Nonprofit organizations enter February 2026 facing sustained operational volatility driven by federal funding uncertainty, expanded regulatory oversight, workforce strain, and rising compliance expectations. This week’s Navigator News Update examines Congress’s rejection of proposed nonprofit program cuts in the FY 2026 spending package, the operational fallout from another brief federal shutdown, and intensifying federal enforcement activity affecting governance, DEI programs, and financial controls. Human resources developments highlight escalating burnout, recruitment challenges, evolving volunteer engagement models, and renewed legal uncertainty around harassment guidance and student loan forgiveness. IRS, accounting, and finance updates underscore heightened scrutiny of payroll, UBIT, audits, and new disclosure requirements, while state developments reveal tighter grant controls, new filing obligations, and targeted relief efforts. Together, these developments signal a demanding operating environment requiring proactive planning, disciplined compliance, and strategic resilience.
