A Storm on the Horizon: Leading Your Nonprofit Through Financial Uncertainty

A storm is on the horizon. Policy changes loom–and with them public funding for many nonprofits will evaporate overnight. Economists are predicting challenging times ahead–credit card debt and defaults of all types are on the rise. It seems like the post-pandemic bubble may finally burst.

2025 is coming: ready or not.

If you are an environmental organization afraid about what is coming next this is for you. If you serve refugees and other immigrants, this is for you. Or you are a food bank and afraid that your public funding will dry up just as benefits for those you serve dry up–this is for you.

Our goal is not to be political–it is to help you be prepared.

These dark clouds on the horizon do not have to define you–although they will shape you!

The belief that fundraising dollars will inevitably decrease during tough times is one of the most dangerous myths in the nonprofit sector.

I get it. The weight of responsibility feels crushing. Your team looks to you for answers. Your board wants assurance. Your donors need confidence. And most importantly, the people you serve can't afford for you to get this wrong.

But here's the truth: What you do right now matters most.

YOU CANNOT JUST SIT BACK AND WAIT FOR IT TO HAPPEN. You can not let your institution's historic knowledge and know-how dissolve with poorly thought-through layoffs. You cannot let this hard season (and it is really hard), lead to a lack of service in your area for decades or generations to come. In short–you cannot give up the fight!

Imagine if donors only opened their wallets based on policy headlines, economic indicators, or market fluctuations. Our missions would constantly be at the mercy of forces beyond our control. The reality is far different - and far more hopeful.

I know because I've been where you are. In 2016, I led fundraising for a global humanitarian organization. Half of our work was with refugees and other vulnerable immigrants in the U.S.

After that year's presidential election public funding dried up overnight. I could not just sit back and let destruction come to an organization I cared deeply about. So we got to work. We grew private fundraising from $15M per year to $40M per year! Now to be fair it was not easy. And it did not make up for the precipitous decline in public funding. It got us where we needed to be to continue into the future!

It also wasn't luck or exceptional circumstances (there was no MaKenzie Scott money to bail us out!). It was about understanding three crucial things:

• How to read the real signals that matter
• Where to focus your energy
• What actions drive results

The challenges ahead are real. Let's be clear. If you depend on large sources of government funding to operate, you will face massive challenges. These challenges are not insurmountable. Leaders who approach them strategically, present unexpected opportunities for growth.

Consider this:

• Organizations that maintain strategic focus during downturns grow faster
• Donors actually increase giving to causes they care about during uncertain times
• Teams that face challenges head-on emerge stronger
• Clear communication during tough times builds lasting trust

But here's the hard truth: What worked in the past won't work now.

The old playbook of across-the-board cuts, waiting it out, or hoping for the best will leave you vulnerable. You need a different approach.

In this guide, I'm sharing everything I have learned and that we used to achieve growth during uncertainty. I have used this to help dozens of small and mid-sized organizations implement successful growth strategies. You'll get:

• Perspectives that will shape your thinking
• Clear action steps you can take immediately
• Metrics that actually matter right now
• Real examples of success

This isn't theoretical. These are battle-tested strategies that have worked in real organizations facing real challenges. And they can work for you too.

The storm is coming. With the right preparation, you won't just survive it - you'll emerge stronger. 

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Clear Data on Previous Policy Impact

We've seen this before. During previous policy shifts:

• Organizations dependent on government funding lost 40-60% of their funding within 6 months
• Small and mid-sized nonprofits were hit hardest
• Those who waited to act lost both funding and key staff members (due to layoffs and staff leaving to find stability)
• Organizations that pivoted early maintained stability

Here's what's interesting: The organizations that thrived didn't just replace government funding with private dollars. They completely reimagined their funding model.

Common Misconceptions About Nonprofit Funding

Let's bust some dangerous myths:

"We should cut expenses immediately." Wrong. Strategic cuts matter–and doing them quickly matter. Across-the-board cuts often damage your ability to raise private funds.

"We need to save our way to stability." False. You can't save your way to growth. Organizations that thrive focus on strategic revenue growth–which ALWAYS requires upfront investment.

"Donors won't give during tough times." Actually, donors often increase giving to causes they care about during uncertainty - if you communicate effectively.

"We should wait and see what happens." This is perhaps the most dangerous myth. By the time changes are officially announced, you're already behind.

