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Good afternoon. Exciting things are happening. The Nonprofit Hustle just got our first sponsor, whoop-whoop! 🥳 And tomorrow is National Chocolate Chip Day! 🍪 So whether you’re planning to indulge in ice cream, waffles, or cookies, we hope you remember one thing: life is short.

On a more serious (and somewhat dire) note, nonprofits are struggling right now. Many are grappling with lower individual giving, less corporate funding, and labor shortages, among a myriad of other factors that threaten their ability to sustain their missions.

In this issue, I’m sharing a few different ways nonprofit leaders can address these challenges and navigate through these tough times.

— Ryan Almusawi

As we navigate this challenging landscape, it is crucial to adapt and explore robust strategies to maintain financial health and mission effectiveness.

Here are some detailed, actionable strategies to consider:

💰 Diversify Funding Sources

Now, I get it.

EVERYONE talks about “diversifying funding sources” like it’s something you can do in your sleep.

The reality is that it’s POSSIBLE.

Relying solely on corporate donations can be risky.

In fact, relying on ANY single funding source can be dangerous to your organization’s future.

You and your board should consider ways to expand your funding sources to include individual donors, grants, service fees, and online fundraising campaigns.

In doing so, consider engaging with smaller local businesses, community foundations, and exploring government grants that may be more stable in times of economic downturn.

One thing to note about government funding (or any grants for that matter) is that if you’re a new organization, it’s going to be extremely difficult — near impossible — to secure grants, as many funders want to see a solid impact history.

If you’re a new organization, your efforts to secure individual donors (e.g., friends, families, small businesses, etc.) would likely pay off more in the long-term.

You can fundraise, put those dollars to use in your community, and develop solid impact numbers that funders want to be a part of.

💌 Enhance Donor Engagement

Strengthen relationships with existing donors by keeping them informed and involved.

It’s so easy to put this off.

Don’t.

Regular updates on how their contributions are making an impact can encourage continued support.

Personalize your communications and create a regular schedule so you can hold yourself and other staff accountable to your donors.

Final thoughts: donors love seeing people.

In other words, THEY WANT TO SEE YOU. 

Try to send video wherever possible (e.g., social media, donor emails, etc.), and consider setting up exclusive donor events to deepen engagement.

These can be virtual events — it doesn’t have to break the bank.

💸 Implement Cost-Effective Operations

Review your current expenses and identify areas where costs can be reduced without impacting your core activities.

This might include renegotiating contracts, opting for virtual instead of physical events, or reducing non-essential overhead costs like office space if remote work is feasible.

At dream: success, we use a TON of tech.

There is SO much software we use that powers our website, allows us to communicate with our supporters, and increase gifts.

It’s easy to have a million recurring subscriptions without evaluating how essential they are to your organization.

As a nonprofit leader, you should be reviewing your organization’s bank statements monthly and questioning each line item, determining whether the money you’re spending is necessary.

📈 Financial Forecasting and Scenario Planning

Would you know the financial shape of your organization if individual donations went down 10%?

Would your organization have enough cash on hand to cover next month’s bills?

Do you even know what 10% of your donors amounts to?

If you said yes to all of the above, FANTASTIC! 🎉

If you said no to one or more of the questions above, you have some work to do.

Develop a detailed financial forecast that supplements your budget, and includes various scenarios, such as continued decreases in funding, stable funding, and increased funding scenarios.

This will help you prepare for different possibilities and make informed decisions quickly.

Many nonprofit leaders think this is the job of the treasurer or accountant.

Now, that’s not necessarily wrong.

But it’s also not fully correct.

As an accountant myself, I believe It is EVERYONE’S responsibility in a nonprofit to understand financials.

Whether you’re an executive director/CEO, a board member, or a staff member, you should be able to look at a financial statement and have a basic understanding of where the organization is financially.

📶 Invest in Capacity Building

Strengthening your organization's capacity in areas like grant writing (if you’re a new organization read the information above), digital fundraising, and volunteer management can enhance your ability to raise funds more effectively.

Consider training staff or recruiting skilled volunteers to build these critical skills.

You can also use LinkedIn to search for people who would be willing to be help.

If you’ve been here since the beginning, you know I LOVE Fundraise Up as a donor management tool.

(Disclosure: I’m a Fundraise Up partner and would love to help you explore donation tools! Shoot me an email anytime at [email protected])

🧑‍💻 Leverage Technology

Utilize technology to reduce costs and improve efficiency.

Tools for donor management, virtual event platforms, and digital marketing can expand your reach and improve fundraising efforts at a lower cost than traditional methods.

I’ve covered creating a monthly giving program here, and leveraging technology to help steward donors effectively will undoubtedly support your organization in the long-term.

While I love Fundraise Up as a donation management tool, Bloomerang is an incredible CRM for startup, small, and medium-sized organizations.

The great thing is that these tools have a native integration, so all of your donor information flows through seamlessly.

🔎 Focus on Impact Transparency

Clearly communicate the impact of your work to donors, stakeholders, and the community.

THIS IS SO IMPORTANT.

(So much so that I bolded AND underlined the previous line. 🫢)

Transparent reporting on how funds are used and the outcomes achieved builds trust and can motivate further investment in your organization.

It’s far too easy to overlook communicating impact to your donors — especially with competing priorities — but you HAVE to communicate with your donors to show the value of their contribution.

💼 Engage the Board

Ensure that your board of directors is actively involved in financial planning and fundraising.

Board members can leverage their networks and expertise to secure new funding sources and provide strategic guidance.

PUT YOUR BOARD TO WORK!

Your board of directors should be your organization’s biggest advocates.

That means sharing your organization with their networks, fundraising, and giving themselves!

(Ask yourself: if you’re board members aren’t giving, why should anyone else?)

👉 I wrote an entire issue discussing how to get your board engaged here!

🤝 Explore Collaborations

Partnering with other nonprofits or community organizations can lead to shared services, joint fundraising efforts, and reduced costs through economies of scale.

Collaborative grants are also an option, as many funders are looking to support cooperative efforts that maximize impact.

📊 Stay Informed About Economic Trends

Keep abreast of economic conditions and sector trends.

This knowledge can help you anticipate changes in funding patterns and adapt your strategies accordingly.

The National Council of Nonprofits offers an outstanding industry-focused email newsletter, regularly providing valuable insights on policy changes and economic factors affecting the nonprofit sector.

As we face these financial challenges, remember that resilience and adaptability are key to navigating this uncertain landscape.

By implementing these strategies, your organization can continue to thrive and make a meaningful impact, even in difficult times.

If I can be of service, you know where to find me!

Hustle always, 💪

Ryan Almusawi