Nonprofit Finance Management

This is not a political statement, this is a nonprofit organization management statement: Nonprofits have to be managed like a business. The panic today in regard to a “pause” in Federal Funding says more about nonprofit management than government policy. Three best practices for nonprofits: 1) Every Nonprofit should have multiple streams of revenue and options to sustain funding their mission. 2) Every Nonprofit should have at least 3 months of operating funds in reserve. 3) Every Nonprofit should have a CRM containing contact information for potential donors and corporate sponsors to reach out to in times of crisis or opportunity. If you have a Board of Directors overseeing the financial health of your nonprofit, you will have most likely done these three things. If a single source of funding ended tomorrow by either a policy change, a natural disaster or a pandemic, you wouldn’t panic. You would be in a position to continue your mission without interruption. If every nonprofit Board of Directors followed these three simple Best Practices, no one would ever go unserved due to a “pause” in funding.

Your board chair just asked if you have a backup plan for federal funding cuts. Here's what you should have told them. "We don't need a backup plan. We're building a primary plan that creates sustainable funding regardless of government changes." The current federal funding uncertainty is forcing every nonprofit to confront a fundamental question: How do we build financial stability that doesn't depend on political cycles? Your board chair is asking the right question. Now you need the right strategy. The organizations thriving through funding disruptions aren't just creating backup plans. They're building diversified revenue engines that work in any environment. This moment is your opportunity to transform how your organization approaches sustainability. Pull up your current funding mix. If more than 50% comes from government sources, this crisis is actually your catalyst for building something stronger. The most resilient nonprofits I work with use this approach: They treat government funding as project funding, not operational funding. They invest any federal dollars in building private fundraising infrastructure. They use government contracts to demonstrate impact that attracts private donors. They build relationships with supporters who care about mission, not politics. Your board chair's question reveals an opportunity to lead your organization toward sounder financial health. Instead of just answering their question, use this moment to propose a strategic shift: "Here's how we're going to build funding that survives any political environment." Show them a plan that creates multiple revenue streams, develops loyal donor relationships, and builds capacity that grows regardless of who's in office. This funding disruption isn't just a crisis to survive. It's a chance to build the financial foundation your mission deserves. Because the strongest nonprofits don't just weather storms. They use them to build better ships.

Grants will never address the scale or structure of education financing gaps. But philanthropy can rewire how education is financed. I contributed to a recent report by McKinsey & Company on this shift. While education is financed at scale via public budgets, MDBs, and domestic resources, much of that capital remains weakly linked to evidence and outcomes. Alignment is where philanthropy has leverage: Endowment impact investing could unlock ~$26bn annually by allocating just 5% of education endowments, while guarantees to governments could mobilize ~$21bn through blended debt structures such as the International Finance Facility for Education (IFFEd). At first glance, these look like scaling instruments. What the report does not state explicitly is that they are engineered as capital convergence mechanisms: They align balance sheets, risk, and incentives across actors and connect capital to outcomes. Philanthropy won’t fill the gap. But it can determine whether existing capital delivers.

As a mom of two, a pet owner, and a wife, I’ve learned that life is full of surprises—some more welcome than others. But as a grant writer supporting health agencies in securing life-saving federal funding, the unexpected federal funding freeze hits hard. I’ve seen firsthand how these grants sustain critical programs and save lives, which makes this uncertainty feel especially heavy. When faced with crises like this, I lean on three things: staying still enough to assess the reality of the moment, acknowledging what’s beyond my control, and taking proactive steps to move forward. The truth is, while we can’t change the federal funding freeze, we can adapt. And if history is any guide, we may see increased opportunities for non-federal or emergency funding (like we saw during the pandemic.) If your organization is grappling with what’s next, here are five actionable steps you can take now to stay ready: 1. 𝐀𝐬𝐬𝐞𝐬𝐬 𝐏𝐞𝐧𝐝𝐢𝐧𝐠 𝐆𝐫𝐚𝐧𝐭𝐬 Start by reviewing the status of any pending federal or pass-through grants. Keep an eye out for changes like award ceilings being reset to $0 or grants disappearing from platforms like Grants.gov. Staying informed will empower you to make clearer, faster decisions. 2. 𝐃𝐨𝐜𝐮𝐦𝐞𝐧𝐭 𝐄𝐱𝐩𝐞𝐧𝐬𝐞𝐬 Even if funding feels shaky, continue documenting all incurred expenses. This ensures smoother reimbursements when payment systems reopen. 3. 𝐄𝐯𝐚𝐥𝐮𝐚𝐭𝐞 𝐄𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭 𝐃𝐞𝐜𝐢𝐬𝐢𝐨𝐧𝐬 Before making tough calls about layoffs, check whether your program is legally protected by statutory funding requirements. Some programs have safeguards that bind Congress to continue funding them. 4. 𝐑𝐞𝐬𝐞𝐚𝐫𝐜𝐡 𝐍𝐨𝐧-𝐅𝐞𝐝𝐞𝐫𝐚𝐥 𝐅𝐮𝐧𝐝𝐞𝐫𝐬 Be proactive and look into non-federal funders you’re connected with. Many are already gearing up to provide emergency aid, which could offer a lifeline for your organization. 5. 𝐏𝐫𝐞𝐩𝐚𝐫𝐞 𝐘𝐨𝐮𝐫 𝐈𝐦𝐩𝐚𝐜𝐭 𝐒𝐭𝐚𝐭𝐞𝐦𝐞𝐧𝐭 Crafting a strong impact statement now will position your organization to respond quickly when funders ask for one. Reflect on lessons learned during the COVID-19 pandemic: having a clear and compelling statement of need can be a game-changer. Need guidance?  ✍️ Check out our blog: https://lnkd.in/eJgHNtgW We’ve weathered funding uncertainties before, and we’ll do it again. By staying prepared and adaptable, your organization can emerge stronger and ready to seize new opportunities. If you have additional tips or questions, I’d love to hear from you in the comments. Let’s navigate this together. #GrantWriting #FederalGrants

