2025 Nonprofit Outlook: Connecting with Funders as You Plan for Changing Times

Last month, the federal government ordered a pause in grants and other federal assistance pending further review. While much remains unclear, this action will likely cause major disruptions among nonprofits that rely on government funding, as well as a ripple effect throughout the broader nonprofit sector.

Many foundations, for example, are taking a wait-and-see approach. Depending on how this situation evolves, they may reassess their priorities and shift funding to causes hit hardest by federal cuts. At the same time, competition for foundation grants will surely increase as nonprofits pursue new funding sources to offset losses.

Individual giving is also in a state of flux. According to CCS Fundraising’s 2024 Philanthropic Landscape Report, individual giving in the U.S. grew by 1.6%, but total donors decreased 3.4%. The number of donors contributing $50,000 or more dropped 7.4%, the largest decrease among all donor categories.

The bottom line is whether your organization depends on government grants or not, reliable funding sources are not a given.

So, what’s the best way to prepare for the worst case during these changing times? Last month, we offered guidance on communicating with the people you serve. This month, we’re focused on the vital importance of connecting with your funders.

Review Your Current Situation

As a first step, resist the temptation to make a series of panicked phone calls. Before you connect with funders, take a step back and assemble your organization’s board of directors and leadership team to examine the big picture:

• Assess your current funding sources and how they may change
• Reevaluate your priorities, determining what’s essential, what’s at risk and what might have to be scaled back or postponed if funding goes away
• Look at strategies to build a rainy-day fund and pursue alternate funding sources – be sure to hand out assignments and monitor progress
• Review your case for support – it must be convincing and backed by solid data

Take the Bull by the Horns

Once you understand your situation, it’s important to get ahead of the game. Don’t wait for funders to contact you about their shifting priorities – be proactive and informative.

• Reach out to key supporters and clearly explain how your organization will be impacted by potential funding cuts – be specific about how programs, services and initiatives will fare
• Show your determination to overcome obstacles and serve your community
• Be straightforward about what your organization needs to continue to carry out its mission, whether it’s additional funding or more flexibility with existing grants

Turn Donors into Ambassadors

Donors are essential to any nonprofit, but the real magic happens when they become recurring givers and – even better – enthusiastic advocates for your cause. If you build and nurture relationships with key supporters, they become a natural extension of your communications efforts. They can include major donors, active volunteers, board members or community members.

Now is the time to marshal these forces and ask them to:

• Share their stories and devotion to your cause through speaking opportunities or in news and social media. These activities help build awareness and potentially attract new funding sources.
• Contact state and federal elected officials to communicate the value your organization provides and what will be lost if funding is cut. By applying some pressure, these actions can move the needle in the right direction.

In the current environment, these advocacy efforts could be just the thing that makes all the difference.

Need Help?

If your nonprofit is facing challenges, we can help. Contact The Vella Group at info@vellaspg.com for more information.