Budget Breakthroughs: Nonprofit Strategies for Resolving a Funding Crisis

What’s going on?
When faced with a funding crisis, you might panic, or ignore it. You might blame others, yourself, or the economy. You might throw yourself into organizing a big event or apply for every grant possible. Or, if you are like the wonderful folks who attended the Budget Breakthroughs Learning Community for Tides’ fiscally-sponsored projects, you might:

-Renegotiate the terms of a grant with funders
-Negotiate with vendors to cut costs
-Diversify your funding base and the pool of people (staff, board, volunteers, etc.) involved in fundraising
-Build your leadership capacity to develop relationships with funders

Money’s too tight to mention
At the Budget Breakthroughs conversation, we heard stories of conventional ways to deal with a funding reduction: fundraising events, donation drives, and cutting non-essential programs.  But we also heard some ideas that were less conventional: one project in Alaska sold salmon to raise funds while another in the Bay Area negotiated the acquisition of another project and its grants. One Project Director was inspired by his Aunt ringing her cable company to negotiate for lower costs, did the same with his project’s vendors, and found that it worked!

As ever with these complex issues, there are more questions than answers and people spoke about the uncertainties, as well as about what had worked well. One of the most critical questions was raised was, Whose responsibility is it to fundraise? The Project Director, the Board, the staff, a consultant? Some, or all of these? Some projects arranged fundraising training for their Advisory Boards, another included fundraising responsibililties in the job descriptions of project staff.

Another major question was, Should we be “out” about our funding crisis?  The advice was “yes”. And, “no”. Yes, because if your supporters (past and potential) don’t know what’s going on, they can’t help. Yes, because the funder may be amenable to renegotiating the terms of a grant. One project talked to funders, using a ‘Return on Investment’ argument, essentially saying “you’ve invested in our project for x years, you know we do good work – fund us during this difficult time and you can trust that we’ll deliver.”  On the flipside, others cautioned that word could get out that may damage the reputation of your project.  One attendee who had been a funder explained that she was very concerned to be told a project that her organization funded was “in trouble.”  However, when she met with the leadership of the project they reassured her with some solutions as well as their passion for the project and turned around her perceptions.

I can see clearly now
Each project and each funding crisis is different. Therefore we weren’t expecting a blueprint to come out of this discussion. Instead we were looking for, and found in abundance, great stories and examples of action that folks had taken, and advice about what to do and not to do. Advice from projects included:

-”It’s about friendraising, not just about fundraising.”
-“Don’t panic! Create a plan.”
-”Focus on your mission, be brutally honest, and cultivate relationships.”
-”Have a ‘glass half full’ attitude to programmatic work and a ‘glass half empty’ attitude to funding.’”

One project explained how the tough decisions they had had to make during a funding crisis changed the structure of their project and strengthened it going forward and concluded that while “you can’t immunize against a crisis, you can inoculate against one.”

This is all great advice if you are facing a funding crisis!  Further advice and budget breakthroughs resources are available on the Tides website.

Clare Ramsaran is the Technical Training Specialist at Tides

As a Technical Training Specialist, Clare Ramsaran works with Tides’ fiscally sponsored projects nationwide. She develops and delivers technical training on the Tides Salesforce database, creates training videos, and consults on training with other staff. She has been involved with non profits in various capacities; as a staff member, Project Director and Board Member. Her focus was initially on Human Rights Education before moving into the area of technology and training. She is a published writer and holds a BA in Development Studies (similar to International Relations) from the University of East Anglia and an MA in Education (Instructional Technologies) from San Francisco State University.

Photo via Flickr user 401K, used under Creative Commons license.