I said I didn’t believe diversified funding was a smart strategy for most nonprofits, and the post exploded. People had a LOT of feelings on the subject, but you also wanted more recent research. So I found it for you: https://lnkd.in/gWVQb-aU And if you were on team diversification, you aren’t going to like this very much: The original Bridgespan study found the vast majority of nonprofits that reached $50M+ didn’t get there by diversifying. They grew by concentrating on one primary type of funding, ranging from individual donors, foundations, corporations, government, and fees. What they didn’t do was chase all funding types at once. Fast-forward to the 2024 update from SSIR (which expanded the data set from 144 organizations to 297), and the conclusion remained: Concentrated funding is the dominant pattern among the largest, fastest-growing nonprofits. So the findings from almost 20 years ago weren’t a historical quirk. Most nonprofits that scale successfully tend to double down on what works, not spread themselves thin across every revenue stream imaginable. But just to be clear… This is NOT a recommendation to “put all your eggs in one basket.” No responsible strategist would suggest that! Risk management and contingency planning still matter. What this IS about is recognizing that: → Pursuing every revenue stream divides capacity you don’t actually have. → Managing multiple distinct funding models requires expertise that most organizations can’t maintain simultaneously. → The nonprofits that get big usually do so by choosing one primary funding type and building systems within it. Not by dabbling in 8-10 different approaches. Or as Katie Curran put it on my last post: “Double down where you do well and don’t spread yourself too thin chasing every pot.” Or Lisa Moultrie shared "If your organization wants to grow, the question isn’t, “How many kinds of funding can we add?” It’s, “What type of funding can we build real capacity around?” The latest data tells the same story, and it continues to inform my strategic approach for the nonprofits I consult with: Focus fuels growth. Dilution does not. 👋Hi, I’m Lori, the strategic consultant who helps nonprofits focus on what matters most: turning big-picture ideas into action and elevating your social impact.

If I'm in charge of revenue at a large nonprofit, I can't ignore these realities 👇 -Donors giving below $100 are down ~9% (and have been trending down) -Donors giving below $500 are down 4% (and have been trending down) -Slower income growth & less disposable income for most -Middle-class households under economic pressure -The rapid decline of religion (that has giving as a core tenet) -Decline in institutional trust -Not only is charitable giving largely stagnant as a % of the GDP, but we also haven't been able to grow share of wallet -Donors giving $5k-$50k are up 1% -Donors giving $50k+ are up ~3% And if I look around at what other nonprofits are doing, I might see 👇 -Marketing getting louder -Frequency cranked to 11 -Tired tactics with little differentiation And if strategy is about how an organization applies strength against the most promising opportunity or the most critical challenge, I need to address the problem head on. Three ideas... 1) Instead of getting louder, get closer to donors. -Jeffersonian dinners -"Jobs To Be Done" interviews -Measuring donor satisfaction -Rating the donor experience -Cross train across the org on how to listen to donors -More thoughtful prioritization and segmentation -Do things that don't scale; you will likely not "scale" anyways (but you'll very likely grow!) 2) Focus more energy on the people who *can* give more. That doesn't mean you should ignore the $100 donor. Two things can be true at the same time: most of your limited human hours are best spent on people who can give >$10,000, AND, you can treat the $100 donor like they're an important part of the team (because they are). -Create tiered caseloads (A, B, C, D donors) -Develop a donor engagement plan for each tier -Treat mid-major donors like true partners: frequent report backs, project proposals, town halls, feedback loops, in-the-moment updates -Focus your work in the 'mass' file to identify the best prospects for a mid-major treatment, and work to move as many OTGs to recurring (monthly) or re-occuring revenue (quarterly, yearly, etc.) 3) Promote giving from assets across the donor file—and make it easy to do so Russell James taught me this. When people give from their assets, the gift is likely to be larger. And they are more likely to give again. Giving from assets (like stocks and shares, tax-savings accounts, retirement accounts, DAFs, gifts of life insurance, etc.) is often the smartest way for donors to give—no matter the size of gift. But many donors simply don't know it's an option. -- We're partnering with growth-minded nonprofits to implement all of these ideas, and more. If you think it's time you create a solid midlevel giving strategy (not just a standard appeal with an open ask), give me a shout.

