If recent months have proven anything, it’s that federal funding can shift in ways nonprofits haven’t experienced before, forcing teams to pivot and prepare for all possible outcomes. Although many rely on government grants, evolving policies have sparked new anxieties around program sustainability and staffing. Here are some practical strategies to cope with the uncertainty of the current funding landscape and bolster individual giving in this competitive fundraising environment.
The lay of the land: federal funding & challenges
Though federal funding has always shifted, many nonprofits that once relied heavily on grants are now pivoting. Some are forced to reduce staff or scale back programs, while others are turning to new partnerships, foundation grants, and other philanthropic avenues to stay afloat. That said, we’ve spoken with many nonprofit leaders who, despite cuts or freezes in federal grants, are finding creative ways to thrive. By exploring individual giving, competitive fundraising tactics, and building operating reserves, nonprofits can weather the storm and emerge more resilient than before.
Uncertainty can be turned into an opportunity for nonprofits to reassess their fundraising strategy and emerge with a stronger, more diversified approach. While it may not seem intuitive, thinking bigger is the key to weathering this climate of uncertainty. Federal support may be in flux, but the nonprofit sector has always been driven by collective impact and innovation. But remember: you don’t have to navigate these changes alone, and sometimes a shake-up can pave the way for fresh momentum.
Why individual giving deserves your attention
It may be time for individual giving to have its “moment” again. Once upon a time, individual giving was the way funding happened, but the focus has slightly changed (for good reason) in the last few generations.
Still, unlike public funding, there’s a level of decentralized flexibility and resilience that comes with it. Additionally, these are people we’re talking about. In fact, Altrata’s most recent Ultra High Net Worth Philanthropy Report found that of the $502.4 billion in individual giving, non-UHNW individuals accounted for $312.6 billion of that share. In the best cases, donors buy into the mission and stay connected through ups and downs. Provided you don’t rely on a single large donor, it is a great way to keep your funding diversified and less reliant on a single source.
Practically, individual donations can be much quicker to secure than federal grants and come with less paperwork than corporate sponsorships. This is where the essential tenets of fundraising come into play: identifying prospects that are most likely to contribute to your cause. That process gets a lot easier when you have strong donor data and relationship-building tools to understand the wealth and networks of your donors.
Bottom line? Whether you’re a seasoned fundraiser or just starting to build a donor base, beefing up your individual giving strategy is a good next move. It’s not just about bringing in more dollars; it’s about creating a sustainable donor network made of real people who care about your mission.
Fundraising in a more competitive environment
While individual contributors are probably the best way to diversify your fundraising streams moving forward, it’s also a reality that more nonprofit fundraising teams will be competing for the same donors.
The good news? A competitive environment doesn’t have to be cutthroat. In fact, it can also spark innovation. Nonprofits that are proactive in connecting with supporters, clearly articulating their mission, and demonstrating tangible outcomes often fare best.
At Altrata, we’ve seen firsthand how targeted prospect research, thoughtful communication, and the strategic use of donor insights can help you overcome the noise. When you can quickly identify high-potential supporters, people who not only have the capacity to give but also share a passion for your cause, your outreach becomes more personalized and effective.
That’s what truly sets organizations apart in a crowded landscape: the ability to connect with prospective donors on a deeper level. When people feel like they’re part of something meaningful, they become champions for your mission, not just one-time contributors. So, rather than viewing competition as a threat, see it as a chance to refine your strategies and double down on building authentic relationships.
It’s not all about fundraising
While fundraising is important, it isn’t the only thing that matters. Implementing other strategies and stabilizing things from within still makes good business sense. Here are some of the strategies we’ve seen work firsthand:
- Build up operating reserves: It might sound old-school, but having a financial cushion makes the bumps a little more comfortable. An operating reserve can be a lifesaver for day-to-day costs during sudden drops in funding without forcing the hastily cutting of key programs. The Nonprofit Operating Reserves Initiative (NORI) Workgroup suggests setting aside a percentage of funds specifically for this purpose. It is up to your organization to decide how much depending on its needs, however the Workgroup recommends setting aside at least enough to cover 3 months of expenses. Even small reserves can mean the difference between scaling back services and keeping them running at full capacity.
- Partner with like-minded organizations: It might be time to find a friend! When federal dollars shrink, collaborations can be a lifeline. Joint or shared proposals and working with organizations that share a similar mission can help create a network. When you get a lot of passionate people together to solve a problem, good things are bound to happen.
- Be transparent: Sure, you want to paint your organization in a good light, but people really connect with a story, and genuine honesty goes a long way. Let people know the obstacles you’re facing, and how their support makes such a massive difference. Real stories about their impact can be a real galvanizing force. And, of course, always balance transparency with equal levels of optimism.
How to stand out by leveraging donor data
At a time when you can’t afford to leave any dollar on the table, the right data can be a game-changer. The reality is that 96% of donors complain that fundraisers don’t know who they are or what they want, which means nonprofits are missing huge opportunities for deeper engagement. Here’s how you can use that data to help:
- Identify high-capacity donors for individual giving: If you’re not sure who has room to give more or to become a long-term donor for your organization, wealth screenings can provide intelligence on each supporter’s capacity and preferences so you can target your outreach where it truly counts.
- Dossiers for donor prospecting: Leveraging detailed dossiers on high-value prospects that include details such as their philanthropic histories, personal interests and professional experiences allow you to start any phone call with confidence and clear talking points.
- Tap existing connections: Finally, mapping your existing relationship networks can empower you to turn a friend-of-a-friend introduction into genuine support. Instead of guessing who might link you to a new donor, leverage the relationships you already have and rapidly expand your network.
Ready to get started? Schedule a demo with Altrata today to learn how your team can unlock all of these insights and more.