Government Funding is in Flux — 3 Tips for the Fall
If it feels like government funding is less predictable than ever, you’re not imagining it. Uncertain appropriations have nonprofits of every sector across the country bracing and doing their best to prepare for what comes next. For organizations that rely on federal, state, or local dollars, the question becomes how to prepare when the ground beneath you feels shaky and still be able to execute on your mission.
The good news is that while most of us can’t control government processes, you can take steps to safeguard your mission and steady your fundraising strategy this fall. Here are three moves to consider for this fall:
1. Diversify Your Funding Mix
Alright, roll credits! Kidding (sort of)—this might seem like the no-brainer advice that anyone would give. However, those who take the necessary steps to actually diversify their fundraising mix this fall will almost certainly be the minority of nonprofits. Relying too heavily on government support leaves your organization vulnerable when policies shift or budgets stall. Now is the time to build balance into your revenue streams. That could mean:
Strengthening your individual giving program
Building relationships with foundations that share mission alignment with yours rather than the scattershot approach
Expanding corporate partnerships with a priority on more long-term relationships rather than one-off sponsorships
Even modest growth in these areas creates some buffer when government funding slows or fluctuates.
2. Communicate with Donors About the Reality
Your supporters care about your mission, but they may or may not realize how much government funding impacts your work. It’s okay (and preferable) to be transparent. Let donors know that volatility in government budgets means their support is more critical than ever.
This is not to say that you should take the approach of al doom-and-gloom messaging. Instead, frame it as an invitation: “Your gift helps us keep serving, no matter what’s happening at the Capitol.”
Your more savvy donors probably recognize that this is happening as well, so it’s okay to talk to them about it.
3. Revisit Your Reserves and Planning
Uncertainty is a reminder to check your financial safety nets. If you have reserves, are they sufficient to cover operating costs in case a grant is delayed? If not, now is the time to strengthen them.
The risk tolerance of how much to have in reserve is going to vary depending on the organization’s leadership and current financial goals. So this is certainly isn’t a one-sized-fits-all scenario. It is though best practice to know how much risk your organization is willing to tolerate while balancing cash flow, capital needs, programming, and reserves.
Additionally, scenario planning can help prepare your board and staff for different outcomes. Ask questions like:
What happens if a key government grant is cut entirely tomorrow?
What if payments are delayed by six months?
How do we adjust programs without losing substantial impact?
Plan now and reduce your panic later. No matter how uncomfortable tough budget conversations can get, they’re far better when you’re having them in the interest of proper future planning rather than necessity.
Government funding is in flux, but your nonprofit doesn’t have to be. Take a few simple steps this fall to get out in front of this so that we’re proactive rather than reactive to forces that are ultimately out of our control.
Need help with planning your fundraising for the fall? We work with nonprofits all over the country to create practical implementation plans to help scale up their revenue. Send us a message and we would love to learn more about your nonprofit!
