers or closure as the only endpoints for organizations in distress, we found a broad continuum of strategic responses that can preserve — and sometimes strengthen — mission impact under changing conditions.
To help leaders navigate those possibilities, we organized the pathways into three broad categories.
The first category focuses on making strategic changes to organizational infrastructure, options that allow organizations to continue pursuing their missions while leveraging shared physical, administrative, and programmatic structures. Two or more organizations may share space, staff, technology, or responsibility for designing and carrying out specific programs. These approaches can reduce overhead burdens and create greater flexibility without requiring organizations to set aside their identities or people.
The second category examines options that involve deeper, often more formal collaboration between organizations. These pathways include fiscal sponsorships, joint ventures, and parent-subsidiary structures. While these approaches often require significant cultural and governance adjustments, our research suggests they can also reduce competition, consolidate expertise, and improve long-term sustainability when pursued intentionally.
The final category recognizes the reality that exiting may ultimately be the right decision. This category addresses how organizations can responsibly wind down operations while preserving mission continuity wherever possible and necessary. This category includes mergers, acquisitions, and/or transferring programs or assets to peers. Importantly, strategic closure recognizes that an organizational ending does not necessarily mean a mission has failed. Alternatively, it can also mean that a mission has reached completion.
These categories are not intended to prescribe a single “right” path. Rather, they are designed to support conversation, ideation, and decision-making among nonprofit leaders, boards, communities, and funders navigating uncertainty.
Ideally organizations should engage with these questions throughout their life cycles, not only during moments of financial or other crisis. But the realities facing today’s nonprofit sector make these conversations urgent now.
The Role of Funders: A Research Gap in the Field
Also urgent is the need for nonprofits, their boards, funders, and donors to develop a new understanding of how increased collaboration, structural innovations, and responsible exits can be resourced and supported with creativity and optimism, rather than stigma.
Funders and the perceptions of funders play a large, if often unintentional role in perpetuating the narrative that closure (or a fundamental restructure) equates to failure. Quoted in The Chronicle of Philanthropy in 2025, Tonia Wellons, CEO of the Greater Washington Community Foundation, said many nonprofits hesitate to raise the topic because of uncertainty about how funders might react:
If mergers are to become more common, funders will need to shift their behavior and let go of the belief that if a grantee becomes unsustainable, that somehow leaves the ‘stain of failure’ on its philanthropic backers … note that wind-down isn’t a dirty word.
Furthermore, collaboration — especially formal collaboration such as fiscal sponsorships and joint ventures — is complicated.There are real legal and financial challenges associated with the limited resources of nonprofits, and it can be difficult to align and integrate two or more different organizational cultures without meaningful support. As the Chronicle succinctly put it when offering advice on navigating mergers, specifically: “This will cost money.”
Funders have a critical role to play in providing that money — but also in convening different groups or entire ecosystems of nonprofits that could do more by working together and prioritizing mission over organizational survival. The foundations leading the movement for limited-life philanthropy — an intentional and responsible closure strategy that is gaining ground — could do more to support a parallel shift in the nonprofit field.
Across our sector, funders and nonprofits could work together to build a new field — to define new ways of working, to chart new paths for moving resources, and to design an ecosystem for civic and philanthropic renewal that leads us into the next generation of community well-being.
The future of the sector may depend less on whether individual organizations survive indefinitely in their current forms, and more on whether our missions are able to adapt, endure, and evolve.
Brenda Falk is a research manager at the Dorothy A. Johnson Center for Philanthropy. Tory Martin is director of communications and strategic partnerships at the Dorothy A. Johnson Center for Philanthropy.
Trish Abalo, Emily Doebler, and Anneliese Orr were central contributors to the research for this project.
