Building Financial Resilience: Funding Strategy for Long-term Organizational Stability

Candace Kohli, PhD
Oct 13
7 min read

2025 has seen seismic shifts in the nonprofit world. Federal funding cuts have rippled across the sector, while political rhetoric has turned nonprofits—especially those focused on equity, inclusion, and social justice—into lightning rods for criticism.

An October 6th Urban Institute report analyzing survey data from its "2025 Nonprofit Trends and Impacts Study" found that more than a third of nonprofits reported disruptions in federal, state, or local government funding. Organizations with documented funding disruptions were twice as likely to decrease their staff (29%) and programs (24%) than the sector as a whole.

The study also found that federal shifts have altered the philanthropic funding landscape sector-wide. Even organizations that do not receive government funding saw significant funding shifts that translated into fundraising challenges. Despite this funding contraction, nearly two-thirds of organizations reported increased demand for their services.

View the Report

These shifts pose an existential threat to many nonprofits, but they also present an opportunity to review and revise your organization’s funding strategy – one that balances stability with innovation and diversifies grant funding with other revenue streams.

The Case for a Balanced Funding Portfolio

Analyzing Form 990 data, Candid found in a February 2025 report that 30% of U.S. nonprofits receive government grants. Of these, a third of grantees rely on government grants for more than 50% of their revenue. A 2024 study from BryteBridge, “Growing Pains: Overcoming the Challenges that Keep Nonprofits from Achieving Sustainability and Growth,” found that government and foundation grant revenue makes up 22% of overall revenue for nonprofit organizations. 86% of organizations surveyed planned to submit for grant funding, yet the majority of organizations were projected to be awarded only 2-4 grants per year with award amounts ranging from $5,000-$15,000 per award. While grant funds have long been the backbone of nonprofit funding, recent events have shown us that too much dependence on grant funding is a risk to operational and programmatic stability.

Resilience in today’s nonprofit sector comes from revenue diversification.

A balanced financial portfolio draws on multiple streams of income, including grants, individual giving, corporate partnerships, and earned revenue. Each has its own rhythm and demands, but together they increase financial resilience in the face of policy changes and economic downturns that allow organizations to plan confidently for the future.

Pathways to Funding Diversity

If your organization relies too heavily on one revenue stream, consider prioritizing one or more new fundraising approaches as you plan for the year ahead.

Individual Giving

Individual giving remains one of the most reliable sources of nonprofit revenue. BryteBridge found that 54% of nonprofit revenue came from individual giving with charitable giving estimated at $592 billion. The Lilly Family School of Philanthropy at Indiana University estimates a 3.9% inflation-adjusted increase in individual giving in 2025. Whether through a major gifts program, an annual fund, or planned giving, individual donor programs provide nonprofit organizations with a fundraising strategy you can scale.

Donors today are looking for authenticity, transparency, and impact. A strong recurring donor program—anchored in powerful storytelling and consistent stewardship—can provide the steady cash flow that grants alone cannot. To grow an individual giving program, plan intentionally to engage and inspire donors:

Make giving easy - make a donation call-to-action button front and center on your organization’s website and set up automated giving tools that donors can elect into - much like monthly subscriptions to streaming services like Netflix or Spotify.
Use a donor-centric approach - gather information about donors’ motivations, interests, giving capability, and preferences, and align your communication strategies to those preferences.
Personalize communications - segment your donor list based on donor interests or backgrounds to provide organization information, impact stories, and updates on the organization’s work that best resonates with specific donors.
Build relationships - “take the money and run” does not apply to donors. Successful individual giving campaigns are firmly rooted in relationships and stewardship. Send a thank you and regularly express gratitude, share ongoing updates that show donors the impact of their giving and make them feel good, invite them to your events and engage them. Foster a sense of belonging that builds loyalty to your organization and work.
Use technology - from CRMs to social media, think strategically about how you can use technological tools to enhance your engagement with donors and increase their giving opportunities. Tools like social media are free resources to share impact stories that speak directly to your donors. Online platforms can provide user-friendly donation platforms and data you can analyze to better understand your donors’ behaviors and preferences.

Corporate Sponsorships

Corporate giving is also evolving in positive directions for your fundraising strategy. More companies are seeking meaningful partnerships that align with their values and workforce engagement goals. These partnerships often extend beyond donations to include skills-based volunteering, sponsorships, and co-designed initiatives.

