How Nonprofits Are Fundraising Amid ‘Scary, Challenging Time’

The Trump administration is fighting to rescind federal funds that have already been promised and vowing to reduce spending going forward, which has nonprofits reeling. Both organizations that receive federal funding and those that don’t are looking to firm up their fundraising to secure their missions.

“It’s a very scary, challenging time,” says Francys Crevier, CEO of the National Council of Urban Indian Health, an organization that helps Native Americans living in urban areas. The group gets 80 percent of its funding from the federal government. Leaders thought it was reliable funding, and now the nonprofit has to pivot to keep the doors open.

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How organizations are changing their fundraising strategies depends on how much they’ve been affected by current federal freezes. Nonprofits that have seen major impacts are appealing to donors at all giving levels for stopgap funding. They’re being mindful to craft appeals that don’t alienate donors or the government — and considering if they need to make long-term changes to their operations to adapt to the cuts. Organizations that don’t receive government funds are trying to help those that do and looking to shore up their own funding streams.

An Emergency Call to Donors

Organizations that do international aid work have been hard hit by federal funding freezes, so many have put out emergency calls to donors.

The International Rescue Committee, an aid organization founded by Albert Einstein and others, took its message of need directly to the public. The group put a full-page advertisement in the New York Times on March 2 asking donors to step up and give so that people don’t die from lack of support.

“One of the goals of that ad was really to raise awareness,” says Matthew Collins-Gibson, IRC’s vice president of philanthropy. “We had quite a good response from many of our donors.” He says the media attention the ad received helped drive attention to the people the organization serves. “The goal is really to focus on the impacts that our clients are facing because of these cuts and suspension of payments.”

Save the Children, a nonprofit that focuses on ensuring children grow up healthy, educated, and safe, gets about 30 percent of its global funding from the U.S. federal government. Because of the federal funding issues, it eliminated 300 of 1,000 U.S. positions through voluntary resignations or layoffs and had to close offices in some countries. In light of this, the organization is asking major donors to help preserve crucial services for children.

“We are getting some early results from donors really increasing their funding, accelerating, and making it more flexible,” says Luciana Bonifacio, chief development officer. “We are seeing some gifts in the six, seven figures coming in. So that’s very good.”

While Save the Children’s major donors have responded with gifts, they’ve also made it clear that these are stopgap donations. “They don’t see themselves backfilling the U.S. government funding,” Bonifacio says. “So they’re also challenging us to think of what the future will look like with U.S. government funding that looks a lot different.”

Save the Children doesn’t have an answer right now, but the organization is in the process of figuring that out, Bonifacio says. “This isn’t something we’re going to take the next three to five years to figure out,” she says. “But this is something we need to figure out. It’s still early stages but in progress.”

The National Council of Urban Indian Health has hired a fundraising firm to help the organization bring in more donations, but leaders recognize it’s hard to set up an individual giving program overnight.

Oleksandr Rupeta for the IRC

“We’re trying to figure out how long we can stay open,” says Crevier, the council’s CEO. “But if we don’t get enough philanthropic funding to anywhere near offset the amount of losses we’re going to have, we do have to consider downsizing staff soon to keep our mission open.”

Pivoting to an individual giving program isn’t easy for organizations that are structured to be supported by federal grants and contracts, says Kelly McLaughlin, CEO of From Scratch Fundraising.

“If diversifying revenue was easy, everybody would have done it by now,” she says. “Individual giving programs take a lot of time, a lot of effort, and it’s going to be a really low yield for a while. My clients who are primarily government funded, who are trying to get into individual giving, they understand this is going to take three to five years to be helpful.”

Crevier is looking for ways to free up cash immediately, including trying to get out of the office lease to save money. She says the organization is afloat now because of a MacKenzie Scott grant it received in December. “It will help us because we have a little bit of money there, but it won’t sustain us moving forward,” Crevier says. She is also talking to other foundations that have previously supported the organization.

“I know that philanthropy cares,” she says. “I just haven’t seen traction yet. When the world is on fire and there’s so many attacks, it’s been a challenging time for them to figure out what emergency to fix first.”

Messaging Matters

As nonprofits appeal to donors after the loss of federal funding, they are thinking through how to craft the ask in a way that shows the impact of the cuts but doesn’t alienate government officials or supporters who approve of the cuts.

Some nonprofits are worried that what they say in the appeals could jeopardize federal funding they still have, says Krista Lamp, senior director of nonprofit communications at GoFundMe, which owns Classy, a nonprofit fundraising platform.

“They’re making those urgent appeals,” she says. “But they’re also trying to balance that storytelling with the fact that they don’t want to alienate any future government funding that they might have.”

