NGOs in Guatemala face several persistent challenges that affect their ability to deliver long-term impact. One of the most significant issues is donor dependency and short-term funding. Much of the support NGOs receive comes from international donors, sponsors, and grants, which are often project-specific and limited in duration. This reliance on foreign funding makes organizations vulnerable to changes in donor priorities and global economic fluctuations, while constraining their ability to plan sustainably. A related challenge is the limited culture of domestic philanthropy. Individual giving and recurring donations are only beginning to develop in Guatemala, and many NGOs must work hard to cultivate local support, as initiatives like Giving Day are still in their infancy. Government support for NGOs is minimal, with public funds directed almost exclusively to public institutions, leaving NGOs to rely heavily on private donors, corporate partnerships, and grants.

Administrative and regulatory burdens also pose a barrier. NGOs must navigate significant paperwork and compliance requirements to maintain legal status and access international funds, which can overwhelm smaller or grassroots organizations with limited administrative capacity. Competition for funding is high, with NGOs vying for the same international grants and sponsorships, often against competitors who organize large events abroad or maintain dedicated fundraising teams. Many NGOs are also challenged by limited income diversification; while some generate revenue through volunteer fees, hotel income, or social enterprises, these sources are inconsistent and insufficient to sustain operations. Finally, NGOs often struggle to differentiate themselves and communicate their unique impact, making it difficult to write compelling grant proposals and attract long-term support. Collectively, these factors make the work of Guatemalan NGOs precarious, requiring constant adaptation to a challenging funding environment.