Nonprofits increasingly in demand throughout county, report says

Demand for the services that nonprofits provide is increasing throughout San Diego County, even as the financial health of these organizations is rapidly deteriorating, a report found.

The report, which was released Wednesday by the University of San Diego, used data compiled by the Nonprofit Institute at USD in the 2025 State of Nonprofits and Philanthropy Report. It concluded that 93% of surveyed San Diegans believe nonprofits are important to their communities, and 82% of county residents have benefited from them in some way in the past 12 months.

A total of 68% of the county’s more than 13,000 nonprofits saw an increase in demand for services, but 81% reported reductions in funding from government, corporate sponsors, foundations and individual donors, according to a statement from the Nonprofit Institute.

“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, 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.”

Only around a quarter of the county’s nonprofits have paid employees, the remainder relying on volunteer work. Additionally, about 30% of the nonprofit sector’s funding comes from government sources — 25% of total funding from grants.

According to the report, the San Diego-area’s philanthropic organizations have considerably lower value of assets than other parts of the state, $2,763 per capita. Los Angeles philanthropic foundations have $7,278 per capita while the San Francisco area’s average per capita assets are a whopping $19,093 — 6.9 times San Diego’s.

The lack of funding is apparent in the data, with 13% of San Diego nonprofits reporting their financial health as “very strong,” compared with 18% in 2024 and 30% in 2023. In 2025, the percentage of organizations reporting financial health as “very weak” or “somewhat weak” was 31%, compared to 27% in 2024 and 13% in 2023.

“The data presented in the report underscore both the scale and complexity of the sector’s role,” Deitrick said. “Leaders describe navigating increased demand alongside shifting policy conditions and access constraints that shape staffing, planning, and service delivery decisions.

“These pressures are occurring at the same time nonprofits are being asked, by communities and by systems, to absorb more responsibility with fewer degrees of flexibility.”

Among the report’s conclusions is that advocating for the need of the nonprofit works in bolstering funding and public interest. Flexibility is key as well, with 83% of surveyed organizations shifting how they allocated money with fewer sources of revenue coming in.

“Taken together, these patterns raise important questions about how well nonprofit civic infrastructure is positioned to absorb continued change,” Deitrick said. “Reduced public sector investment does not eliminate need; it shifts costs into other systems and weakens the frame that holds communities together.

“Strengthening nonprofit capacity is not a matter of generosity. It is a matter of responsible stewardship of the systems San Diegans depend on.”