Weathering Federal Funding Uncertainty: Proactive Steps for Nonprofit Resilience

It may be an unsettling time if you’re running a nonprofit organization, foundation, or endowment that depends on federal grants and appropriations. Between funding freezes and various lawsuits, the uncertainty of federal funding as a key income source could last for months.

Even if the legal battles get resolved sooner than expected, Congress might approve a budget that includes reductions in funding for certain nonprofits. This may further put a strain on your organization if it’s already trying to manage economic challenges such as inflation and reduced individual donations. However, with thoughtful planning, you can be proactive in sustaining your mission.

Take action

There are steps you can take to help minimize the impact of losing funding and other challenges your organization may be facing. Remaining inactive during times of uncertain federal funding decisions or economic conditions is likely the least successful approach. Most importantly, don’t hesitate to get help from others.

One of the most practical ways to increase support is to engage more deeply with stakeholders in your community and state, including:

1. Gathering your board together to develop a contingency plan — maybe one you used to get through the pandemic — to streamline operational efficiency.
2. Reaching out to new potential partners, as well as current ones, who may be able to help financially or operationally. Think outside the box: Local colleges and universities, startups, influencers, or community and social clubs may be willing to devote resources to your mission.
3. Calling and emailing major donors to express your gratitude, reiterate your commitment to the cause, provide updates on your organization’s impact, and remind them how much you need their support. The more personalized your outreach, the more effective it will likely be.
4. Increasing communications on social media platforms and through email to reach additional donors and other types of supporters, such as volunteers, to let them know the steps you’re taking to continue providing services and, crucially, the gaps you may need to fill if certain funding sources are pulled. People may be more likely to take action if you outline a specific ask.
5. Joining with other organizations that have the same or similar mission to advocate for assistance.

Additionally, rely on a professional financial plan with solid strategies for navigating significant changes to operating income.

Let us help

In difficult times, when actions are out of your control, it’s important to focus on what you can control — particularly your financial decisions. The challenges you’re facing may be long-term. Lean on specialists to help clarify your options amid various scenarios.

At Mercer Advisors, we provide fiduciary support as a registered independent advisor (RIA), plus our Endowment and Foundation Services team includes nonprofit board leaders and directors who have had to make many of the same decisions you may be facing.

We can help you build a comprehensive financial plan and assist with much more, such as:

• Assessing your organization’s financial health
• Reviewing and advising on cash flow projections
• Investing for the long term and minimizing impacts from market volatility
• Adjusting budgets to align with potential funding delays or reductions
• Providing guidance for finding new and diverse funding opportunities
• Collaborating with other nonprofits
• Learning how to enhance digital marketing strategies

Don’t delay in consulting with partners who could make the difference in your short- and long-term plans for sustainability. By taking a multi-pronged approach, you can mitigate the impact of losing federal funding as well as strengthen your organization’s overall resilience and adaptability for the future.

We’re ready to collaborate with you today. Let’s talk.

Mercer Advisors Inc. is a parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.

All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Content, research, tools and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.