A nonprofit that did not want to be named told the Chronicle that part of its strategy was to “be really careful not to speak out too critically” of the administration.

Organizations are also trying not to offend donors, says CJ Orr, CEO of the fundraising consultancy the Orr Group. “Half of this country agrees with what’s happening,” he says. “So you have to change your messaging to now resonate with your donor audience. You have to tweak some things, knowing that some people are very much in favor of what is happening.”

Nonprofits that have diversity, equity, and inclusion programs are also trying to “mitigate their risks,” Orr says, often removing words related to DEI from their website. He says they’re “trying to avoid any of those legal catchwords that will rise up and grab the attention” of people in the administration in charge of funding or organizations that are looking to sue nonprofits over their DEI policies. “They don’t have the legal teams and all that stuff to be able to deal with that,” Orr says.

Bonifacio, of Save the Children, says the organization has focused on explaining the impact of the funding cuts and is doubling down on previous messages that encouraged donors to give unrestricted donations that the organization can deploy where they’re most needed.

Similarly, IRC says it’s been focusing on flexible funding, including asking individual donors and foundations to un-restrict grants and move up any gifts they planned to make later in the year and give them now, says Collins-Gibson.

An Eye on DAFs and Partnerships

Organizations are looking at a variety of strategies to bring in more money. Project Hope, a nonprofit that works internationally to provide health care, is trying to better attract gifts from donor-advised funds to meet its funding challenges.

The organization wouldn’t say how much federal funding it gets exactly but did say that the freezes have hampered its ability to do its work. That’s why the organization is trying to tap into money that’s already been set aside for charity, says Caitlin McCarthy, associate director of leadership and legacy giving.

“As I’m approaching donors, especially those with known donor-advised funds, I’m making sure to remind them that … money sitting in donor-advised funds is not making any impact,” McCarthy says. She notes most donors say they want to make an impact, so she’s reminding them: “This is the right time in philanthropy. There is a tremendous need, and a lot of lives are at risk.”

McCarthy includes the message that Project Hope accepts DAF gifts in all communications and says she tries to talk to DAF donors about their philanthropic vision and the importance of the needs of the moment.

Nonprofits are also banding together more to help each other, says McLaughlin, the fundraising consultant.

“I’m seeing people looking out for each other in a different way than we have before in the nonprofit space,” she says. “One of the things that I’ve been seeing is nonprofits asking how to do fundraising cooperatively with other nonprofits to activate more resources, to tax the community a little bit less, and also to share expenses on fundraising.”

For example, McLaughlin works with a charity that provides furniture to people in need. The group doesn’t get federal funds but partners with housing organizations that rely heavily on federal grants. “If these folks can’t serve people, who are you going to give furniture to? There’s a downstream effect,” McLaughlin says. So her client is putting out the word about the support its partners need.

The Dallas-based charity Cars for Kids is also looking for ways to help nonprofits in its area. The organization solicits car donations, auctions the vehicles, and uses the proceeds to help other charities. It doesn’t rely on federal funding, but some of the charities to which it donates do. So Cars for Kids has offered its grant writer to a school it supports in hopes that the school will win additional funding, and it’s offering auction services to other charities.

“We’re going to nonprofits and saying, ‘Hey, if you want to advertise that you’ll take a car, we’ll sell it for you, and you can have the proceeds,’” CEO Cheryl Sutterfield-Jones says. “We would obviously charge them a fee, but the fee helps us and they get the proceeds.”

Sutterfield-Jones thinks the grant-seeking environment will become even more competitive, so she’s looking at ways to diversify revenue. “I have a large piece of property with buildings on it,” she says. “I’m looking at how can I bring revenue in by possibly leasing facilities, looking at sponsorships, looking at selling ad space.”

Save the Children is also working with other nonprofits. Bonifacio is in a group of chief development officers, and they realized they have some of the same big donors and have joined forces in approaching them.

“We have some donors for whom we are approaching them jointly,” she says. “It’s usually at the CEO level, but they are going and speaking to them about what we need and asking that they not necessarily support one of us but rather they think about all of us. I think that’s running very well. It’s not for everybody. I’m really proud that we’re doing that. I think that’s the right message.”

Organizations are also trying to build ties among their donors because when donors feel a sense of community, they become more supportive of the organization, says Collins-Gibson at IRC.

“This is the moment when I think people are feeling the weight of this and can feel somewhat confused or isolated,” he says. “We have done a number of briefings, in-person events, online events, really trying to build that community. That’s appealing for our supporters as they look to make sense of this and how can they still have an impact in this somewhat chaotic moment.”