Funding for Nonprofits: Embracing the Changes That Are Coming

Learn how to anticipate and adapt to forthcoming changes in funding sources and strategies.
Mike Simon
January 4, 2024


There's no denying that the world of funding is constantly evolving. With new technologies, changing trends, and shifting priorities, it can be challenging to keep up with the latest developments.

But wait a minute, change doesn't always have to be a scary thing, right? It could be a game-changer for your nonprofit organization if you grasp how to use it to your benefit. The key lies in understanding these evolving trends and how they could influence your funding strategies.

Now, you might be wondering, "But how exactly do I do that?" Well, that's what we're here for! From technological advancements to the shift towards more sustainable funding sources, we'll break it all down for you in the simplest terms. So, are you ready to embrace the changes and steer your nonprofit toward a more secure financial future? Let's dive right in!

The Lack of Resources

Since 2006, we've worked with churches, nonprofit organizations, food banks, and more. We provided them with technology tools to help streamline their workflow, allocate resources, and get the reports they need for funding.

Throughout the years, we discovered that most organizations struggle to maintain a constant flow of resources that can sustain and advance their mission. Many, with limited staff and volunteers, cannot keep pace with the increased demand for services.

Also, people’s needs are becoming more complex and beyond the scope of many agencies, which for the most part, are doing the best that they can with limited resources.  Most of these organizations are unaware of other organizations that offer the same programs and services.

Because of this, many children, youth, and adults go without access to effective programs and services, from across the community, that can help transform their lives.

Most organizations realize that more needs to be done. However, they feel powerless in developing lasting solutions in their community, because of a lack of resources.

You've applied for government grants, but they are downsizing.  You applied for foundation grants, but they are getting more selective, and the completion is fierce. And you've applied for grants from local funding opportunities, but they are scaling back.  

The funding organizations seem to make it harder to fill out grant proposals, making it tougher on your grant writer who is scrambling for funds to keep your nonprofit open and respond to people's needs. Money awarded for a simple nonprofit grant seems out of reach.

It's a tough spot, right? You're mission-driven and passionate about making a difference, but the lack of resources feels like running up and down the escalator. I cannot tell you how many times I have heard nonprofit organization leaders say, “Everything will be alright when I get that one grant that keeps us going.”  But when does that happen?


Donor Fatigue

And let's not forget "donor fatigue." This happens when funding organizations grow tired or lose interest in supporting certain charitable causes. Their office is bombarded each year with funding requests from eligible nonprofits that are trying to make a difference in their communities.

However, funders must make hard decisions as to which local organizations are doing the most good in the community, at least in their eyes. There is a growing concern as to what really works.For information on how your nonprofit can avoid donor fatigue, see "How Your Nonprofit Contributes To Donor Fatigue — And How To Avoid It."

The Funding Landscape is Changing

If you have not felt it yet, the expectations of funders are changing and could catch many organizations off guard. They are looking for nonprofit organizations that are sustainable, efficient, and effective. Funders want reports from charitable and social services organizations that substantiate their claims. 

Funders want more assurance that the right resources, get into the right hands, at the right time.

This is really about trust. Funders want to feel confident that their donations are being used wisely. They want to know that their resources - be it money, time, or goods - are going to the people who need them most and at the most appropriate time.

It’s all about ensuring that their generosity is making a real, tangible difference.

Funders are growing more interested in tracking transformation, rather than tragedy.  For example, funders are grateful that helping agencies are tracking how they are meeting the needs of long lines of hungry individuals and families. 

However, funders believe making those lines shorter, by striving to end food insecurity in a community, is a better-lasting solution.

Mario Morino, author of Leap of Reason, Managing Outcomes in an Era of Scarcity suggests:

“The cold reality is that in our present era of unsustainable debts and deficits, our nation simply will not be able to justify huge subsidies for social-sector activities and entities without more assurance that they’re on track to realize results.  Public funders—and eventually private funders as well—will migrate away from organizations with stirring stories alone, toward well-managed organizations that can also demonstrate meaningful, lasting impact.  It is no longer good enough to make the case that we are addressing real needs.  We need to prove that we are making a real difference.”


Funder's Conversation Are Shifting

Across the country, conversations are shifting among funders — especially donors, foundations, and government. This shift is driven by a What Works Movement, where advocates suggest:  “Let’s find out what really works; and then, make it work for more people.”

I have talked with many nonprofit leaders who say that we need "innovative tools" that do more than simply count the number of programs offered or the number of people served.  We also need to measure outcomes and impact — the successful results of our efforts and how much people’s lives are transformed.  

So, how do we know if things are really working?  

Well, funders suggest that communities can successfully answer this question if their nonprofit organizations will shift their approach to helping others. Consider the following:


Funders suggest that communities shift from a social service to a social change model.

  • Social Service Model – values efficient service-providing, which for the most part, is reliable.  However, it can be perceived by people in need as impersonal and more of a "get by" approach to helping others.

