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Posted: 2018-12-04 16:08:09

It goes without saying that funding is needed to accomplish mission.

However, funding continues to be a nonprofit’s greatest challenge. In this era of funding uncertainty, should an organization take all the funding it can get or are there times when “No Thank You” is the best answer to a funding opportunity?

While the impact of the Tax Cuts and Jobs Act on funding for nonprofit entities is yet unknown, funding volatility makes the planning and forecasting process organization more difficult. That includes:

• The unpredictable political environment makes government funding uncertain;

• There continues to be increased competition for funding; and,

• Larger foundations are rethinking funding strategies, taking on programmatic initiatives and giving to fewer organizazations.

Funding is not going away. There has been a major shift in funder expectations, though, as donors are becoming more sophisticated and no longer give just for the sake of giving. Funders are focused on programmatic outcomes as the major criteria to measure mission effectiveness and an organization’s success. Funders are taking a data-driven approach and making funding available to organizations where leaders can prove desired outcomes. Many organizations struggle with how to measure success and mission impact.

There continues to be a lack of funding for administrative overhead and infrastructure, despite the noble efforts to “dispel” the overhead myth. Some organizations have been successful in enticing a core group of donors to focus support on infrastructure. It remains difficult to find funding for non-programmatic activities.

The mentality that organizations investing in infrastructure are taking resources away from program still exists. Many funders continue to cap overhead reimbursements below true cost to execute program. In addition, nonprofits are constantly being bombarded by unfunded mandates. The increase in minimum wage and paid family leave provision are recent examples of such mandates.

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