I remember when I was a grant writer, working our grant calendar to secure funding, when Jeff Bezos announced his first major round of philanthropic giving. Almost immediately, my boss (on orders from the CEO) came to me with a directive—find a way to get in front of him. Get his number. Land the meeting. I remember feeling the weight of that ask. How was I supposed to make that happen? There was no relationship, no clear alignment—just a vague hope that somehow, I had his number in my back pocket and that we’d catch his attention to secure funding. It was frustrating, and ultimately, ineffective. Fast forward to today, and I see so many fundraisers experiencing that same pressure. With the federal funding freeze creating uncertainty, nonprofit leaders are feeling the strain and, understandably, looking for solutions. But when the response is to send already overwhelmed fundraising teams on a mission to “find new donors” without a clear plan, it only adds to the stress and uncertainty. If that’s where you find yourself right now, I want to acknowledge how hard this moment is. Fundraising is already challenging, and navigating a shifting funding landscape without a roadmap can feel overwhelming. But instead of reacting out of urgency, I encourage you to take a breath and step back. A thoughtful, strategic approach will serve your organization—and your team—far better than a frantic search for funding. Here’s where to start: ✅ Assess Your Current Revenue Streams – Take stock of where your funding is coming from now. Which sources are stable? Which are at risk? Understanding this will help guide your next steps. ✅ Deepen Relationships with Existing Donors – Your current supporters are your greatest asset. Strengthening those relationships can often lead to increased giving and deeper engagement. ✅ Diversify with Intention – Rather than scrambling for new funders, explore how to expand and balance your revenue mix. Are there opportunities for unrestricted giving, partnerships, or earned income? ✅ Clarify Your Case for Support – If you’re seeking new funding, your message needs to be compelling and clear. Why should someone invest in your mission right now? What difference will their support make? This is a tough time for many nonprofits, but you don’t have to navigate it alone. If your team is feeling the pressure and you need a path forward, let’s connect. A strategic, relationship-driven approach will not only help you weather this moment but set you up for long-term success.

I just studied a Harvard Business School case on Yale University’s $31.2 billion endowment, and what I learned blew my mind: Yale mastered the art of turning money into more money at a scale most nonprofits can only dream of. Nonprofits can apply the same principles to break free from the endless fundraising cycle and create long-term sustainability. Let me show you how. A Masterclass in Smart Investing: Yale’s Investment Office, led by David Swensen, took an unconventional approach: ✔ Prioritized equity over fixed income → Returns beat inflation. ✔ Invested in inefficient markets → Higher risk, but also higher returns. ✔ Built long-term relationships with top fund managers → Consistency over market timing. ✔ Avoided large institutions with misaligned incentives → No conflicts of interest. ✔ Maintained liquidity while holding illiquid assets → Could withstand downturns without panic selling. The result? Yale’s endowment generates more in annual returns than most universities have in total assets. But nonprofits can apply these principles, too. What Nonprofits Get Wrong About Funding Most nonprofits rely on: ❌ Short-term fundraising (galas, one-off donations). ❌ Restricted grants (funders dictate spending). ❌ Chasing capital without a strategy (constant survival mode). This isn’t scalable and leaves organizations vulnerable. Enter Venture Philanthropy: The Private Equity of Nonprofits What if nonprofits took a venture capital approach to funding? Instead of one-off grants, they would: ✅ Secure long-term investments (multi-year funding commitments). ✅ Align funder incentives with impact (performance-based funding). ✅ Build strategic relationships with capital providers (not just donors, but investors). This is venture philanthropy, treating nonprofit funding like an investment. And guess what? It works. Nonprofits that adopt this model scale faster, sustain funding longer, and create bigger impact. How to Apply Yale’s Strategy to Your Nonprofit 1️⃣ Think Like an Investor → Stop fundraising just to “survive” and start raising capital to grow. 2️⃣ Prioritize Long-Term Funding → Multi-year commitments > one-time donations. 3️⃣ Diversify Revenue Streams → Private funding, earned income, impact investing. 4️⃣ Find the Right Capital Partners → Work with funders who share your vision (not just those who give the biggest check). 5️⃣ Play Offense, Not Defense → Build financial reserves, so downturns don’t derail your mission. Yale didn’t build a $31B endowment by accident. They followed a disciplined strategy, invested in high-performing assets, and prioritized long-term value creation. Nonprofits that do the same will break free from the endless fundraising cycle and create sustainable impact for decades. Want to level up your nonprofit’s funding strategy? Start thinking like Yale. With purpose and impact, Mario