What Makes This Different

This funding shift is unique for three reasons:

1. Speed: Unlike gradual economic downturns, policy changes can eliminate funding overnight. You won't have months to adjust.
2. Permanence: Economic cycles eventually improve. Policy changes often create permanent shifts in funding landscapes.
3. Scope: These changes won't just affect your organization. They'll impact entire sectors, creating both challenges and opportunities.

The good news? You're reading this now. You have time to prepare. Only if you start today.

Think of it this way: When sailors see storm clouds, they don't wait for the rain. They check their equipment, secure their cargo, and adjust their course. Smart nonprofit leaders do the same.

In the next section, we'll look at exactly how to set your course for the challenges ahead. First, take a hard look at your organization's warning signs. What signals are you seeing? What assumptions need to be challenged? Where do you need to pause, to slow down so that you can speed up.

Remember: The organizations that survive aren't necessarily the strongest - they're the ones most responsive to change.

Set Your Course (Strategic Preparation)

Before the storm hits, you need to prepare. Not with frantic action, but with strategic steps that position you for success.

Immediate Actions to Take

Start by looking at your revenue. All of it. Pull out every funding source and identify which ones depend on government dollars. You need to know what is actually at risk. More importantly, you need to know the true cost of running each program.

Next, map your relationships. This is not the time for wishful thinking. Who are your actual top 25 donors? Not the ones you wish you had - the ones writing checks today. And what is your donor development strategy for them? Which board members really open doors? What funders need more attention? Where are your strongest partnerships? You need to meet with them all. Let them know what is coming. This builds trust and get them ready for what's next.

You need to focus on fundraising strategies that actually work! 

Key Metrics to Track

Success in a storm looks different than success in calm seas. Leaders who thrive in tough times understand this. They shift their metrics before circumstances force them to.

Stop measuring success against last year's numbers. That world is gone. Instead, track forward movement.

You can't wait for your finance team to tell you what's happening–that information will come to you too late! You need to know your numbers cold. Monthly cash flow projections matter more than annual budgets right now. Your pipelines need to be in tip-top shape. Track donor retention and acquisition rates like your future depends on it - because it does. Winning back lapsed donors during this season may be one of your best options for immediate growth!

This article is getting a bit long so read our full took kit on the most important metrics to track.

Success isn't about maintaining everything exactly as it was. It's about emerging stronger, smarter, and more capable of serving your mission.

Remember: Ships in storms don't measure success by maintaining their original course. They measure it by reaching a safe harbor - even if they had to change direction to get there.

Board Conversations to Have Now

Your board needs truth, not comfort. Schedule a special session. Talk about realistic funding scenarios. Discuss which programs can truly sustain themselves. Look for strategic opportunities hiding in the challenge. Be clear about what resources you'll need. Most importantly, understand their risk tolerance. Give them time to process before asking for decisions.

Trim the Sails: Focus on ROI

When storms approach, most nonprofits start cutting across the board. This is a mistake. Smart leaders know that not all expenses - or activities - create equal value.

Think about ROI differently. It's not just about money spent versus money raised. True ROI in nonprofits includes impact created, relationships built, and future opportunities generated. Some activities might look expensive on paper but drive massive long-term value.

Start with data, not assumptions. Look at:

• Cost per dollar raised for each fundraising activity
• Staff time invested versus outcomes generated
• Program costs versus impact metrics
• Hidden costs of "free" activities

Here's what surprises most leaders: Your highest ROI activities often aren't what you think. That expensive fundraising dinner? It might actually cost less per dollar raised than all those "cheap" social media campaigns when you count staff time. That pricey program director? They might be saving you money by preventing costly mistakes.

Keep your best revenue generators. If a major gifts officer brings in 5x their salary, cutting their position to save money is bad math. If a program generates strong outcomes and attracts consistent funding, preserving it might matter more than maintaining cheaper but less effective services.

Cut activities, not just expenses. Look for:

• Meetings that don't drive decisions
• Reports nobody uses
• Events with poor returns
• Processes that waste time

Remember: In storms, sailors don't just reduce sail - they trim them precisely to maintain speed and control. Your job isn't to cut costs. It's to preserve power where it matters most.

As in sailing, leading a nonprofit is a team endeavor. A sea-worthy sailboat has multiple sails. Each needs to be precisely trimmed. The same is true for your team. Here is our full guide on building a high ROI fundraising team.

