The federal funding freeze is lifted for now, but there’s still a lot of uncertainty. Nonprofits face delays, disruptions, and financial risks.
As difficult as this situation is, it’s also a wake up call—relying on one funding source is risky.
More than 90% of U.S. nonprofits depend on one funding source, like government grants or corporate donations. Even with multiple revenue streams, they can still be vulnerable when funding shifts.
We’re not saying to abandon your main funding source—it’s helped you grow. But adding another revenue stream can help protect your mission from sudden changes.
For example:
The takeaway? Don’t wait for a funding crisis to act.
Have Nonprofits Faced Funding Cuts Before?
If enacted, potential upcoming cuts could be deeper than ever, but funding can shift with any administration:
- 2013: Budget cuts, known as "sequestration," reduced funding for education, healthcare, and social services.
- 1996: The National Endowment for the Arts (NEA) lost about 40% of its funding.
Every time, nonprofits had to scramble to stay afloat. With multiple revenue sources, you're better equipped to navigate potential funding cuts and unexpected shifts.
6 Secondary Funding Sources to Explore
Here are a few options to consider to get at least two sources of revenue:
- Corporate Gifts: Find corporations that have values aligned with yours.
- Best for: Nonprofits like food banks, animal shelters, or environmental groups.
- Philanthropy: Large gifts from individuals or foundations (usually $10,000+).
- Best for: Organizations with long-term goals and big projects.
- Individual Giving: Grow a community of supporters to directly support you (and do it 100% free with Zeffy!).
- Best for: Community-based nonprofits with a strong local presence.
- Investment Income: Earnings from endowments or legal settlements.
- Best for: Large nonprofits with established funds looking for steady income.
- Government Funding: Federal, state, or local grants—try to diversify!
- Best for: Nonprofits providing essential services like education, healthcare, and social work.
- Earned Revenue: Try to find revenue aligned with your mission. Carbon credits are a great example for nonprofits in environmental protection.
- Best for: Nonprofits offering services like training programs or healthcare.
How to Strengthen Your Nonprofit’s Finances
Diversifying doesn’t mean you have to completely change your nonprofit overnight. Start small with these steps:
- Launch an Individual Giving Campaign. Set up an online fundraiser or host a donor event. Even small gifts add up.
- Find Corporate Partners. Companies love supporting nonprofits that align with their values. Look for sponsorships or matching gift programs.
- Apply for Foundation Grants. Many private foundations offer grants that could be a perfect fit for your mission.
- Create a Revenue-Generating Program. Offer paid workshops, merchandise, or training sessions related to your cause.
Use the Right Tools—Without the Fees
At Zeffy, we believe nonprofits should keep every dollar they raise. That’s why we offer 100% fee-free fundraising software—so your nonprofit can grow without losing money to transaction or processing fees.
Diversifying your funding isn’t just about making more money. It’s about protecting your mission and growing your impact long-term.
The bottom line? More funding sources = more stability. By expanding your revenue streams and using the right tools, your nonprofit can stay strong—no matter what challenges come your way.
