Field Notes: Key Strategies Shared with Us by the Nonprofit Community
Did you know? In 2023, only 52% of the U.S. public trusted nonprofits, a decrease of 7% from 2020.
Pivoting in the nonprofit sector is not uncommon, but the nimble moves required in the wake of the COVID-19 pandemic are resurfacing in 2025. Your organization may be experiencing a fundamental shift in how federal grants are allocated, and many believe these changes are not just a one-time 2025 budget adjustment. This shift is affecting operational support, program development, and service delivery, requiring quick adaptation.
Here are some key strategies shared with us by the nonprofit community:
Risk Management
Implement or update comprehensive risk management strategies to ensure strong financial performance and protect your organization’s reputation. Competition for funding is increasing, and public trust is the currency of the nonprofit sector.
Board Engagement
Keep your board informed of significant changes to funding sources and new challenges so they can help guide your organization in fulfilling its mission effectively.
Credit
Consider obtaining or increasing lines of credit from banks, Community Development Financial Institutions (CDFIs), or other financing sources to manage delays in government grant reimbursements or potential government shutdowns.
Operational Adjustments
Manage reduced funding by cutting operational costs, leveraging technology, renegotiating contracts, and reducing overhead expenses while maintaining service delivery.
Mergers
Explore or increase discussions about merging with other nonprofits to sustain programming and services while reducing competition for funding.
Collaboration and Partnerships
Foster collaboration with other nonprofits, businesses, and local government agencies to pool resources and enhance your impact, addressing local community needs more effectively.
Diversifying Revenue/Funding Sources
Seek alternative funding sources such as private donations, corporate partnerships, and earned income opportunities, reducing the reliance on government grants.
Advocacy and Policy Engagement
Strengthen advocacy efforts to influence policy decisions and secure necessary resources. Build relationships with policymakers and share real stories about the impact of funding cuts to galvanize public support for sustained investment in social services.
Strengthening Donor Engagement
Engage with donors through personalized communication and demonstrate the impact of their contributions. Building strong local relationships can help ensure continued financial backing.
In conclusion, the nonprofit sector is navigating significant changes in federal funding allocations. By being proactive, agile, and collaborative, your organization can continue to deliver essential services and support to your community in this evolving landscape.
Prepared by Kelly Elkin, Commercial Banking Executive, Government and Nonprofit Banking
Source: Independent Sector