Washington’s September 2026 economic and revenue forecast shows a relatively stable outlook for nonprofits, though there are some mixed signals. The state economy is expected to keep growing, but factors like inflation, job and housing trends as well as changes in state revenue could impact nonprofit funding, costs, and the need for services.
Economic Growth Remains Positive
The U.S. economy is expected to grow by 2.1% in 2026 and 2.0% in 2027, with similar growth around 2% through 2030. Washington’s job outlook has improved since June. State employment should rise by 0.2% in 2026, then grow by about 0.8% each year from 2027 to 2031.
For nonprofits, steady economic growth can help with fundraising and planning. However, it’s important not to assume that growth will always lead to more donations or flexible funding.
Inflation Continues to be a Concern
Inflation continues to put pressure on both household and nonprofit budgets. National consumer prices went up 3.4% from August 2025 to August 2026, while prices in the Seattle area rose 4.4%. Energy costs in Seattle jumped even more, rising 15.9% over the year. Rising costs can directly impact nonprofit expenses like wages, transportation, utilities, supplies, technology, insurance, and facilities. It’s a good idea for organizations to review their budgets often and check if program funding keeps up with these increasing costs.
Employment and Demand for Services
Washington’s unemployment rate dropped to 4.9% in August. However, it’s expected to average around 5.1% in 2026 and 2027 before going down again later.
Meanwhile, job growth has been strongest in fields like education and health services. Nonprofits that help individuals in need should keep an eye on both the economy and what their communities need. Shifts in jobs, income, housing costs, and access to government help can affect the demand for food, housing, health, job training, childcare, and other services.
State Revenue Could Affect Nonprofit Funding
Washington’s total projected state revenue has shifted since June. The state expects $76.258 billion for 2025–27, $82.594 billion for 2027–29, and $94.121 billion for 2029–31. Some accounts are projected to increase while others, including the Workforce Education Investment Account, have been revised downward. Nonprofits that depend on state contracts, grants, or programs supported by state funding should monitor legislative and budget developments rather than relying solely on overall revenue growth.
What Nonprofits Should Do Now
This forecast highlights why being flexible and forward-thinking matters. Here are a few areas for nonprofits consider:
- Review budgets for inflation-related cost increases.
- Build or protect operating reserves where possible.
- Monitor state and federal funding changes that could affect programs.
- Prepare for potential changes in demand for services.
- Diversify revenue sources rather than relying heavily on one funding stream.
- Track local economic conditions, particularly housing and employment.
- Communicate clearly with donors about changing community needs.
The Bottom Line
Washington’s economy should keep growing, but nonprofits need to be ready for both growth and financial challenges at the same time. Steady economic activity can help with fundraising and investment, but higher inflation, job changes, and shifting public funding mean careful financial management is important. Nonprofits that update their budgets often, watch economic trends, and keep their funding sources diverse will be better prepared to meet changing community needs.
Reference
Washington State Revenue Review September 25, 2026. Economic and Revenue Forecast Council. https://erfc.wa.gov/sites/default/files/2026-09/rev20260925.pdf