New Research Shows Rising Demand for San Diego Nonprofits Amid Funding Declines

While 93% of San Diegans believe nonprofits services are important to their communities, decreases in funding across all major revenue sources are placing new pressure on the county’s more than 13,000 organizations. 

The Nonprofit Institute at the University of San Diego (USD) released its 2025 State of Nonprofits and Philanthropy Report today, providing a data-driven look at how these economic pressures are impacting the nonprofit sector’s vitality and the philanthropy that sustains it.

Key findings from the 2025 report:

• Nonprofit services benefitted 82% of residents in the last 12 months. The top five subsectors were:

• Health and hospitals (56%)

• Arts and culture (48%)

• Environment, wildlife and animal rescues (47%)

• Religious organizations (33%)

• Higher education (31%)

• 68% of nonprofits surveyed reported an increase in demand for their services in 2025.

• 81% of nonprofit leaders reported reductions in funding from government, corporate sponsors, foundations, and individual donors.

• Only 13% of San Diego nonprofits reported their financial health as “very strong,” compared with 18% in 2024 and 30% in 2023.

• Increased need, reduced funding is causing a strain on the nonprofit workforce with both leadership and staff reporting elevated levels of burnout and ⅓ considering leaving their positions.

“When communities face uncertainty, nonprofits are often where people turn, not only for services, but for connection, creativity, and shared civic life,” said Laura Deitrick, PhD, Executive Director of The Nonprofit Institute. “Our data show that San Diegans continue to trust and rely on nonprofits across the sector even as funding conditions erode, with real implications for those doing the work and for the communities they serve.”

The report was compiled using diverse data sources, including resident surveys, nonprofit leader input, IRS filings and local job market data.