Get Rid of Dead Weight: Making Hard People Decisions

Let's be brutally honest. The coming storm will reveal your team's true character. Some staff members who seemed fine in easy times will become anchors in rough waters. You cannot afford to keep people who drag down team morale and efficiency.

Watch for these warning signs:

• Constant complaints but no solutions
• Resistance to change when change is critical
• Negative influence on team energy
• Poor performance despite clear expectations
• Inability to adapt to new challenges

You know who they are. They're the ones who:

• Make every meeting longer
• Turn simple tasks into complex problems
• Drain energy from your best performers
• Create drama instead of results
• Always have reasons why change won't work

Here's the truth: Keeping wrong-fit staff hurts everyone. It demoralizes your top performers. It signals that mediocrity is acceptable. It slows down innovation when you need it most.

Don't wait for performance review season. Have direct conversations now. Set clear expectations. Give specific feedback. Create improvement plans if needed. Be ready to make hard decisions quickly.

Remember: Every dollar spent on under-performing staff is a dollar not spent on your mission. Every hour your best people spend managing difficult teammates is an hour not spent growing impact.

In tough times, team alignment matters more than team size. Better to have a smaller team rowing in the same direction than a larger one working against itself.

I never have looked back and said “I should have waited longer to let that person go”. NO! It's always the opposite, “why did I wait so long?!”.

The same principles are true for bringing on new team members. Hire slowly to ensure you bring great new resources to your ship! Need more resources on how to hire a fundraiser–check out our building a fundraising team guide–its all there for you.

Tell Better Stories: Communication That Drives Action

In times of crisis, most nonprofits default to panic-driven messaging. They lead with their financial challenges. They focus on what they're losing. They communicate from a place of fear. This is exactly wrong.

Your donors don't give to save your organization. They give to save lives, change communities, and solve problems. Even in tough times - especially in tough times - your story must focus on impact and opportunity.

Start with what's at stake. Not your funding gap, but what happens to real people if your work stops or shrinks. Share specific stories. Use real numbers. Help donors see the actual humans behind the statistics.

Then shift to opportunity. Show donors how their support now can:

• Preserve critical services
• Help more people in crisis
• Create sustainable solutions
• Drive lasting change

The key is alignment. Match your story to your audience:

Major Donors need:

• Strategic conversations about leverage
• Clear plans for sustainability
• Specific roles they can play
• Evidence of smart leadership

Monthly Donors want:

• Regular impact updates
• Stories of lives changed
• Clear connection to outcomes
• Confidence in stability

Board Members require:

• Honest assessment of challenges
• Strategic options to consider
• Clear calls to action
• Tools to open doors

Your story isn't about survival. It's about impact. Don't tell donors you need money because funding is being cut. Show them how their investment now can transform more lives during a critical time.

Remember: In storms, lighthouses don't tell ships about their maintenance problems. They show the way forward. Be the lighthouse.

Case Study: Growth During Downturn

In 2016, we faced a similar challenge. Government funding for refugee programs was about to vanish. We didn't panic. We got to work.

We started with impact. Real stories. Hard data. We found out what donors actually cared about most. Then we built new systems. We created clear processes for donor development. We improved how we tracked results. We made follow-up a priority, not an afterthought.

Most importantly, we focused on growth. We invested in key relationships when others were cutting back. We expanded programs that worked. We added development staff when it seemed crazy to do so.

The result? Private funding grew from $15M to $40M annually. Not because we worked harder. Because we worked differently. We stopped trying to replace government funding directly. Instead, we built new funding engines that could grow over time.

Your situation might be different. The principle remains: Get clear. Build systems. Focus on growth.

Leading yourself through the storm

Now that we are clear that there is a storm on the horizon, let's get to work. The first thing we need to do is take a breath.

I've watched this play out multiple times, and the organizations that don't just survive but thrive aren't the ones with the biggest reserves - they're the ones with world class leaders who read the signs early and act decisively.

Before we can steer a ship through the storm the captain needs to be centered.

In his book The Pause Principle, Kevin Cashman describes the following:

In times of crisis, the Army War College uses a powerful acronym: VUCA - Volatile, Unpredictable, Complex, and Ambiguous. This perfectly describes what nonprofit leaders face today. The key is: successful leaders flip these forces to their advantage. Although to do that leaders need to pause.

