About a third of American nonprofits received federal funding via grants in 2022 and 2023. However, in the current climate, threats to federal nonprofit grants and cuts to public institutions like the Corporation for Public Broadcasting are major concerns. The roughly 100,000 nonprofits that previously relied on government grants must be prepared for potential funding loss, if they haven’t been affected already.
While significant changes like this can feel destabilizing, the good news is that it’s never too late to tap into other revenue streams to supplement the loss of grant income. We’ll cover why establishing additional funding sources is vital for financial health, a few ideas to begin with, and overall best practices for long-term financial sustainability.
Building out a diversified funding strategy means developing multiple income sources for your nonprofit. This way, if one or more revenue streams become unavailable or decrease (like the 21% of nonprofits who reported a decrease in government funding in the first six months of 2025), other sources of funding can help to fill in the gaps.
Additionally, Infinite Giving explains that a diversified funding strategy can enable your organization on the path to stability:
While some revenue streams may feel more accessible than others, all of the channels below can help you improve your nonprofit’s financial health in the long run.
Ensure you’ve got the right team members in the room when you evaluate these income sources, including your CFO, board members, executive team, and financial experts.
When you hear “non-cash donations,” you may think of in-kind gifts of goods or services. These are great complements to your fundraising strategy, but they typically won’t make up for lost grant funding. Non-cash assets, however, are often large monetary gifts that can be converted immediately to cash for your nonprofit.
Here are a few key non-cash donations to tap into:
For any non-cash donations, establish policies for acceptance so your team and stakeholders are aware of the procedures. Then, communicate that you accept these types of gifts to your supporters. Consider launching a targeted marketing campaign or including it in your nonprofit’s annual report. You don’t want to miss out on a valuable gift of stock just because no one knows that your nonprofit is ready to accept them.
Corporate social responsibility, or CSR, has become a major priority for many businesses. Through programs the business might already have in place or tailored initiatives your nonprofit and the corporate team create together, partnering with a business can not only serve as an additional revenue channel, but it can also increase community engagement.
A few popular corporate funding opportunities are:
Double-check your current supporter base to make sure you’re not missing out on any potential donations. Sometimes donors aren’t aware their company will match donations, so it’s worth promoting and consistently communicating this option.
This option may not be appropriate for all nonprofits, as charging fees for your operations may be in conflict with your mission. However, in that case, selling branded merchandise, like t-shirts or hats, can be another revenue stream. It can also boost awareness and engagement in your mission at the same time.
Another revenue channel to explore is investment income. With a professional advisor and a sound investment policy, your nonprofit can has the opportunity to manage its cash more strategically and pave the way for greater financial sustainability. Specifically, consider keeping your reserve funds in low-risk, highly liquid holdings like Treasury bills or money market accounts to give them the potential to grow long-term.
Cash contributions likely already provide a steady income for your nonprofit, but don’t breeze past this category when evaluating your revenue sources. There’s always room for improvement.
Ensure your donor information is up to date, and leverage insights gained from analyzing donor data to create segmented datasets and personalize outreach. Revisit your donor data frequently to stay on top of changes and ensure you’re using it to the fullest potential for fundraising.
Another option is supercharging fundraising efforts with a new kind of event. Particularly if your nonprofit needs an influx of cash quickly, organizing a new event can alert your supporters to the need and reengage them in your mission. Events have the potential to spin out of control budget-wise, but tapping into corporate sponsorships and sticking to a budget will help you stay on track.
No matter what unfolds with federal funding, your nonprofit will be better prepared to weather the storm with a diversified income. Taking the steps today to cultivate different revenue channels can support your organization to navigate any funding needs.
*DISCLOSURE
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