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Guest Commentary
More Minnesota Nonprofits Should Merge
Instead of struggling alone, many nonprofits with similar missions should combine operations to become financially viable.
By Shannon Watson
November 03, 2026
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 accounts are empty and staff are overworked. But that culture is changing, and it’s long overdue.
As we move into the holiday season, I encourage you to look beyond the glitter and tinsel and ask yourself: Could the organization(s) I support use some help? Could they benefit from combining resources with a similar group?