Understanding trends impacting nonprofit organizations' budgets
Abstract
With funding sources shrinking in a sluggish economy, programs need to be prepared to augment fundraising initiatives. This effective practice describes some of the trends that are contributing to fundraising challenges for nonprofits, and offers ways for programs to benefit from these trends. Excerpted from materials developed by Campaign Consultation, Inc., for the ASK to Sustain Institute held in San Diego, California, October, 2003.Issue
Shrinking funds for nonprofits in a struggling and competitive economy call for entrepreneurial thinking and innovative approaches to fundraising.Action
According to Campaign Consultation, Inc., the following trends impact the survival of nonprofit organizations:- National Security. More government funds are being re-allocated to defense and anti-terrorist activities. The September 11 events prompted some organizations to postpone their fundraising activities or to change the beneficiaries. Programs could benefit from this trend by finding creative ways to link their programs to national security. One example might be programs that build stronger, more inclusive communities that can help strengthen national security.
- General Reductions in Government Spending. Over the past two decades, the U.S. government has reduced domestic spending for human services substantially. As a result, nonprofits that relied primarily on government funds now compete more fiercely with other nonprofits for this money. Programs should seek to diversify funding sources and secure non-federal dollars.
- Business Mergers and Acquisitions. The trend in corporate mergers has eliminated millions of dollars in grant money. As new conglomerates come into existence, they can completely change a former company's grant funding and application process, as well as the process for allocating in-kind donations. Mergers and acquisitions may also provide opportunities to expand the pool of stakeholders and eventually access larger sums of money.
- Accountability. As funds diminish and competition increases, funders are scrutinizing programs more closely. Funders want stable, well-managed and trustworthy organizations that generate clearly defined and measurable impacts. Smart organizations view this trend as an opportunity to improve their operations systems and program evaluation methods.
- Compassion Fatigue and Increased Competition for Donors. Due to mass technology, people can review tragedies locally and around the world in real time. Viewers are often inundated and overwhelmed with human suffering to the point of saturation. Also, the most urgent and immediate crisis tends to be viewed as the most deserving. Organizations that find uplifting approaches, share success stories or link their programs in a meaningful way to local or national events will stand out from the rest of the competition, maintain stakeholder interest and develop new sources of interest.
- Changing Demographics. Changing demographics provide threats and opportunities. Agencies that assume their same donors and funding streams will always be there may be for an unhappy surprise. Organizations that are more flexible, proactive and market-oriented will welcome changing demographics as an opportunity to expand their stakeholder base.
Context
Campaign Consultation, Inc. works with individuals and organizations at local, state, national and international levels to achieve community development, fund raising, diversity utilization, issue advocacy, media and marketing, public policy as well as organizational and business development success.Outcome
Understanding the fundraising climate, and adjusting by being flexible and creative, gives nonprofits the ability to sustain—and even improve—their programs over time.Posted On
November 6, 2003For More Information
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