5 things nonprofits wish funders understood

As federal funding cuts loom, legislation changes, and community needs rise, nonprofit organizations are increasingly challenged to do more with less. While these pressures are nothing new to the sector, now the stakes feel bigger and the long-term impacts far greater.  

To understand more about what’s at risk, Bonterra surveyed 2,608 nonprofit professionals and 107 funders, drawing on our broad platform of data and customer experiences. The results speak for themselves: Over half of nonprofits are facing financial instability. About two-thirds of organizations said they are operating in survival mode, and many nonprofit workers fear job cuts may hit their organization. 

A new landscape requires new ways of thinking, and successful collaboration hinges on nonprofits communicating current challenges — and funders hearing them clearly. 

Based on our survey, here are five things nonprofits wish funders understood as everyone navigates the changing landscape. 

1. Funding is shrinking as demand is growing 

Federal funding cuts and reduced resources don’t remove the need for support; in fact, communities increasingly need more help as climate crises multiply and income inequality rises. Nonprofits face a unique paradox: They must do more with less capacity. 

This problem is widespread. Survey results found that the types of organizations seeing an increased demand in programming include: 

• Health: 53% 
• Human services: 52% 
• Civic engagement: 60% 

Funders must understand that although nonprofits are faced with less funding and fewer resources, they must continue to deliver timely, relevant programs because their communities are depending on it.  

2. Competition affects more than funding opportunities 

Communities are relying on nonprofits for more programming and greater impact. As a result, existing nonprofits are constantly stretching, and new nonprofits are forming to answer the call. A crowded marketplace, coupled with federal cuts, creates an endless cycle of competition for attention and dollars. 

But competition isn’t only about dollars; it reshapes how organizations spend their days. Staff time is already scarce, and this forces them to focus more on research and grant writing. A lengthy process, this takes energy away from delivering much-needed, mission-driven programming — the very thing communities are desperate for.  

To help with this, funders can be cognizant of the application process for their grants. For example, cutting out unnecessary questions to shorten the application process. Even small edits allow nonprofits to reallocate their time to other critical tasks. 

3. Diversified funding is the way forward 

Relying on a single source of funding is risky for nonprofits, especially in light of federal funding reductions. Additionally, if a source of revenue dries up, the programs that funders care about may be at risk. To ensure uninterrupted delivery of their services, organizations are implementing smarter strategies to secure alternative sources of revenue. Common approaches include: 

• Engaging with recurring givers on a regular basis 
• Expanding the pool of individual donors 
• Developing relationships with corporate partners 
• Strengthening momentum with major donors 

With multiple income streams, funders dollars stretch further, equipping nonprofits to stay afloat and adapt quickly amid any disruption. 

4. Technology unlocks greater impact 

Demand is growing, and pressure to deliver high-impact programs is mounting. Rather than hiring more staff, organizations are turning to technology to handle the pressure. These platforms enable teams to:    

• Reduce administrative responsibilities 
• Turn data into compelling stories 
• Create improved donor experiences 
• Drive leads into the pipeline via email 

Strong tools enable teams to track and report more outcomes. This shows funders how impactful their investments are. It also ensures their dollars are stretched further, increasing return on investment.  

Working with the right provider makes all the difference. Bonterra’s software suite equips nonprofits to engage donors and simplify workflows. This drives more funding and greater impact, allowing organizations to focus on advancing their mission.  

5. Advocacy defines the future for nonprofits 

Far too many nonprofits are stretched thin, and advocating — whether externally or internally — can enhance their ability to secure vital support. External advocacy involves speaking to audiences such as funders, policymakers, and the public. Internal focuses on changes inside the organization, like adopting a new technology platform. 

No matter what type, advocacy must be intentional, consistent, and powered by effective communication. Funders then clearly see where their dollars make the most difference.  By speaking up, nonprofits can secure the necessary resources today to continue creating lasting impact. 

Learn more about how the federal funding disruptions are affecting the sector.