Non-Profits: Pivoting from Government to Foundation Funding

At a glance

• The main takeaway: Many nonprofit organizations face financial uncertainty in the wake of recent federal funding freezes, leaving some searching for alternative revenue sources.
• Impact on your business: Seeking foundation support can be a helpful alternative to government funding, given the wide variety of foundations, with varying priorities, there is likely one that caters to your organizations mission.
• Next steps: Consider leveraging the knowledge and support of Aprio’s Government Contracting and Nonprofit teams to determine the best way forward for your organization.

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The full story:

A federal funding freeze set forth by President Trump’s Executive Order: Reevaluating and Realigning United States Foreign Aid has left many nonprofits and NGOs in a financial lurch, wondering how to shore up funds they rely on for program administration, delivery of services, staff salaries. Many nonprofits are facing paused or canceled grants and contracts, leading them to examine and pursue alternate sources of funding, including funding from foundations.

In the United States, foundations can be private, such as family or corporate foundations, or public, such as community foundations. According to some estimates, there are over 90,000 foundations in the U.S. Foundations’ funding priorities vary, from youth development to animal welfare to low-income housing support.

Finding the right fit

Given the wide range of funding priorities across so many foundations, it can be overwhelming to identify new funders ready to support your cause. Fortunately, online databases like GrantStation and Candid can provide information about a host of grantmakers: their funding priorities, geographic locations, and processes for applying. 

While you may be tempted to cast a wide net, foundation managers and their boards sift through countless letters of intent (LOI) and applications and are generally accustomed to weeding out anything that doesn’t match their funding priorities and interests. Focus on building relationships with a few grantmakers that best mirror your organization’s mission and vision.

Writing the grant

Some letters of intent and grant applications have simple instructions and few requirements; others are much more detailed and ask for a significant amount of data. Gather and organize information about your nonprofit and codify at least a handful of meaningful stories about your organization’s impact. Move through each section of the application methodically. Answer each question thoroughly, but remember that reviewers don’t want extraneous details. Many online applications have character limits, which can be helpful in keeping responses targeted.

Some details to have on-hand while preparing your letter of intent or application include the following:

• Your nonprofit’s mission and vision, board members’ names and locations and places of work, and basic contact information.
• Program data: how many people (or animals, etc.) have been served in the history of the organization? How many within the past year? What is the current waitlist? How many do you anticipate serving in the coming year?
• Verifiable, specific, and quantitative statistics revealing the impact of your services. If you haven’t been tracking program impact, start immediately, as funders want to see the results of your work.  
• Letters of support from people who have been helped by your organization, newspaper articles outlining your efforts and successes, and other media. While not often required, these artifacts demonstrate that your nonprofit enjoys wider support from the community, and funders want to support proven organizations with reliable track records.

If grant writing and maintenance is not feasible for you or your staff, consider outsourcing. Many reputable grant writers leverage their own nonprofit experience to deliver a strong application, and this can be money well spent.

Review current federal funding

The goal here is to make it easy to keep (or re-win) federal funding. It is important to assess any current or recent federal grants or contracts your nonprofit has been awarded to ensure requirements have not be changed, by recent government orders. Review existing grant or contract language to ensure your organization complies with every reporting requirement. Comb through your policies and programs and make any necessary changes. (Of course, follow your organization’s established guidelines for updating policies and procedures – board approval is typically required.)

Other considerations

While seeking support from foundations can be a winning strategy, broader diversification of funding sources is the key to longevity. If your organization isn’t already holding annual or quarterly fundraising events such as themed auctions or virtual campaigns, it may be worth exploring these avenues. Crowdfunding through Kickstarter or GoFundMe can also generate valuable contributions and spread the word about your organization’s mission and successes. Peer-to-peer fundraising goes hand-in-hand with these strategies, as folks who are already involved with your cause challenge their own networks to support your work; current and past volunteers, board members, and even recipients of services can be pivotal cheerleaders. Finally, targeted, goal-driven emergency capital campaigns can help nonprofits raise the funds they need to keep services flowing.

With any of these strategies, delivering a clear message will help you connect with potential funders. Tell your organization’s story in a concise, compelling way; make it easy for potential funders to see the impact of their dollars.

However your organization chooses to navigate the financial uncertainty, be sure you’re using your dollars wisely. Engaging an accounting firm experienced in nonprofit priorities can help you achieve and maintain financial transparency, comply with regulations, and optimize resource allocation. Each of these areas is important to potential funders, and an experienced accounting professional can help strengthen your operations.

The bottom line

Establishing and maintaining a solid financial base, even amidst uncertainty, requires dedication and creativity, two qualities most nonprofits have in spades. If your organization has been impacted by federal funding cuts, help is available. Aprio’s Government Contracting and Nonprofit teams are dedicated to helping organizations reduce expenses and find the most appropriate solutions, tailored to their needs and priorities.

Related Resources/Assets/Aprio.com articles/pages

• Temporary Restraining Order Halting USAID Mass Terminations is Lifted
• Resources for Displaced Federal Workers
• Financial Action Plans for Nonprofits Impacted by Federal Funding Freeze