Building Engaged Nonprofit Teams in 2025

As we enter the new year, many nonprofits are feeling the strain. Staffing shortages, tight budgets, and rising donor expectations have stretched teams to their breaking point. These pressures aren’t just inconveniences—they’re threatening the very missions nonprofits strive to achieve.

A recent Gallup Report underscores the gravity of the situation, revealing that employee engagement has dropped to its lowest level in a decade. This report puts numbers to what many of us have been sensing—a pervasive malaise that’s hindering productivity, morale, and mission effectiveness. Even worse, this malaise affects every corner of an organization, contributing to burnout, high turnover, and, for nonprofits, weakened donor relationships.

The solution doesn’t lie in temporary fixes or shifting responsibility onto already overburdened teams. Instead, nonprofit leaders must take bold steps to address engagement head-on. By rethinking workflows, clarifying roles, and investing in professional growth and innovative tools, they can create environments where people excel.

This article takes a look at several critical ways nonprofit leaders can create environments where their people excel—because when employees thrive, so do the communities they serve.

Nonprofits Face Unique Workforce Challenges

While labor shortages are rife in the global workforce, the nonprofit sector faces specific challenges. The 2023 Nonprofit Workforce Survey highlights the pressing situation:

• 51.7% of respondents reported experiencing job vacancies
• 72.2% of leaders stated that salary inhibits their ability to recruit and retain employees
• 50.2% reported workforce shortages due to burnout

Despite this, the 2023 survey indicated that 96% of nonprofit leaders feel tremendous satisfaction in their jobs. In an industry where the majority of employees favor mission-based work, this is hardly surprising. 

Given this, we must ask ourselves how we can leverage the attraction of this type of work to recruit and retain team members who are passionate about our missions.

A Shift from Individual Responsibility to Leadership Accountability

Historically, discussions about employee and team engagement have focused on individual actions, such as encouraging staff to take breaks, manage stress, or enforce boundaries. While well-intentioned, these approaches don’t address the systemic issues that lead to disengagement.

Engagement is not an individual problem, but rather a leadership responsibility. Organizations must create environments where employees feel valued, supported, and equipped to succeed. This involves designing systems that align with team needs, organizational goals, and the demands of modern philanthropy.

Systemic change means building a foundation that supports teams at every level, including:

• Clarifying roles and responsibilities so employees understand their contributions to the mission.
• Setting realistic goals and expectations that align with available resources.
• Providing the tools and technology teams need to work efficiently and effectively.

This transformation starts with leadership accountability. Leaders must assess their organization’s culture and workflows, identifying barriers to engagement and taking action to remove them.

Team Engagement: The Key to Nonprofit Success

Employee engagement is the enthusiasm, commitment, and connection individuals feel toward their work and organization. Engaged employees contribute actively to achieving the mission, while disengaged employees often feel unsupported, unmotivated, and disconnected, leading to underperformance, absenteeism, and turnover.

The benefits of engagement are clear. A report from Gallup shows that engaged employees lead to:

• 81% reduction in absenteeism
• 18-43% decrease in employee turnover
• 18% increase in productivity
• 23% boost in profitability

For nonprofits, the stakes are even higher.  Engaged employees are less likely to leave, reducing recruitment costs and preserving institutional knowledge. They are also better equipped to:

• Strengthen donor relationships
• Increase community impact
• Build long-term sustainable philanthropy to support the mission.

When leadership teams ensure team members feel valued, supported, and equipped, it can bolster engagement, thereby deepening relationships and retaining passionate individuals who seek mission-focused work. In this environment, engagement may be more easily achieved than in other organizations.

Practical Solutions for Driving Systemic Change

We won’t fix the talent crisis in fundraising with quick fixes or last-minute solutions. While well-intentioned, encouraging employees to “breathe” or take five minutes to pause isn’t enough to address the root causes of exhaustion and turnover.

Instead of pushing the issue onto our team members, leaders must take responsibility for the ways in which their organizations provide support for the mental and emotional well-being of their people, while actively seeking to improve team member engagement.

Transforming organizational culture may sound daunting, but it’s achievable with clear steps. Here are five actionable strategies to get started:

1) Foster a Culture of Trust and Psychological Safety: 

Teams thrive when they feel safe to share challenges, ask questions, and propose innovative ideas. Structured feedback mechanisms, such as anonymous surveys or regular team retrospectives, can help create this environment. Leaders can further support this by creating safe spaces for open dialogue.

2) Clarify Roles and Responsibilities: 

Clearly define each team member’s role and its connection to the broader mission. This reduces uncertainty and allows staff to focus their energy on impactful work.

3) Equip Teams with the Right Tools: 

Modern technology can streamline workflows and reduce administrative burdens. Tools like AI-powered platforms can assist with donor segmentation, personalized outreach, and data analysis, freeing up time for strategic work.

4) Set Realistic Goals and Targets: 

Unrealistic expectations can demoralize teams and signal a disconnect between leadership and day-to-day realities. Align goals with organizational capacity, creating a sense of trust and achievement. Clearly identify who owns each goal and set up a system that ensures accountability.

5) Ask Your Team the Right Questions:

Leadership accountability requires an accurate assessment of a team’s overall health and well-being on an ongoing basis.   This can be done by creating a culture of trust and asking the right questions. I strongly recommend asking these six questions to understand how team members are really doing.

6) Invest in Leadership Coaching for Professional Growth: 

Leadership coaching offers significant benefits for individuals and organizations. A MetrixGlobal study found that coaching can lead to:



• 70% increase in individual performance
• 50% improvement in team performance
• 48% increase in organizational performance

Coaching not only demonstrates an organization's commitment to personal development, but also delivers measurable results that benefit the entire organization. By working with a certified leadership coach, nonprofit leaders can access tailored guidance to advance their mission and propel their teams forward.

The Time for Change Is Now

When organizations prioritize their teams’ well-being and professional growth, they’re not just being “nice.” They’re strengthening their ability to cultivate donor relationships and drive their mission. A thriving team leads to committed donors who understand the impact of their donations and want to do more.

Nonprofit leaders have a choice: continue operating within broken systems or take bold steps toward systemic change. By addressing structural issues, prioritizing engagement, and embracing innovation, organizations can build stronger teams, deepen their community impact, and secure a sustainable future.

Begin today by assessing your organization’s culture and workflows. Ask yourself: Where can we remove barriers, clarify roles, or better support our teams? The first step toward systemic change starts with your leadership.