As I See It: Funding Losses? Short - and Long-Term Strategies to Build Organizational Capacity
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It’s a tough time for non-profits right now, from hospitals to schools to museums and homeless shelters, funding losses during the first half of 2025 are real. A survey conducted by North Texas Community Foundation, Communities Foundation of Texas and The Dallas Foundation recently revealed that North Texas nonprofits have already lost an estimated $127 million. It’s hard to predict what your nonprofit can achieve in the face of so many uncertainties. Yet there are things you can do to help bridge the gap when funding is reduced or lost, to prepare your organization for short- and longer-term solutions, and to diversify revenue sources. Unlike the messaging nonprofits needed to communicate during the pandemic, today’s funding issues point to communicating your need to build organizational capacity to weather economic challenges at any time.
Building organizational capacity means funding the things that bring your organization revenue to run the operations that serve your mission. It means raising more than a year or two of operational funding with a scant reserve. It also means being critical of your own strategies and ensuring you have the funding to fully launch and sustain your programs. Long-term, this means a commitment to investing in your endowment. The nonprofit mindset of scarcity will not sustain your important work.
When times are uncertain, first recognize and celebrate your belief that your donors DO want to support your mission. During times of broader public division or uncertainty, some donors will hesitate or reduce giving, while others will lean in to give more. Recognize that organizational funding losses may not motivate giving immediately. Savvy donors will want to understand how federal funding was being used and which aspects of the organization’s programming are at risk.
Preparation
There is time to prepare and find the most direct routes to funding for the short - and long-term. Here’s a list to get you started:
Analyze funding streams with an eye toward opportunities, including earned revenue, individual, foundation, corporate or organizational giving and government grants.
Review and update your organizational case for support by aligning it with your strategic plan, which is future-focused with impact evidence and success indicators.
List ALL of your operational funding needs, ideally for the next three years. Most fund development plans either focus on an annual amount to raise or unfunded items needing support, which perpetuates resetting the fundraising clock annually. Building capacity starts with understanding all expense requirements over time and seeking revenue to support them.
Create giving opportunities for funders and individuals that can be funded or pledged over time to build capacity. They can include capital needs, but the focus of this exercise is to gain momentum for operational funding now and longer-term for building an endowment.
Short - and Longer-Term Strategies
To help nonprofits focus with intentionality on sources of funding, consider where short-term funding may likely be found. Building strategies for these funding sources may be a better use of your resources. Look for opportunities to increase membership levels and carefully tweak fee-for-service if your expenses have increased significantly. Tapping into reserves and securing interim financing may be the most effective way to stabilize operations for now. State and local governments may be granting more to nonprofits affected by federal cuts.
Foundations and funders are uniting to help the affected organizations they care most about. For individual giving, your insider groups should be asked to step up now and model giving for your major donors to follow. Don’t forget middle-level donors who are among the most loyal in the nonprofit base and are often overlooked.
However, leave some time to focus on the sources of funding that may take more time and more investment at first, but will build a pipeline of funding for years to come. Receiving revenue from an endowment takes planning and time. Continue to cultivate relationships with donors with an interest in planned giving as a long-term strategy. Equally keep new/entry level strategies in place, but recognize that these gifts will not likely bridge the gap right away. Organizations and companies may also be helpful in the short term if their grant timelines align with yours; however, starting conversations in the short term with foundations and funders may be more lucrative.
Infrastructure
Remember that everyone in your organization can advance its culture of philanthropy. Alignment and training across all departments, including leadership, development and program staff, is critical. Equally important is investing in your fundraising team to reach more donors. If you haven’t already, advance your board and volunteers into fundraising as an extension of your staff. You are all in this together, and there’s no time better than now to drive that home.
Need help creating your nonprofit's and long-term fundraising plan? Contact us today. As your partner in philanthropy, M. Gale is here to help you create a sustainable plan to serve as your nonprofit’s anchor during these uncertain times.
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As CEO and Founder of M. Gale, Missy Gale has dedicated almost three decades to crafting unique strategies and solutions to complex fundraising projects and organizational issues, resulting in transformational fundraising success for her clients. With more than 15 years at the helm of M. Gale, Missy has assisted nonprofits in North Texas and the Southwest in the areas of healthcare, arts and culture, human services, and education. She has been honored as the Outstanding Professional Fundraiser by the Association of Fundraising Professionals Fort Worth Metro chapter and named A Great Woman of Texas by the Fort Worth Business Press. Dedicated both professionally and as a volunteer, Missy is currently serving as a board member of the Giving USA Foundation, and as a committee member for the Santa Fe Farmer’s Market Institute.
