Surviving Tariff Wars: Financial Planning Tips for Nonprofit Organizations

Navigating the Storm of Trade Tensions

Running a nonprofit is already tough, but recent trade problems between the U.S. and Canada are making it even harder.

On February 1, 2025, the U.S. added a 25% tax on Canadian imports, except for energy products, which have a 10% tax. In response, Canada put a 25% tax on certain U.S. products (Reuters).

For nonprofits, this means higher prices for supplies and fewer donations as people and businesses struggle with costs. To survive, nonprofits must plan their finances wisely, find new ways to raise money, and cut unnecessary spending.

Take Community Care Kitchen, a Canadian food bank that relies on imported U.S. canned goods. Overnight, their operational costs surged by 20%, forcing them to cut meal deliveries. Stories like this are becoming common—but they don’t have to be yours.

In this post, we’ll explore actionable strategies to help your nonprofit weather tariff wars, protect your mission, and emerge stronger. Let’s get it.

Assess Your Financial Health: Know Where You Stand

Before making changes, understand your current position.

Step 1: Review Financial Statements

Pull your balance sheets, cash flow statements, and budgets. Look for:

• Rising costs in program delivery (e.g., imported supplies).

• Fluctuations in donations (individual or corporate).

Example: A youth mentorship program noticed a 15% increase in tech equipment costs due to tariffs. By identifying this early, they pivoted to refurbished devices.

Step 2: Identify Vulnerabilities

Ask:

• “Which programs rely on tariff-affected goods/services?”

• “How might donor behaviour shift if the economy slows?”

Diversify Revenue Streams: Reduce Reliance on At-Risk Funding

Tariffs create uncertainty, but they also push nonprofits to innovate.

1. Tap Into Local Grants and Community Fundraising

• Apply for municipal grants prioritizing “Buy Local” initiatives.

• Host community events (e.g., charity auctions) with a “Support Local” theme.

2. Partner with Resilient Corporate Sponsors

Businesses benefiting from domestic demand (e.g., renewable energy firms) may have increased CSR budgets. Pitch partnerships that align with their goals.

3. Launch Transparent Donor Campaigns

Be honest about how tariffs impact your work. 

Sample messaging:

Strategic Cost Management: Do More with Less

Prioritize Mission-Critical Spending

• Postpone facility upgrades or non-urgent tech investments.

• Renegotiate contracts with vendors. Example: A U.S. shelter saved 12% by switching to Canadian-made bedding.

Reduce Overhead Creatively

• Share office space or administrative staff with neighboring nonprofits.

• Go paperless and adopt energy-efficient practices to cut utility bills.

Long-Term Budget Adjustments: Build Flexibility

Trade tensions may linger, so plan for volatility.

1. Create a Tariff Reserve Fund

Allocate 3–5% of your annual budget to a contingency fund. Even small amounts add up.

2. Adopt a Rolling Budget

Update forecasts quarterly instead of annually. This lets you adapt quickly to new tariffs or economic shifts.

Engage Stakeholders: Transparency Builds Trust

• Board Members: Share scenario-based financial projections.

• Donors: Send quarterly updates explaining how their support mitigates tariff impacts.

• Staff: Involve program teams in cost-saving brainstorming sessions.

Pro Tip: Host a virtual “Town Hall” to address concerns and crowdsource ideas.

Leverage Technology: Automate and Analyze

Tools like QuickBooks Nonprofit, Fathom or Aplos can:

• Track expenses tied to tariffs.

• Model scenarios (e.g., “What if donations drop 10%?”).

• Automate grant reporting to save staff time.

Measure Progress: Celebrate Small Wins

Set KPIs like:

• % reduction in tariff-affected spending.

• $ amount raised through new revenue streams.

Review progress biweekly, and celebrate milestones—even stocking the break room with coffee can boost morale!

Conclusion: Resilience Is Your Superpower

Tariff wars test nonprofits, but they also reveal opportunities to innovate. By diversifying revenue, managing costs strategically, and engaging stakeholders, your organization can sustain its mission—no matter the economic climate.

As the director of a Toronto-based arts nonprofit recently told us:

Your turn. Start today, and let resilience define your next chapter.

To further assist you in navigating these challenges, consider utilizing the Streamlined Nonprofit Toolkit.

This comprehensive resource offers practical tools and strategies to help your organization operate more efficiently and effectively.

By planning and leveraging available resources, your nonprofit can survive this financial storm and come out even stronger.

Share your story in the comments—how is your team adapting?

Sources:

• U.S. Tariffs on Canadian Imports (Reuters)

• Canada’s Retaliatory Tariffs (Reuters)