Geneva/Brussels | January 2026 | Across Europe, NGOs and philanthropic organisations are entering 2026 under mounting pressure from a mix of political headwinds, rising compliance demands, and persistent funding uncertainty. Sector leaders warn that the operating environment is becoming more volatile even as need grows – from social inclusion and climate response to humanitarian support and democracy work.
A central concern is the continued “shrinking” of civic space. The European Civic Forum’s Civic Space Report 2025 documents an intensified pattern of restrictions on protest rights, smear campaigns, and administrative barriers affecting civil society in multiple countries. CIVICUS, which tracks civic freedoms globally, similarly points to a deterioration across Europe driven by the criminalisation of activists and increased constraints on assembly and expression. For NGOs, the impact is practical: higher security costs for events, more legal risk, reputational attacks that deter partners, and a chilling effect on advocacy.
Funding remains a second major fault line. Many organisations report that inflation-era cost increases have not been matched by grant uplifts, while competition for public and private resources has intensified. Philanthropy networks also highlight growing pressure from legal and regulatory barriers that can restrict cross-border funding and reduce incentives for giving. Smaller NGOs – especially those reliant on short-term project grants – face a squeeze between rising service demand and fragile balance sheets.
Compliance is the third challenge, particularly around financial regulation. Europe’s new anti-money laundering and counter-terrorist financing framework, adopted in 2024, is designed to strengthen the EU’s defences and includes the creation of a new EU authority (AMLA). While the sector broadly supports efforts to combat financial crime, philanthropy and nonprofit law experts caution that “one-size-fits-all” controls can translate into added administrative burden, slowed grantmaking, and banking “de-risking” that makes it harder for legitimate NGOs to maintain accounts or move funds across borders.
Looking ahead to 2026, NGO leaders expect three developments to shape the year. First, political polarisation is likely to keep civil society in the spotlight, with continued scrutiny of advocacy groups and heightened contestation around protest, migration, climate policy, and conflict-related solidarity. Second, regulators and banks will continue bedding in AML/CFT changes – making “compliance capacity” (policies, training, audits, partner due diligence) a defining factor in who can operate smoothly. Third, philanthropy is expected to lean harder into collaboration: pooled funds, shared back-office services, and longer, more flexible grants to stabilise core operations.
The outlook for 2026 is not uniformly bleak. But Europe’s NGOs begin the year with a clear message: protecting civic space, ensuring proportional regulation, and improving the sustainability of funding are now prerequisites for meeting Europe’s widening social and democratic challenges.
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