With 2026 underway, we’re kicking things off by looking at what the year ahead might hold for the NFP sector workforce.

And yes, as you might expect, AI will continue to have an impact on the sector this year. But it’s far from the only thing NFP leaders should be on the lookout for this year.

Here are our four predictions for the workforce trends the NFP sector will see this year.

1. AI hype will meet the reality of AI “slop”, disengagement and ethical complexity

Every day brings new headlines and development in artificial intelligence (AI) tech. As AI continues to move from experimental to everyday tool, it’s bringing a fresh set of challenges that NFP leaders will need to get their heads around.

With an Australian government report finding that around a quarter (21-27%) of all employees are using AI tools secretly at work, the potential for problematic misuse or employee disengagement is ever-present, presenting new risks for organisations.

In 2026, more organisations will need to contend with and contain “AI slop” – content made with generative artificial intelligence that is lacking in effort, quality, or meaning – before it negatively impacts funding applications, strategic plans, marketing or other important content.

This will mean creating new AI policies to define in a clear and transparent way for your staff and volunteers focused on how and when your NFP will use AI tools. And alternatively in which areas the organisation decides that human connection or input are essential.

For example, deciding to use AI tools to help write everyday or internal emails, but emphasising the importance and value of physical presence or real conversations over email/messaging when impact is needed or when donors or external stakeholders are involved.

This clarity will allow NFP organisations to invest more in developing employee AI literacy and encouraging its use to reduce admin or busy work, in turn saving time and money.

According to Claire Marshall, National Future Initiatives Lead at The Australian Centre for Social Innovation (TACSI), balancing the efficiencies of AI with ethics will also be a key priority for NFP leaders this year.

“We’re seeing these tools as both damaging and inevitable,” she says. “On the one hand, they promise real cost and time savings for vital NFP work, like grant writing and evaluation, but on the other, those processes involve giving up sensitive data. People need to understand not just how their data is used, but how it may be used to train and shape these systems.”

NFPs will also need to contend with the widely-documented issues of bias and discrimination inherent in many AI systems – risks that could directly undermine the social goals of the organisations that are using them.

“There will be a growing awareness that AI could actually compound some of the issues that NFPs are working hard to solve,” Marshall says. “Many of these tools reinforce dominant narratives and cultures, and do not reflect the diversity of the population of Australia. This has the potential to increase marginalisation.”

The good news is, support is growing to help organisations make more ethical decisions about AI use.

The Australian Government’s Digital Transformation Agency has developed an AI impact assessment tool that allows organisations to assess an AI use case against Australia’s AI ethics principles. It’s a useful tool for any organisation considering integrating AI into its workflows.

2. Cost-of-living pressures will continue to be a significant issue for staff and volunteers

Cost of living was an ongoing challenge for many in 2025, and with good reason. The Australian Bureau of Statistics reports that the cost of housing, food, clothing, health services and education rose by almost four per cent in the 12 months to December 2025 – well above expectations. It’s no wonder, then, that the cost of living is expected to continue to be a big issue for the NFP workforce in 2026.

We know the NFP sector is full of passionate people who work for more than just a paycheck, but even the most passionate individuals have bills to pay – and when costs keep rising, many are forced to weigh purpose against financial security.

This will place additional strain on organisations that rely on volunteer participation alongside paid staff, with rising costs known to reduce people’s capacity to donate time, travel to roles and absorb out-of-pocket expenses.

While these pressures may be beyond an organisation’s control, there are still meaningful ways to support staff and volunteers through what may be a financially challenging year for many, including:

• Giving staff flexibility in their work hours where possible, reducing stress by allowing them better to juggle parenting, carer or other life responsibilities with their work. An added benefit will be better staff engagement, since flexible work arrangement is the top perk that NFP employees say they want from employers.
• Where possible, increase remote work opportunities for employees to save them money on transport, parking, and food costs.
• Where financially possible, do salary reviews to ensure non-Award employees are paid reasonable salaries, in line with market rates.
• For volunteers, small steps like covering out-of-pocket costs, offering travel support or remote options, and being flexible about time commitments can make people feel valued and supported.
• Make sure all employees are 100% clear on any salary packaging/sacrificing benefits they are eligible for, and are using them fully. While hard data isn’t available, one salary packaging provider said the participation rate is really low particularly in the NFP sector:

“Not for profit organisations… usually will have [only] about 60 to 70% of their staff actively participating. [If] you understand the benefits you’re like, why isn’t everybody doing this? It can be a huge benefit”.

3. Peer-to-peer support will play a bigger role in how NFPs deliver services

According to Marshall, we’re going to see more NFPs building peer-to-peer support into their programs, as funders and communities recognise the value of putting lived experience at the centre of their work.

“Peer-to-peer support is essentially about people learning from others who’ve been through the same thing,” Marshall says.

“Imagine you’re a parent whose child has just been diagnosed with a chronic illness. You might understand the steps the health system lays out, but it’s often not until you connect with another parent who’s been through it that you learn how to truly live with that change.”

With traditional support services struggling to keep up with demand and find enough staff, peer-to-peer programs draw on a ‘hidden workforce’ of community members who use their own lived experience to support others.

Marshall says NFPs will see shifts from simply valuing lived experience to recognising it as lived expertise.

“It’s being seen as something that can and should shape how NFP services are designed and delivered,” she says.

“It’s important to note, however, that this kind of work requires things to be done differently. From HR and recruitment to internal structures and pay models, building a sophisticated peer-to-peer workforce takes new systems, new leadership and the courage to rethink how you’ve always worked.”

4. Management and leadership roles will get harder to fill 

It’s been called ‘conscious unbossing’ – but whatever you refer to it as, it’s making life more difficult for many organisations: fewer young employees are putting their hands up for leadership or management roles.

Across sectors, a growing number of employees are choosing not to pursue management roles, pointing to more stress, heavier workloads and reduced work–life balance as key deterrents.

Meanwhile, flatter structures and small teams mean senior staff often remain in the same positions for longer periods, creating progression bottlenecks and limiting opportunities for others to step up.

For NFPs, these pressures are amplified. Leadership can mean heavier compliance, funding uncertainty, emotional labour and sometimes only modest pay increases. After several years of burnout and cost-of-living strain, many capable mid-career professionals are choosing to remain specialists or frontline practitioners rather than step into roles that feel riskier or unsustainable.

The good news is that this isn’t simply a talent shortage; it’s a structural challenge. You can keep talent moving and make leadership more attractive by:

• Prioritise wellbeing and flexibility by addressing burnout, offering flexible hours, remote work opportunities.
• Consciously develop a pipeline of future leaders by using tried and tested tools like offering mentoring, giving them access to exciting, high-level challenges, or more regular access to senior leaders.
• Work on passing administrative and compliance burdens to AI tools where possible, so managers can focus on communication, engaging with their team and strategy instead of paperwork.
• Talk openly about career goals in performance conversations with potential managers and leaders, allowing time to answer and address concerns.

The challenges the sector faces won’t get any easier in 2026. But with some planning and awareness of the key dynamics taking place, we hope the NFP sector will come through the year stronger and better positioned for the future.

Image credit: SHVETS production