State of Good for September 21, 2026
Weekly insights on donor behavior, industry trends, and what’s shaping generosity
⏱️ 9 minutes | Once a week
This Week's State of Good
Good morning. This week’s report covers a significant shift in the federal funding landscape, new data on the gap between AI adoption and AI readiness in our sector, and fresh research on DAF donor behavior. We close with new messaging research and a growth story in planned giving that small shops especially need to see. Let’s get into it.
The Federal Funding Landscape Is Being Redrawn
The biggest strategic consideration on the board this week: a new analysis shows the Trump administration has cut or frozen $177 billion in federal grants, with impacts reaching all 50 states and D.C. The affected areas span health, nutrition, the environment, and disaster relief, sectors where nonprofits deliver a substantial share of frontline services (Chronicle of Philanthropy).
I’ve watched funding environments shift before, but the scale and geographic breadth here means this isn’t a story for “government-funded organizations” it’s a story for everyone. When federal dollars contract, organizations that previously relied on grants enter the private fundraising market with new intensity. That changes the competitive dynamics for individual gifts, foundation grants, and corporate partnerships across the board, even for organizations that have never touched a federal dollar.
What This Means for You:
- If you receive federal funding: Map your exposure now. Know which grants are at risk, what your runway looks like without them, and what your board’s contingency triggers are.
- If you don’t: Expect more competition for private philanthropy in the next 12-24 months. Your donor retention strategy just became more valuable it’s far easier to keep the donors you have than to win new ones in a crowded field.
- For everyone: This is the moment to educate your board on revenue diversification. Organizations with three or more balanced revenue streams weather funding shifts far better than those dependent on one.
AI Adoption Has Outrun AI Governance
Two reports landed this week telling essentially the same story from different angles, and together they paint a clear picture of where the sector stands on artificial intelligence.
First, a new NTEN and Bridgespan report finds that 98 percent of nonprofits are using AI but most lack budgets, roadmaps, or training to use it responsibly (Nonprofit Quarterly). Let that number sit for a moment. AI usage in our sector is functionally universal. The governance to support it is not.
Second, data from a 2026 report shows the adoption pattern itself is uneven: it’s top-down, with managers embracing AI readily while lower-level staff approach it with hesitation (The NonProfit Times). That gap matters. When leadership enthusiasm outpaces staff training, you get inconsistent use, quiet workarounds, and missed opportunities the people closest to your donors and programs are the least equipped to use the tools.
Here’s the practical reality I see across the campaigns and organizations I work with: AI is already writing appeal drafts, segmenting donor lists, and summarizing meeting notes in your organization, whether or not you’ve sanctioned it. The question isn’t whether to adopt AI. It’s whether your adoption is guided or improvised.
What This Means for You:
- Write a simple AI use policy this quarter. One page. What tools are approved, what data can and can’t go into them (donor PII is the big one), and who to ask when unsure.
- Budget for training, not just tools. The sector agrees on the fix the reports show the gap is in action, not awareness. Even a half-day staff session closes much of the manager-staff readiness divide.
- Start with fundraising workflows. Appeal drafting, donor research, and gift acknowledgment are low-risk, high-return starting points where clear guidelines pay off fastest.
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DAF Donors Don’t Behave the Way Nonprofits Think They Do
FreeWill’s 2026 DAF Report offers fresh insight into how donor-advised fund donors actually behave and highlights a notable gap between what nonprofits say their DAF priorities are and what they actually do about them (FreeWill).
This mirrors what I see constantly in the field: nearly every development director I talk to says DAFs are a priority, but far fewer have made the basic operational moves, a DAF widget on the donation page, DAF language in appeals, or a process for identifying which existing donors give through DAFs. The priority-action gap is where opportunity lives, because your competitors have the same gap.
DAF donors are, by definition, donors who have already set money aside for charitable giving. The dollars are committed; the destination isn’t. Organizations that make DAF giving easy and visible tend to capture a disproportionate share.
What This Means for You:
- Audit your donor-facing materials for DAF friction. Can a DAF donor find your legal name, EIN, and mailing address in under 30 seconds on your website? If not, fix that this week.
- Add one DAF-specific line to your year-end appeal: “Have a donor-advised fund? Here’s how to recommend a grant to us.”
- Flag known DAF donors in your CRM and treat DAF check stubs as a research signal these are donors with committed charitable capital.
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Why Donors Give?
Does telling donors a classroom is under-resourced make them more likely to give or less?
New research published in Information Systems Research examined exactly this question, studying when need-based appeals increase giving in educational crowdfunding campaigns (Phys.org). The core finding for fundraisers: these appeals can increase giving but framing matters. The signal your appeal sends shapes whether donors respond.
The psychology here is worth understanding. When donors read an appeal emphasizing that a community lacks resources, they’re processing two things simultaneously: the need (which motivates giving) and an implicit signal about the project and its context. Get the framing right, and the need becomes a compelling reason to act. Get it wrong, and the same information can raise doubts or create distance between donor and cause.
This is why I tell fundraisers that appeals are never just information delivery they’re signal management. Every fact you include tells donors something beyond the fact itself.
Try This:
- Pair need with capability. Don’t just describe what’s lacking — show a credible, specific plan for what the gift accomplishes. Need motivates; capability reassures.
- Test your framing. Run two versions of your next email appeal — one leading with need, one leading with opportunity — and let your donors tell you what resonates.
- Be specific about the gap. Vague statements about under-resourced communities perform differently than concrete, verifiable details about a specific classroom, program, or project.
- Watch what your appeal signals, not just what it says. Read your draft as a skeptical first-time donor would. What questions does it raise?
Evidence-based messaging beats intuition-based messaging. This study is a good reminder that even well-intentioned framing choices deserve testing.
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Bottom Line
This week’s takeaway: The ground is shifting on multiple fronts at once funding sources, technology practices, and donor vehicles are all evolving faster than most organizations’ internal processes. The winners in this environment won’t be the organizations with the most resources; they’ll be the ones that close the gap between knowing and doing. Nearly every trend this week shares the same shape: the sector broadly agrees on what matters, but action lags awareness. Your competitive advantage is simply moving first.
Three actions for this week:
- Run a revenue exposure check. Map your funding sources by type and ask your leadership team: if our largest source contracted 25%, what’s our plan?
- Close one operational gap. Pick the item you’ve been calling a “priority” without acting on an AI policy, a website fix, a donor vehicle you haven’t made easy and ship a first version by Friday.
- Test one appeal variant. Take your next scheduled donor communication and A/B test the framing. Let data, not habit, guide your next draft.
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Good in Action
Here’s the bright spot to carry into your week: the great wealth transfer isn’t coming it’s here, and generous people are writing nonprofits into their legacies at a remarkable pace. According to Giving USA data cited by Clairification, bequest revenue grew 19.7% from 2024 to 2025 (16.6% adjusted for inflation) (Clairification).
Think about what that number represents: thousands of everyday donors teachers, nurses, small business owners deciding the causes they loved in life deserve a place in their final act of generosity. And here’s the encouraging part for small shops: launching a planned giving program doesn’t require an estate attorney on staff. It can start with a single line in your newsletter — “Have you considered including us in your will?” and a page on your website.
The Lesson: Your most loyal donors are already thinking about their legacy. The organizations that simply ask clearly, warmly, and without complexity are the ones being remembered. Don’t let the size of your shop keep you out of the biggest generosity wave of our lifetime.