Leaders today face unprecedented demands in an action-packed, constantly connected world. The pressure to keep pace, to always be "on," and to respond instantly is diminishing our leadership capacity exactly when we need it most. This relentless drive for immediate action creates a paradox: our constant motion actually reduces our impact. When we operate at a frantic pace, we lose the ability to think strategically, connect authentically, and create meaningful change.

The power of pause isn't about stopping - it's about stepping back to lead forward. When leaders consciously pause, they open up space for deeper awareness, better questions, and more strategic action. This isn't meditation or mindfulness (though those have their place). It's about creating intentional moments to move from management effectiveness to leadership innovation. Paradoxically, these strategic pauses don't slow us down - they power performance by helping us focus our energy where it matters most, grow ourselves and others, and drive sustainable results. In a world that demands constant action, the ability to pause becomes a crucial leadership advantage.

From Volatility to Vision

When funding changes create volatility, your natural response might be to react to every shift. Stop. Your job isn't to respond to every wave - it's to keep your eye on the horizon. Vision during uncertainty doesn't mean having all the answers. It means providing clear direction when others are lost.

From Unpredictable to Understanding

Yes, the funding landscape is unpredictable. Understanding runs deeper than prediction. Your role is to:

• Listen more than you speak
• Ask better questions
• Seek patterns, not just problems
• Build deeper awareness of your team's capabilities

Understanding helps you respond to change rather than react to it.

From Complexity to Clarity

In times of financial pressure, everything feels complex. Leaders often respond by adding more complexity - more meetings, more reports, more processes. Instead, your job is to:

• Bring clarity to confusion
• Simplify the path forward
• Focus on what matters most
• Help others see through the chaos

Remember: Leaders bring clarity and hope.

From Ambiguous to Agile

Ambiguity tempts us to wait for certainty. Agile leaders know better. They:

• Take purposeful action despite uncertainty
• Learn quickly from small steps
• Adjust course based on real feedback
• Keep teams moving forward

With this all being said lets look to what we know we need to attend to so that we can power our pause.

Weather the Storm: Your 90-Day Action Plan

Knowing what to do isn't enough. You need a clear plan for the next 90 days. Not a perfect plan - action beats perfection in a storm.

Week 1-2: Get Clear

• Run your revenue audit
• Map your relationships
• Review your metrics
• Have key board conversations
• Identify your highest ROI activities

Week 3-4: Build Your Team

• Share the reality with staff
• Address performance issues
• Start cross-training critical roles
• Define new success metrics
• Begin system improvements

Week 5-8: Create Momentum

• Launch donor conversations
• Implement tracking systems
• Start program adaptations
• Build new partnerships
• Test new approaches

Week 9-12: Accelerate Change

• Scale what's working
• Cut what isn't
• Strengthen key relationships
• Measure early wins
• Adjust course as needed

Your job in these 90 days? Focus on:

• Making clear decisions
• Removing obstacles
• Supporting your team
• Building confidence
• Driving action

Don't try to solve everything at once. Break big challenges into small steps. Celebrate progress. Learn from setbacks. Keep moving forward.

Most importantly, remember this: The storm will pass. The organizations that thrive won't be the ones who have perfect plans. They'll be the ones who took consistent action, adapted quickly, and kept their teams focused on what matters most.

You don't have to weather the storm alone:

After 20 years in the nonprofit space, I've noticed something interesting. Organizations that grow have one thing in common.

It isn't:

Market size. Mission impact. Team Passion

It's knowing when to ask for help.

But here's the challenge...

Most nonprofits wait until they're: Hitting revenue plateaus. Losing key donors. Burning out staff. Cutting programs.

By then, it's harder to invest in growth.

The organizations that breakthrough? They raise their hand and ask for help. Here is our guide on how to know if you need help, and the type of help to get.

Conclusion

Do you want to grow your revenue so that you can sustain your organization not just in the years, but in the decades to come?

If you answered yes then I have something special for you.

I open a limited number of slots each week for nonprofit leaders who are serious about taking their fundraising to the next level, especially during stormy weather. During your strategy session, you’ll receive personalized support, actionable insights, and clear steps to accelerate your growth. This is completely customized to you.

If you’re ready to increase your fundraising revenue with a strategy tailored to your nonprofit’s unique needs, schedule a 1:1 strategy session with me. Here is a video on how it works.

Availability is limited, so act quickly to secure your spot and get started on building a stronger, more effective fundraising strategy today. Book your strategy session today!