Over the next several months, we’ll discuss how small to medium-sized nonprofits with limited funding can stand out in a competitive landscape. This week, we’re focusing on High Stakes—because in the nonprofit world, every grant application and fundraising push can feel like a make-or-break moment.
Recently, we talked about Resource Drain and how easy it is to feel stretched thin when the rubber hits the road:
“Whether it’s competing for grants, staffing growing programs, or navigating this new landscape of uncertainty, it’s easy to feel overwhelmed across the entire organization. However, as a nonprofit, you have several advantages over for-profit organizations because your work is fueled by passion—not just the balance of your operating accounts.”
The emotional and operational weight of funding decisions typically hits around the 7–9 month mark of your fiscal year. By now, you’ve committed most of last year’s raised funds and are in the thick of the next fundraising cycle. The receipts—both incoming and outgoing—are piling up.
If the balance is positive, great—you have resources at your disposal. If it’s uncertain, financial strain can cloud day-to-day work, pushing your team into unnecessary survival mode. The feast-or-famine cycle taxes staff, donors, and volunteers, often leading to burnout and rushed decisions. Preparing for this reality can build resilience, stabilize your organization, and ease the emotional toll on your team.
Preparation: Plan to Win, But Prepare for Setbacks
You’ve got to build a pipeline. If you’ve ever run a lemonade stand, you know location is everything. If you’re on a cul-de-sac, you’d better hope mom and dad are thirsty, have deep pockets, and don’t mind multiple bathroom breaks.
Now, imagine there’s a street fair down the block, your neighbor’s band is playing, and—by some stroke of luck—one of them used to be in the Foo Fighters. That’s a pipeline.
Nonprofit fundraising isn’t much different.
The ask is the end of the pipeline—not the beginning. What four or more steps do you guide a potential donor through before making an ask? A basic approach might be:
Send a deck → Book a meeting → Make an ask.
But a strong pipeline allows relationships to grow over time. Maybe donors start as event attendees, become volunteers, then annual members, and eventually board members with a larger annual ask (bonus points if their company offers corporate matching).
Define your pipeline and the roles your staff play in the process. As long as you keep people entering the on-ramp, you won’t be scrambling to figure out where next year’s funding will come from.
Risk Mitigation: Reduce Vulnerability
You’re going to lose out on funding opportunities. That’s just part of the game. But if you’ve spread your revenue streams across multiple sources, no single loss will send your organization into panic mode.
Diversification isn’t just about grants. Your funding should come from:
- Individual donors
- Corporate sponsorships
- Federal & state grants
- Events & earned income
Without this balance, you’re one email away from learning that your federal grant has been canceled—and that’s when real panic sets in.
Build a reserve fund.
Now, let’s talk about endowments versus reserve funds—because they are not the same thing.
Endowments: If a donor offers one, pay attention to the fine print. Endowments often come with guardrails, meaning you can only use a set percentage based on market returns. In a down year, that percentage may shrink or even result in a loss of principal, leaving you with less funding than expected.
Reserve Funds: These are fully accessible without extra oversight. A reserve fund isn’t a bureaucratic headache—it’s your organization’s emergency parachute. Unlike endowments, reserve funds can be used whenever needed to cover unexpected gaps.
Set aside a percentage of various income streams into this fund. Even a modest reserve can provide breathing room during lean times.
Team Morale: Avoid the Doom Spiral
First of all, celebrate the wins—and do it in a big way. Surpassed a fundraising goal? Celebrate. Met a fundraising goal? Celebrate. Hit 80% of a goal? Celebrate—and strategize how to close the gap next time.
These moments of recognition fuel passion among staff, volunteers, board members, and donors. But passion alone isn’t enough—financial instability can drain even the most committed teams.
When people start worrying about their own livelihoods or whether their favorite program will get cut, negativity spreads like wildfire. It’s up to leadership to counteract this by consistently reinforcing progress and momentum.
Create a repository of success stories and share them publicly—via newsletters, all-staff meetings, or even a “Bright Spots” bulletin board.
Think of it like a kindergarten classroom sticker chart. We all like positive reinforcement, and when working together toward big goals, even the smallest victories deserve to be acknowledged.
Objective Assessment: Separate Emotion from Reality
Now that we’ve addressed the emotional side of funding challenges, let’s get into the data.
What’s working? What’s not? What needs to change?
- Adjust your pipeline if conversion rates are low.
- Track funding sources—if one dries up, find an alternative.
- Assess staff performance—are the right people in the right roles?
Nonprofit teams tend to focus on fixing problems, but don’t forget to double down on what’s working. If one revenue stream is yielding strong results, amplify it. If a particular fundraising strategy has high ROI, invest more resources into it.
Look at grant rejections as learning opportunities. Could your application have been stronger? Was the funder the right fit? Could that proposal be repurposed for another opportunity?
An annual fundraising post-mortem can be an excellent way to gather team input and refine your strategy for the coming year.
There’s been justifiable panic over shifts in federal funding. Promises made to nonprofits are, unfortunately, not always promises kept. That’s why contingency planning through strong preparation and risk mitigation is essential. But beyond financial planning, keeping your team engaged and mission-focused is just as critical.
- Celebrate achievements—even the small ones.
- Keep your team informed and involved in strategic decision-making.
- Use data to make smart pivots—not emotional ones.
By building resilience, diversifying revenue, and keeping morale high, your nonprofit can navigate uncertainty with confidence.
At The Barrow Gang, we’re passionate about helping nonprofits reach their full potential. Whether it’s strategic planning, board growth, or fundraising, we have the tools to support your mission.
📅 Schedule a free 15-minute consultation to share what you’re working on and discover how we can help make your vision a reality.
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