Navigating Uncertainty: How Nonprofits Can Adapt to the Impact of Tariffs
Photo by Guillaume Jaillet on Unsplash
Like all leaders across all sectors and industries, I've been following (or at least trying to) the daily talks and developments around tariffs. I've been thinking about the tension that tariffs are creating, specifically in the community and nonprofit sector – a sector that was already navigating economic calamities and market fluctuations. My thoughts aren't perfect, but I'd be remiss if I didn't attempt to articulate them. Here's where my head is currently at.
Even though Canadian charities, nonprofits, social enterprises and community organizations adhere to provincial laws and federal regulations, we still function in an interconnected world, meaning economic policies such as tariffs can ripple through nonprofit networks in unexpected ways — and it can have a disruptive impact on charitable giving and philanthropic investments. The recent escalation in trade tensions between the United States and Canada, marked by mutual tariffs, in my opinion, has significant implications for the nonprofit sector.
Here are some things that are concerning to me as a capacity builder. The U.S. administration's decision to impose a 25% tariff on Canadian imports like steel and aluminum has made these materials more expensive, putting financial strain on Canadian companies. From my perspective, this has a ripple effect on charitable giving. Businesses affected by these tariffs might have less money to invest in community initiatives, leading to fewer corporate donations and sponsorships. At the same time, households facing tighter budgets may rethink their discretionary spending, resulting in fewer personal contributions to charities.
Furthermore, Canadian businesses that rely on exporting goods to the U.S. feel the pinch. Higher costs are forcing companies to focus on their core operations, making it harder to maintain previous levels of corporate philanthropy. Nonprofits that count on corporate sponsorships could face funding shortfalls as a result. Charities themselves aren't immune to these challenges. Organizations that rely on goods impacted by tariffs — whether for running programs, hosting events, or covering operational needs — may see their expenses rise. For example, charities involved in construction projects or those needing materials like steel and aluminum could struggle with inflated costs, making it harder to deliver services.
Economic uncertainty also reshapes donor priorities. As people and businesses feel the financial impact, they may cut back on charitable giving while relying more on nonprofit services to help them through tough times. This creates a problematic situation where charities are asked to do more with less, trying to meet increased community needs while facing shrinking resources. From my lens, this complex dynamic underscores the need for nonprofits to stay adaptable and resilient in the face of ongoing economic pressures.
Our sector has always been in a state of constraint, limited resources, and flux, but none more so since the start of the pandemic, then the pandemic recovery, and now, the political and economic collision between two powerhouse nations. With so many things that need our attention, a trade war is creating tremors in a part of society that is already fragile and fractured. That said, there is an excellent opportunity in moments of the adversary (we community builders have to be positive!). We adapt, we persevere … we keep showing up and doing the work because we're in the business of serving our community and helping people.
I've been asking colleagues, connectors and causes what conversations they've been having about the potential impact of tariffs on their organizations. I've also had to realign some of the projects underway with clients. Here’s what has been shared with me as well as a few things I’m doing with the organizations I serve and advise.
To adapt to the economic impact of tariffs, some nonprofits are reviewing their financial health and operations. Organizations should start by thoroughly examining their budgets and identifying areas where costs can be trimmed without compromising mission delivery. This may involve delaying non-essential projects, renegotiating vendor contracts, or shifting funds toward critical programs. Adjusting fundraising and program goals may also be necessary to align expectations with the current financial landscape.
I’m also working with one client where we’re revisiting their procurement policies to explore opportunities for buying locally, which can reduce costs tied to tariffs while supporting community businesses. Nonprofits can also explore bulk purchasing or forming buying groups with other organizations to secure better pricing on shared resources. Strengthening local partnerships can lead to resource-sharing initiatives, such as co-hosting events, sharing office space, or collaborating on volunteer training, which can ease financial pressures and create greater community impact.
I’m also emphasizing the importance of robust analysis with folks, an area of monitoring and evaluation that, even on a good day, can fall by the wayside for some organizations.. More frequent budget analysis and financial reporting are essential in uncertain economic times. Regular check-ins on financial performance allow leadership to spot trends early and make data-driven decisions. Monitoring donor data closely is equally important. By analyzing giving patterns, nonprofits can identify shifts in donor behaviour, such as smaller contributions or lapses in recurring giving, and respond accordingly.
Finally, I’m coaching one client on the importance of being quick and nimble, ready to communicate in real-time, openly and transparently. Nonprofits should be ready to adapt their messaging in donor appeals and cases for support. Communicating the real impact of rising costs — for example, how increased material prices affect service delivery or project timelines — helps donors understand the immediate need for support. Personal stories and data can highlight the urgency while reinforcing the organization's resilience and continued impact. These concrete steps empower nonprofits to stay agile, build stronger relationships with their supporters, and quickly weather economic challenges.
As a capacity builder, I’ve always believed that understanding the broader economic landscape empowers nonprofits to adapt and thrive. And oh, when has that been more evident than it is today! While tariffs may seem distant from the day-to-day work of community organizations, their effects are real — and being prepared makes all the difference. And you know what I've learned in my 20+ years working both frontline, starting organizations and advising clients in this sector? If a part of the economy knows resiliency and thriving during challenges of uncertainty, it's our sector.
