Nonprofits Are Under Threat (and What We Can Do About It)
A megaphone held in a raised hand
Nonprofits are facing unprecedented threats in this volatile political and financial moment. There is a lot to be scared about and we should take it seriously, but there are also things we can do to stay resilient and continue to thrive. Here are some thoughts about the problems we are facing and some solutions to consider:
THE FORECAST IS BLEAK
There is no replacement for the federal money that has been siphoned away, and it will take a generation to undo the damage that has been done. Even organizations that don’t rely on federal funds are feeling the pain because it has destabilized the funding model for the whole sector.
Small nonprofits without reservoirs of unrestricted funds or large endowments are going to fail.
Talent that previously looked to build their careers in the public sector or in mission-driven organizations are going to abandon these fields for more stable career prospects elsewhere.
The people and causes that rely on nonprofits are going to suffer, and we will all feel the consequences of that economically, politically, and morally for many years to come.
THE REMEDY IS NOT UNATTAINABLE
The nonprofits that creatively and swiftly devise ways to narrow their missions and expand their funding sources are the ones that will survive. More investment in earned revenue streams that generate unrestricted dollars and over which organizations can have more control will be essential.
The sector needs to contract and consolidate. There are too many organizations working on too many overlapping missions, and the resources, operating support, and systems needed to sustain them are too expensive to sustain individually in perpetuity. Like the private sector during a recession, nonprofits need to start thinking about mergers and acquisitions and find ways to share resources, save money, and focus mission impacts.
Big philanthropy needs to change. Start paying for overhead and stop restricting the use of funds. In other words: Core support. Core support. Core support. I’ve written about this before but it is worth repeating.
Invest in storytelling and communications for the sector as a whole, telling the public why they should care about all nonprofits, not just the ones they give to or volunteer for. We are all competing against each other for funds when we should be joining forces against our biggest competitor: apathy.
Maybe none of these ideas will be enough to rebuild the nonprofit sector once this carnage is through, but at least trying to address these systemic challenges will enable some to survive. We must not let business as usual be the cause of our downfall.
