Action Steps to Reduce Your Organization’s Reliance on Federal Funding

Given the executive orders to pause or cut federal domestic grants and international aid, reducing your organization’s reliance on federal funds may sound like a good idea, but also a near-impossible, long-term task when you’re worried about keeping your life-saving programs running and the lights on. 

If your organization would like to lean more into the private sector while remaining well-positioned to leverage future federal funding opportunities, Chairman Bob Carter and Managing Director – Global Philanthropy Kristina Joy Carlson have put together some action steps you can consider taking RIGHT NOW.

These steps won’t diversify funding overnight, but we know getting started is often the most challenging step to take. Over time, we recommend using a combination of these strategies, adapted and customized to your organization for sustainable results.

For U.S.-based organizations:

1. Identify, speak positively and communicate about the impact federal funding has had on your mission (lives changed, programs delivered, jobs created, other funding sources leveraged, etc.). In other words, help people understand what federal funding has accomplished and, dare we say, feel good about what federal funding has accomplished.
2. Set a meeting to bring your organization’s “brain trust group” (staff leadership, board leaders, consultants) together to discuss implications and solutions. 
3. Engage your board leaders in a “solution-based” discussion. This discussion should be laced with reality, but it’s important to remain positive. Panic and fear will only impede forward progress. 
4. Consider creative financing (i.e., lead trusts, personal interest-free loans, LOCs at very favorable rates, endowment borrowing with long-term, low-percentage payback terms, etc.) 
5. Consider collaboration with fellow charities for fundraising/shared purchasing to improve the top and bottom lines of funding.
6. Personally call (not email) your top 10 donors and discuss the realities of where you are and the implications in real terms and seek their counsel and support. These conversations may include discussing matching funds and other solicitation strategies.
7. Give your broader staff the outline of leadership’s “pathway for solutions” and get their input.
8. Over-communicate with primary constituencies and staff about the implications of a reduction or pause in federal funding while keeping a positive voice about what it has accomplished in the past. Illustrate how you are quickly leading the organization to a better place and ask that they join in the journey. 
9. Consider recruiting a board member or advisor with mergers and acquisitions experience who could help your organization look at collaborations and possible operational efficiencies.
10. Use the private sector advantages to your benefit in your case for support and communications, including emotional appeals, and remember that the “human heart” is much more reliable than “municipalities” year in and year out. 

For international organizations and NGOs:

The action steps above will also apply to your organization, and, in addition, we recommend a few other strategies.

1. Identify, speak positively and communicate about how federal funding has strengthened your ability to secure partnerships and support in the countries you serve.
2. Schedule discussions (not emails) with your largest non-US government funders to discuss implications and other potential sources of funding.
3. Build or strengthen a “circle of friends” for your organization – a group of passionate donors, volunteer leaders, experts, etc., who you can rely upon for advice and can help advocate for your mission in the regions you serve.

What other strategies is your organization using to diversify funding while staying prepared to maximize future federal support? Join the conversation here on LinkedIn.