Building Resilient NGOs: Navigating the USAID Shutdown & Beyond The recent global suspension of USAID funding has raised pressing concerns across the development sector, particularly for NGOs in Africa. It’s a stark reminder of the risks of over-reliance on single-donor funding and the need for a more resilient, diversified, and strategic approach to non-profit sustainability. As Operations Management Professionals, we must proactively prepare for such shifts. Here’s how NGOs can mitigate risks and adapt: 🔹 Diversify Funding Streams: Over-dependence on one donor is a vulnerability. Now is the time to explore European, African, and private-sector funding, build strategic partnerships, and consider social enterprise models for revenue generation. 🔹 Strengthen Financial Resilience: Every NGO should have reserve funds covering 6-12 months of operations. Flexible financial planning ensures continuity when funding is disrupted. 🔹 Optimize Operations for Efficiency: Leaner, more cost-effective structures ensure sustainability. Shared services, digital solutions, and smarter procurement strategies can drive operational efficiency without compromising impact. 🔹 Prioritize Local & Regional Partnerships: African-led organizations must leverage regional bodies (AU, EAC, ECOWAS, SADC), community-based organizations, and corporate donors to build sustainable support networks. 🔹 Adapt Program Design: Shifting donor priorities demand agility. NGOs must align their interventions with emerging funding trends, ensuring their work remains relevant and fundable. The organizations that adapt, innovate, and strengthen local ownership will not only survive but thrive in the evolving funding landscape. 💡 What strategies is your organization using to navigate donor shifts? Let’s discuss! #NGOResilience #USAIDShutdown #USAID #OperationsManagement #FundingDiversification #SustainableDevelopment #AfricaLeadership #StrategicPlanning

🚨 The “Big Beautiful Bill” is now law. And while the headlines have already moved on, the fallout for nonprofits, public services, and the people we show up for every day is just beginning. 📉 More need. 💸 Less funding. 🧱 And organizations already stretched thin will be asked to do even more—with less. This bill is not what communities asked for. It’s not what the nonprofit sector needed. But now that it’s here, the question becomes: what do we do next? If you’re leading a nonprofit, this isn’t a moment for panic—but it is a moment for clear-headed action. Because here’s what we’re walking into: ⚠️ Federal grants are now at risk or gone. Programs may shrink or disappear. Some will come with new strings attached—or compliance traps that weren’t there before. 📉 Discretionary budgets are getting cut. Areas like housing, food access, health, and education will feel the squeeze. 📈 The needs around you will rise. And your community will still turn to you for help, whether or not the funding follows. So what does that mean for your next steps? 🔍 1. Understand Your Exposure Figure out which of your current programs or partners rely on federal dollars—directly or indirectly. Don’t assume someone else is already tracking it. Get the facts. 💡 2. Map What’s Still Available What public funds are still flowing? What state, city, or philanthropic sources can you turn to instead? Don’t wait for the next RFP to drop—start building relationships now. 📊 3. Get Clear on Your Core Work Which programs must continue? Which ones deliver the most impact for the resources you have? Which are overextended, and which are truly sustainable? 🗣️ 4. Rethink Your Messaging Now is the time to be clear, not flashy. Tell the story of your work in a way that grounds people in what’s changing—and what you’re doing to meet the moment. 🧭 5. Build the Plan—One Step at a Time You don’t need a 50-page strategy deck. You need a list of what’s at risk, what you’re prioritizing, who needs to be consulted, and what support you’ll need to stay steady. Talk to your board. Talk to your team. Get on the same page, then move forward together. And how we respond—calmly, clearly, collectively—will determine what’s possible. #Nonprofits #Grants #Tax #TaxBill #Government #Communications