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Government Funding Is Being Cut. Don't Panic. Act!

The handwriting is on the wall in big bold letters: government funding for many redevelopment and social service programs is going to be dramatically reduced over the coming years.

In fact, many local and state government agencies—some of which serve as financial intermediaries to local nonprofits—already have seen their own budgets slashed, if not totally eliminated.

On a recent project, I interviewed the community development director of a large metropolitan municipality whose budget recently had been cut by his state's legislature. He told me that local government agencies that have lost staff as a result of such cuts "are eagerly looking for strong nonprofit organizations to partner with."

For many nonprofits, this is an opportunity to step up and fill the voids left by local governments' inability to continue to provide much-needed and valued community services.

But what if your nonprofit relies on government funds that are being cut, and you simply don't have the resources to fill the void?

There's opportunity here for you as well—if you're willing to step out of the box, be creative, and dig your heels in to seek out other-than-government revenue streams.

Step 1. Move forward!

Get over the shock and disappointment that your government funding has been, or is about to be, drastically reduced or eliminated and begin taking a long, hard, introspective look at your organization.


  • Who are we? Do our intended audiences truly know who we are—or that we even exist?
  • What have we been doing all these years that makes our services so important to our community? Put another way, what would our community look like if we didn't exist?
  • How have we been doing it? Are we innovative, creative, and flexible enough to make the kinds of changes necessary to survive these budget cuts and continue to provide the kinds of services our community needs?
  • If the answer to the last question is yes: What's our story? What's the brand narrative we can rightfully create and bring to potential funders that demonstrates the value of who we are and what we do for our community?

Step 2. Create your brand narrative

What are the most important ingredients to a good narrative?

Martin Teitel, a 45-year veteran in the world of nonprofits, 30 of them for grantmaking foundations, in a recent interview said what matters when it comes to grant applications is "clear, concise, and compelling writing," writing that speaks to hope, a vision of a better world, and how your nonprofit proposes to get us to that better place.

I would add that within the context of your narrative, you need to include compelling data that speak to your mission-driven successes.

It's not enough to say 500 people walked through your doors last year. Serious donors want to know where those people are today and how, specifically, the services you provided to them improved their lives or the dynamic of your community.

Step 3. Bring your narrative to where the money is

Government funding may be drying up, but in many parts of the country the economy is starting to come back. Here are some suggestions for places to bring your narrative:

  • Banks. In the aftermath of the Great Recession, many are still in need of image repair. Partnering with your nonprofit to help meet the needs of your constituents may be just the opportunity your local banking community is looking for to improve its image.
  • Foundations. Each year, foundations give out $25 billion in grant money. You won't be on the receiving end, however, unless you can clearly and concisely tell them who you are, what you do, how you do it—and, most important, why they should care!
  • Chambers of Commerce. Many local businesses enjoy both the respect and added business they receive from their philanthropic activities. Get on their radar screens by speaking in front of them and other local civic organizations.
  • Giving Circles. Giving Circles—a form of shared giving and social investment networking—represent a growing trend in philanthropy. For more information on giving circles and a list of which communities enjoy their generosity, log on to

Step 4: Seek investments, not donations

In lieu of seeking "donations," position your organization as a community leader seeking an "investment," not only in your organization but also in the community at large. To do so in good faith, you will need to make a strong case for how your services and leadership contribute to the common good of making your community a better place for people to live, work, and play. The return on investment, or ROI, you and your investors are seeking is social, not financial.

Step 5: Live up to your narrative

Be aware that your brand narrative is your story, not your fairy tale. Your success at developing new revenue streams will be short lived if you don't live up to your narrative and the promises you embed into it.

Sound easy? It's not! Nothing worth doing ever is. You may need to change your entire business model. But in the face of reduced government spending on social issues, what other options do you have?

You can either embrace change and move forward, or ...?

Larry Checco, Checco Communications
© 2012, Checco Communications

how-nonprofits-can-respond-to-government-funding-cuts_Larry_Checco.jpgLarry Checco is president of Checco Communications and publisher of Branding Bytes, which is archived on the Checco Communications Web site. He specializes in aligning organizational management with brand identity. Larry is also a nationally recognized public speaker, workshop presenter, and consultant on branding and leadership. His latest book, Aha! Moments in Brand Management: Commonsense Insights to a Stronger, Healthier Brand, was published earlier this year. His first book, Branding for Success: A Roadmap for Raising the Visibility and Value of Your Nonprofit Organization, has sold thousands of copies both here and abroad.

Topics: Fundraising