While many corporate sponsorship applications appear similar to other grant submission processes, remember that corporations do not necessarily give “out of their goodness of their hearts” (they are, after all, profit-oriented institutions). Rather, corporations are motivated by return on investment. Nonprofits that can articulate the measurable value of their work in social or economic terms will be best positioned to secure corporate partners who want to make a visible difference. Often, this will mean communicating clearly how your work aligns and intersects with the interests of a corporation in question.

Here are a few points where you could think strategically about shared interests:

Think locally - decisionmakers at corporations are going to be most likely to understand and want to address issues facing the communities they live and work within. One strategy, therefore, is to identify corporations and businesses headquartered in your geographic area where employees can engage in volunteer opportunities and where companies want to cultivate their engagement with the community.
Expand audience reach - target corporate partners with overlapping audiences and pitch the partnership based on your ability to increase their reach. A corporate partner will be more interested in your proposal if you serve a common audience or can increase their reach with the audience or demographic relevant to their products. For example, if your organization serves low-income urban or rural populations with elevated reliance on medicaid, insurance companies or medicaid service providers would be well-aligned corporate partners who could be compelled by the way your organization’s services increase their visibility amongst a key audience for their work.
Overlap demographic groups - similarly, if your organization serves a specific demographic group, identify and target corporate sponsors who share some aspect of those demographic markers. For example, if your organization is Black-led and Black-serving, identify organizations keyed into a similar racial identity like the Black McDonald’s Operators Association.
Stay industry-specific - if you work within a specific industry, for example healthcare access or the arts, position yourself for partnership with corporations within your industry. This could include companies who make products you use, such as an instrument manufacturer or a healthcare device company.

Earned Revenue

Earned revenue is income that a nonprofit generates by providing goods or services in exchange for a fee. Unlike grants or other donations that are considered “contributed revenue,” earned income results from business-like activities directly related to an organization’s mission. A strategic mix of earned and contributed revenue can improve an organization’s financial sustainability and resilience by reducing its dependence on any one source of funding. In fact, 23% of funding across the nonprofit sector today comes from earned revenue.

Earned revenue can come from a variety of avenues within an organization, including:

Program or service fees - charging clients for direct services related to your organization’s mission, such as tuition for education programs, tickets for arts performances, or fees for a professional service.
Merchandise sales - selling products your organization makes or redistributes, like artwork or Girl Scout cookies.
Asset optimization - renting out underutilized assets, such as event space at your building, equipment, or intellectual property.
Membership dues - charging members annual dues in exchange for services like special content or activities.
Social enterprises - mission-aligned businesses, like thrift shops, that generate income and address a social issue.

To develop an earned revenue stream, nonprofits follow a similar approach to other businesses, including conducting market research to assess need and competition and developing a business plan that outlines project costs, revenue potential, and success metrics.

Revenue diversification doesn’t just protect you from political volatility—it signals to funders, partners, and your community that your organization is proactive, disciplined, and built to last. Having diverse revenue can actually amplify your ability to raise grant funds because, like corporations, most funders want to ensure a strong return on their investment by investing in organizations that can demonstrate financial stability over the long term.

The right portfolio mix should be tailored to your organization’s mission, capacity, and need. What’s important is that your portfolio includes revenue from multiple sources, with a single source or category accounting for no more than 25-30% of your total revenue to reduce financial risk.

To review your organization’s funding portfolio mix, download our “Funding Resilience Framework Worksheet.”

A Strategic Mindset Builds Resilience

Uncertainty has always been part of the nonprofit equation. What’s different now is its intensity and visibility. Federal appropriations are being reevaluated. DEI-related initiatives are being scrutinized or defunded in some states. And many foundations are reconsidering their focus areas in light of political polarization and donor fatigue.

Amid all of this, opportunities remain. Philanthropy is adapting. New corporate partners are emerging. Donors are looking for organizations that exude competence, stability, and courage. Nonprofits that can combine mission clarity with a well-designed funding strategy will not just survive this era—they’ll lead it.

That’s why this is the perfect time to invest in your organization’s strategic readiness. Reviewing your funding portfolio, sharpening your grant writing strategy, and developing contingency plans are not defensive—they’re leadership.

As we move into the last quarter of 2025, our team is offering a Contingency Planning for Nonprofits Workshop designed to help nonprofit leaders navigate this new reality. Early bird registration closes soon, and the workshop begins in December. It’s an opportunity to join colleagues to translate uncertainty into strategy, and strategy into stability.

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The nonprofits that will shape the future are not those who panic in political storms, but those who plan through them—with vision, balance, and confidence.