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Nonprofits of all kinds are experiencing a series of financial hits — or bracing for them. Federal spending cuts have already forced many organizations to trim programs and lay off workers — and with policymakers considering more far-reaching reductions, additional austerity measures may lie ahead. Meanwhile, the growing possibility of a recession could spell trouble for nonprofits that depend on foundations, corporations, and individuals for support. Today’s leaders face the difficult task of appealing for donations at a time of great uncertainty while also planning for a possible increase in demand for their services.
To help organizations navigate this period, Stacy Palmer, CEO of the Chronicle and host of Nonprofits Now: Leading Today, turned to two leaders who can offer suggestions about what to do now — and how to plan for what’s ahead.
Aisha Benson, head of the Nonprofit Finance Fund, offers advice based on nearly three decades working with organizations on a broad range of fiscal matters
Myal Greene leads World Relief, which provides humanitarian aid around the world — and runs refugee resettlement programs in the United States. It relies on aid from the federal government as well as private donors and faced nearly immediate government spending cuts when President Trump took office in January.
Among Benson’s and Greene’s recommendations:
Do a cash flow analysis and prepare for different scenarios. Benson says in addition to those steps, it’s important to understand the full costs of delivering programs and figure out where cutbacks might be possible without sacrificing core operations.
Greene says he started planning 12 to 18 months before the 2024 presidential election and prepared two budgets, predicting what would happen to World Relief’s financing under a Democrat or a Republican victory. While the changes happened faster than he expected, doing all that forecasting allowed the organization to react immediately.
Reach out to grant makers and other donors. World Relief got a fundraising appeal out a day after the White House announced cuts in refugee resettlement programs and then followed up with more specifics about the impact as it learned them. Those appeals helped World Relief raise $10 million in two months, allowing it to make up for immediate shortfalls. Meanwhile, Benson says to be in touch with your grant makers and help them understand how flexible, long-term funding would make a difference.
Advocacy matters. With lawmakers now considering spending cuts, “reach out to your elected officials at the city, state, and federal levels,” says Benson. “Tell them your stories. Use good impact data. What are the economic benefits and contributions of the work you are doing? How are you really helping people through their challenges?”
Get legal advice and watch for misinformation. Understanding what’s a real threat and what’s not is challenging, Benson says. For example, executive orders issued by the White House don’t have the force of law, and many are being challenged in court. And while President Trump has asked the Internal Revenue Service to strip Harvard University of its tax-exempt status, federal law prohibits the president from directing the agency to conduct tax investigations.
The past is not a perfect guide for today’s challenges. Leaders who have been through COVID, the Great Recession, and other national crises may want to rely on approaches that succeeded in those catastrophes, but that’s not enough, says Benson. “This is a unique moment,” she says. “We need to modify that playbook and not make assumptions that what worked then will work now.”
Special event invitation: Join Myal Greene and Aisha Benson’s colleague, Kristine Alvarez, for a free online forum, “Planning Amid Disruption: Navigating Tariffs, Recession Fears, and More” on June 11 at 2 p.m. ET. Sign up now.
For more information from the Chronicle about how to manage organizational finances amid economic challenges, see these resources:
In addition, see the Nonprofit Finance Fund’s collection of financial planning resources. Benson also recommends checking with the Lawyers Committee for Civil Rights Under Law for help understanding legal matters.
And for more leadership insights, turn to our special report, Leadership at the Crossroads.
Nonprofits Now: Leading Today is produced by Emily Haynes and Reasonable Volume, with editorial direction from Margie Fleming Glennon and support from Kyle Johnson.
