The need to diversify nonprofit funding streams is not a new topic, but it has become even more urgent given the massive changes threatening to affect funding for nonprofits across the U.S. While the President’s recent funding freeze, which impacted nonprofit’s large and small, was rescinded, we are still hearing of cases where organizations are unable to access congressionally approved funds.
If you are heavily reliant on one or two sources of funding, here are a few resources and tools to help you think through your initial diversification strategy.
Evaluate and Strengthen Your Nonprofit Funding Streams
The first step in the process is obvious, but important. Take stock in your nonprofit’s current funding mix. How much of your money comes from individual donors versus foundations, corporate partners, government grants, etc.? Do you have program revenue or earned income streams? Ask yourself which of these streams are reliable versus which are not? Which funds are restricted versus unrestricted?
The right funding mix varies from nonprofit to nonprofit. And, while you don’t need to spread your organization too thin by trying to tap every funding stream available, you also don’t want to become over-reliant on just one or two. Get a clear picture of your current funding and then identify areas for potential expansion and growth.
Understand Trends in Nonprofit Funding
Once you understand where your current dollars are coming from, you can begin to think about how you might diversify your revenue. You should also follow nonprofit funding trends and aim to understand what impacts your funders’ giving decisions. This can also help you plan for potential setbacks.
To dig into this topic more, read When it Comes to Understanding Donors, Does Size Matter Most? Recent research conducted by Candid, GivingTuesday, and Network for Good, suggests:
- Regardless of whether the donor is an individual or an institution, donor size is a significant factor in understanding donor behavior
- Large donors – individuals and institutions – account for a large percentage of total charitable dollars, but have different giving priorities. Both groups are more likely to give when economic conditions are favorable
- Large individual donors and small institutional donors tend to behave similarly
“The interplay between donor size, donor type, and donor motivations suggests that nonprofits need a wide range of engagement strategies and approaches—and this may seem daunting. However, our findings also suggest possible fundraising strategies. For example, during economic downturns, nonprofits may want to prioritize reaching out to smaller donors, whose giving tends to be less affected by economic turmoil. The reality that large donors are most affected by the economy means that the best time to reach out to them is during economic upturns.”
Among their many reports, The Lily School of Family Philanthropy also recently put out Giving During Times of Uncertainty, which analyzed giving trends before, during and after the COVID pandemic as well as The Next Generation of Philanthropy, offering insights into the giving patterns of Millennials and Generation Z.
Other resources to look at to understand giving trends:
CECP Giving in Numbers, which benchmarks corporate social investments
Giving USA ($69.95)
Johnson Center 2025 Trends in Philanthropy, which provides general trends in philanthropy
Expand Your Nonprofit Funding Network
Relationship mapping is a useful tool to help nonprofits identify funders already in their ecosystem.
The goal with relationship mapping is to draw out everyone’s relationships, including members of staff as well as the board. Then it’s to develop plans for strengthening connections with potential funders. Brainstormed contacts aren’t necessarily those who will be asked for gifts right away, rather they should be added to your nonprofit’s cultivation efforts.
In order to build your relationship map, ask questions like:
- Where do you work now? Where have you worked in the past?
- Does your company have a giving policy?
- Are you aware of any corporate or family foundations that might be interested in our work?
- Where did you go to school?
- What professional associations do you belong to?
- What clubs do you belong to? (social, civic, etc)
- Are you active with your church, synagogue or other place of worship?
Encourage folks to review their calendar history, LinkedIn and other social media connections. Build a list of all known contacts to your organization, identify overlap and create a plan for how you will engage these individuals.
Find New Nonprofit Funding Opportunities
There are also free and paid tools to help you identify tools outside your network such as:
Foundation Directory (owned by Candid), which is free through many local libraries or has subscriptions starting at $37/month. Candid also has its Philanthropy News Digest, where you can search published grant announcements.
There are other paid options that run a bit more than Foundation Directory, such as GrantStation and Instrumentl.
Make Your Nonprofit Fundraising Ready
While identifying potential donors is step one, fundraising is built on relationships and cultivation is an important part of the overall process. Aim to introduce donors to your mission over time through a series of strategic touch points. To help you:
Develop your case for support
A case for support (sometimes called a case statement or donor prospectus) is simply a piece of communication collateral that helps prospective donors understand why they should give money to your organization. A case for support can focus on a specific fundraising goal – like a capital campaign to fund a new facility, for example – or it can simply encourage donors to give unrestricted funds to your organization to support all of its activities and initiatives.
Learn more in our article, How to Create a Case for Support For Your Nonprofit
After cultivating donors, as you approach making the funding ask:
Create a template presentation for donors
Using your case for support as the basis, develop a template slide deck to walk donors through what your organization does, why it’s important, the impact you will have and why you need more funding. Once you have a template presentation, you can customize it for each individual donor meeting.
Develop a customizable proposal template
Create a template that provides an overview of your organization, your programs and your current and potential impact that you can easily pull from to create custom proposals for funders.
Achieve Nonprofit Funding Stability
Diversifying your nonprofit funding isn’t just about financial stability—it’s about resilience in the face of uncertainty. A strong and diverse nonprofit funding strategy can help your organization reduce risk and ensure long-term success. By evaluating your current revenue streams, understanding broader funding trends, and strategically expanding your network, your organization can reduce risk and build a more sustainable future. Relationship mapping and research tools can help identify new funding opportunities, while a strong case for support ensures that your nonprofit is prepared to make compelling asks when the time is right.
Fundraising success doesn’t happen overnight, but with a proactive approach and a diversified strategy, your nonprofit will be better positioned to navigate challenges and seize new opportunities. Start today by assessing where you are, exploring new possibilities, and strengthening connections that can sustain your mission for the long term.
