In today’s shifting political and economic climate, nonprofits must be more financially resilient than ever. With funding cuts pending, nonprofits need to have strong financial management practices in place to help mitigate threats and ride out this current wave of uncertainty. Here are a few strategies to keep in mind.
Diversify Your Revenue Streams
Although this may be challenging, it is risky to rely solely on one funding source. If possible, explore multiple funding streams. Be prepared to have honest conversations with your funders, as they may have suggestions or recommendations.
Stay Updated on Changing Regulations
With the current political landscape we are in there may be frequent policy shifts that may or could affect nonprofit tax filings, employment law, and financial reporting. Sign up for weekly Nonprofit Policy Updates from the Center to stay on top of these changes.
Plan for Building a Reserve Fund if You Haven't Already
Building a reserve fund takes time. Try to allocate a percentage of unrestricted revenue to reserves annually. While fundraising, be transparent with donors regarding your need for financial stability.
Consider Strategic Mergers or Collaborations with Similar Missions
While a merger isn’t the right solution for every organization, it can provide long-term stability, maximize impact, and reduce operational costs.
If Mergers Are Not Feasible Consider Shared Service Agreements or Joint Programming
This approach enables your nonprofit to continue providing services and minimizing potential negative impacts on the community.
Helpful Resources and Tools:
- Grant opportunities (check out NC Community Foundation for local funding)
- Nonprofit Policy Updates from the North Carolina Center for Nonprofits
- A Nonprofit Checklist: What To Do When Your Federal Grant or Contract Is Terminated, National Council of Nonprofits
- Resources for Navigating Uncertainty + Crisis, Maine Association of Nonprofits
Our Tip of the Month series shares practical advice inspired by our Principles and Practices Guide: Best Practices for North Carolina Nonprofits designed to help you strengthen your organization, engage your community, and achieve your mission.
