That’s one of the biggest findings from our latest report, Turning resilience into reality, which surveyed the leaders of more than 200 Kiwi Not for Profits (NFPs). The report showcases the concerns, issues and priorities for the NFP sector, including their workforce, Boards, reporting requirements, technology and risk planning.
Demand versus funding
NFPs told us that they are facing a widening gap between demand and funding, due to a combination of tough economic conditions for Kiwi households and strong competition for available grants. Unemployment is high, living costs keep rising, and the 2026 Child Poverty Report found that there are 50,000 more children in hardship than when we last surveyed NFPs in 2022. Back then, pandemic relief meant there were many more grants available, under a fast-moving and high-trust model. Now, that landscape has changed, with respondents telling us the current government appears increasingly interested in driving private philanthropy and other non-government funding sources.
The often-touted idea that the ‘Great Wealth Transfer’ will be the silver bullet that helps fund NFPs is often discussed throughout the industry, thanks to bequests from the estates of Kiwi Baby Boomers. That hope is not unreasonable, but are the sums overestimated? Older New Zealanders are living longer than ever after retirement, which means more spending on care and medical support. It’s no longer rare to live beyond 90, and by then, the average person may not have much left to give.
Will the Great Wealth Transfer and private philanthropy be enough to support our NFPs in the years ahead? It’s more likely the situation will remain the same for NFPs: working harder than ever and doing their best, but short on funds and no relief on the horizon.
Has service performance reporting delivered its intended purpose?
Half of our respondents said that service performance reporting wasn’t helping them evaluate their performance; only 3% said it was making a significant difference. Part of the challenge is it’s hard to measure complex social, environmental or community outcomes – they’re often not readily quantifiable. The audit process can also be complex especially when the reported information needs to be backed by reliable evidence.
Since undertaking the research, we have heard from NFPs who have worked with third-party organisations that use various formulae to calculate the value of an NFP’s impact. Having a dollar value for the work being done can be a fantastic tool to show the impact of your organisation. However, it’s worth being cautious about the quality of the output and to make sure you can stand behind the data if it’s interrogated.
Fraud and cybersecurity aren’t high enough on the priority list
The report highlighted two concerning areas of risk: fraud and cybercrime. Only 35% of NFPs are planning specifically for fraud risk, despite their vulnerabilities: limited resources, high trust, lean teams.
When it comes to cybersecurity, we’d like to see as many NFPs as possible having cybersecurity policies/practices, and an incident response plan. A surprisingly high 52% of organisations don’t have both, yet 69% tell us they are either “very confident” or “somewhat confident” they can prevent a cybersecurity incident. That overconfidence is worrying considering the high and growing rate of cybercrime in Aotearoa.
Governance capability is becoming harder to sustain
The ideal NFP Board is diverse, committed and paid – but the reality is quite different. Most Board members (72%) are unpaid and most fit their responsibilities around their day jobs. There’s a limited pool of willing and capable individuals, which can make it hard to recruit new Board members and plan for smooth succession.
Could amalgamations provide some relief? We often talk with sector leaders about whether there are opportunities for small NFPs to join forces. New Zealand has an unusually high number of NFPs for its population, over 100,000, and many have similar purposes. This leaves them competing for the same pool of donations, volunteers and Board members. Small NFPs also face compliance and administration costs that eat away at their resources. Could collaborations or mergers create larger, more cost-effective entities?
Many charitable trusts or foundations are set up to honour a loved one, but there is a good alternative to these: the donor-advised fund (DAF). These still let you have a say in where your funding goes and what it’s used for, without incurring all the costs of operating your own foundation.
Technology is an important resilience tool
This year we added AI questions to the technology section of the survey, and the results were encouraging. More than a third (36%) of NFPs have already invested in AI and 16% plan to invest in it over the next three years. We were impressed at this high rate of adoption, and we’ve since spoke to NFPs that tell us AI is already eliminating repetitive manual tasks. AI is especially useful in small organisations, which can come up with an idea, try it out, and see if it works – if it works, great. If it doesn’t, they fail fast and move on to the next idea.
There are also emerging funding opportunities to help NFPs build their AI capability, including grants, technical support and cloud credits from technology providers. These can be useful for organisations wanting to test new tools, but they should be assessed alongside the organisation’s broader strategy, capability needs and risk appetite.
AI adoption and experimentation should be approached with caution and supported by robust governance and cybersecurity practices. Before trialling new tools, NFPs should be clear about what data can be used, who is accountable for oversight and how privacy and confidentiality will be protected. They should also consider how risks such as inaccurate outputs, bias, data leakage or cyber vulnerabilities will be managed. Guardrails like these don’t need to slow innovation; they help organisations try AI safely, responsibly and with confidence.
Facing challenges with innovation and collaboration
There are challenges ahead for the sector – from inflation to funding to compliance with the Online Casino Gambling Act. What will set the most resilient NFPs apart from those who struggle? It’s likely to be innovation, collaboration, and effective management. The NFPs that succeed won’t necessarily be the ones with the most resources, but the ones that are most intentional about how they use them.
