Tariffs Are Coming. Here’s Why Nonprofits Need to Pay Attention Now.

New tariffs between the U.S. and Canada aren’t just a business issue. For nonprofits, the ripple effects are already starting—and they go beyond higher costs. We’re looking at lower donations, rising community needs, and economic uncertainty that hits the most vulnerable first.

A recent PwC report makes this clear: nonprofits will be caught in the crosshairs of this trade disruption, and the effects could be worse than what we saw during COVID-19.

The Pressure is Building from All Sides

Three things are happening at once:

Donations are expected to drop by $100 million in 2026, based on GDP impacts from tariffs.
Costs for essential goods are rising—especially food, medical supplies, and equipment.
Community needs are growing fast. Food bank visits have jumped 90% since 2019, and demand is still rising.

All of this is happening while philanthropic giving trends downward, and small organizations—especially those in rural or economically vulnerable regions—are already stretched thin.

❝During COVID, nonprofits got emergency support. With tariffs, that safety net isn’t guaranteed.❞

Why This Hits So Hard

This isn’t just about import prices. Here’s why this is a serious moment for the nonprofit sector:

Nonprofits create economic value. Every $1 spent by a nonprofit generates $1.20 in GDP. For food banks and mentorship programs, the return can be as high as 9x or even 18x.
Canada’s agri-food and manufacturing sectors are deeply exposed. That affects food security, job losses, and demand for housing and health services.
Donations are concentrated. 70% of donations come from just 9% of donors. If a few major donors scale back, local organizations will feel it immediately.
Small and medium-sized businesses (SMEs), which make up 64% of Canada’s private workforce, are especially vulnerable. When they struggle, so do the communities they support—and the nonprofits that serve them.

Regional Risk: Who’s at Greater Risk?

Hamilton-Niagara Peninsula: Major steel and aluminum exports are directly in the line of fire. Local giving will likely decline while demand for food banks and housing support grows.
Agricultural communities: Tariffs on U.S. inputs (phosphate, machinery, etc.) and on Canadian exports (like beef and canola) will squeeze margins. NFPs serving farmers and rural communities will be hit hard.
Utilities and energy producers: Power exports to the U.S. will decline, impacting local economies in regions dependent on hydro or energy sector jobs.

❝These aren’t abstract economic changes—they’re going to shape how people access food, housing, jobs, and healthcare.❞

What Should Nonprofits Do?

PwC lays out some key recommendations—and here’s how we’d translate them into actions you can take now:

Diversify Your Revenue

Build out social enterprises or fee-for-service models.
Look at new earned income strategies to reduce dependency on grants or major donors.
If you haven’t already, run a financial health check to see how exposed your organization is to economic shifts.

Invest in the Right Tech

Automate what you can. This isn’t just about efficiency—it’s about capacity.
Prioritize tech that improves donor engagement, financial tracking, or service delivery.
Look for low-cost tools with high ROI. You don’t need to do it all at once.

Double Down on Workforce Development

Partner with training organizations to support upskilling—for your team and your clients.
Be ready to serve workers displaced by tariff-related job losses.
Tap into talent pools from shrinking sectors—many will bring valuable transferable skills.

A Call to Funders and Policymakers

This is also a moment for governments and donors to rethink how they support the nonprofit sector:

Policymakers: Create targeted relief for high-impact sectors and regions. That includes direct support to NFPs providing food, housing, and employment services.
Funders: Offer unrestricted funding so organizations can respond where the need is greatest. Support collaborations across sectors to scale impact.
Investors: Use social finance tools (like loans, guarantees, or blended finance) to help organizations weather the storm—and build something stronger.

The Bottom Line

Nonprofits aren’t passive players in this story. We’re part of the economic engine—and when times get tough, our work becomes even more essential.

Tariffs are a disruption, yes. But they’re also a wake-up call. If we act now, we can build more resilient organizations that are better equipped to lead through change.

Don’t wait for the funding crisis to come to your door. Start planning today.