The not-for-profit sector in 2026: what charities need to prepare for

As the UK enters 2026, the not-for-profit sector is facing one of its most significant periods of change in recent years. Regulatory reform, rising operational costs and rapid digital advancement are reshaping how charities operate, govern and plan for the future.

While the landscape is undoubtedly challenging, it also presents opportunities for organisations that are prepared, adaptable and strategically led.

One of the most notable developments is the introduction of SORP 2026, mandatory for reporting periods beginning on or after 1 January 2026. The new framework introduces tiered reporting requirements based on income, aiming to reduce the burden on smaller charities while improving transparency across the sector.

Alongside this, audit thresholds will increase later in the year, with full audits required only for charities with income above £1.5 million, and independent examination thresholds rising to £40,000. These changes offer welcome flexibility but will still require careful planning and strong financial oversight.

Charities will also benefit from increased freedom in digital communications. From January 2026, a new “soft opt-in” allows organisations to contact supporters via email or SMS following previous interactions, providing greater flexibility in fundraising and engagement activity.

Despite regulatory relief in some areas, financial pressure remains acute. The rise in the National Living Wage in April 2026 will significantly impact charities with large or frontline workforces, intensifying the need for robust workforce planning.

Fundraising also remains uncertain. With donor numbers still affected by the cost-of-living crisis, many organisations are preparing for continued volatility and the possibility of reduced income streams.

Digital innovation continues to accelerate across the sector. By 2026, charities are expected to move beyond basic automation and begin using predictive AI to better understand donor behaviour and personalise communications.

At the same time, digital inclusion is becoming a core expectation. As services move online, organisations will be increasingly scrutinised on how they support service users who lack digital access or skills.

Sustainability is also influencing digital decisions, with “circular IT”, such as refurbished hardware, emerging as a practical way to align technology investment with environmental values.

These shifts are driving demand for leaders with hybrid skillsets. Trustees, executives and senior managers are increasingly expected to combine financial acumen, digital understanding and people leadership,  particularly during periods of transformation.

For charities navigating 2026, investing in the right leadership and specialist expertise will be critical.

In summary, while the year ahead brings complexity, it also offers charities the chance to modernise, strengthen governance and build resilience for the long term.