  • Social Change Model – values effective caregiving, which is more relational and more of a "getting ahead" approach to helping others, which fosters transformation.

Funders also suggest that communities shift from a single-focused agency approach to community-focused, collaborative care.

  • A Single-Focused Agency Approach happens when the lack of resources forces agencies to specialize in programs and services that are needed and vital to individuals.  But unfortunately, have a limited impact.

  • A Community-Focused Collaborative Care Approach advocates for a well-connected network of agencies that are working together more efficiently and effectively to coordinate comprehensive or holistic outcomes.

Funders are asking community stakeholders to shift from isolated to collective impact.

  • Isolated Impact happens when organizations work separately and compete to produce the greatest amount of independent impact, which for the most part, is limited and does not transform lives.

  • Collective Impact strives for large-scale social change supported by cross-sector partnerships working together for the common good and greater impact.  This is a better context for helping others because helping agencies connect, learn from each other, and collaborate for the well-being of everyone in the community.

Leading experts in developing lasting solutions to social problems suggest that  “Large-scale social change requires broad cross-sector coordination, yet the social sector remains focused on the isolated intervention of individual organizations.” — John Kania & Mark Kramer, Collective Impact.

Funders also suggest that helping agencies shift from assessments based upon unreliable assumptions to reliable data-driven decision-making.

  • Unreliable Assumptions foster a fragmented understanding of people’s needs that wastes resources and limits results.

  • Data-driven, Decision-Making (DDDM) drives a resourcefulness and comprehensive understanding of what works…and what doesn’t.


Funding Is Becoming More Data-Driven


Funders including the federal government and private foundations want more community stakeholders to find ways to reduce their dependency upon outside resources and learn how to tap into an abundant, but often unrecognized, wealth of local community assets.

Funders are concerned that a lack of communication and cooperation among charitable and nonprofit organizations in a community is causing wasteful duplication of resources. And not solving complex challenges. 

They want assurance that resourcefulness is happening at three levels of engagement.

  • Individuals and families
  • Helping agencies
  • The community as a whole

I remember having a conversation with a Director of Planning and Community Development here in Alabama.  Her job was to ensure that the federal grants, which were typically awarded each year, were used for community and economic development.

She had received a letter from the Federal government that her community’s HUD funding would be cut by 60%. This disturbing news would impact affordable housing and workforce development in the local communities that she served.

She also said that there were new stipulations for receiving and allocating this funding to other organizations. The distribution of funds in her community could not be focused on the work of one or two helping organizations. Funds must be evenly distributed to a multiplicity of organizations that should be working together. 

She also had the task of gathering information from all these organizations. And her role didn't stop there. She had to produce precise reports that backed up a community-centric method aimed at making people's lives better.

She was looking for a practical solution to her dilemma.  Our CharityTracker technology proved to be the answer to her problems, by increasing communication and cooperation among helping organizations from across the local communities.  Plus, providing her with the data that she needed.

Addressing Real Needs


We have discovered that most nonprofit organizations strive to track certain numbers that can demonstrate efficient use of resources. These numbers are very important for most grant applications, which require that certain questions be answered. 

The answers are designed to demonstrate just how effective a helping agency is at addressing real needs in their community.  An agency’s framework for planning and working its mission is called a “logic model” which is used by most nonprofit organizations around the world.

This progressive framework starts with :

  • Inputs – which include funds, staff, volunteers, and supplies — things that support the nonprofit's mission and sustainability.

  • Activities – which are methods, processes, or actions they employ to achieve their goals.

  • Outputs – include the programs and services they offer to individuals and families.

However, according to funders, these numbers alone do not tell the whole story — the effectiveness of programs or the evidence of lives transformed.

Making A Difference


The true effectiveness of a helping agency, and a community, is better defined by Outcomes and Impact Data.

  • Outcomes – are short and medium-term results or specific benefits for people; that is, lives improved, a better job and increased income that leads to social and economic well-being.

  • Impact – refers to long-lasting changes in the lives of people regarding their sustainability, and lasting solutions in communities — resulting in a significant drop in poverty, hunger, and other disparities.

These metrics demonstrate that resources are making a real and lasting difference. I must admit that our team is encouraged by nonprofit organizations that are strong advocates for measuring outcomes and impact.

I believe this is a clear sign that agencies are stepping up their game and are committed to “moving the needle” on poverty, hunger, and other community challenges.

Asset-Based Community Development

We are encouraged that communities are learning how to help themselves and not be constantly dependent upon outside resources.  This challenge has spawned proven methodologies and capacity-building tools like appreciative inquiry and asset-based community development

These remarkable tools help stakeholders tap into an abundant, but often unrecognized, wealth of local community assets.  These can include:

  • The compassion and generosity of local citizens.

  • Life-enriching programs and services are available throughout their community.

  • Trusting relationships and common interests that could lead to exciting community partnerships.

  • Diverse stakeholders who are willing to explore the mutual benefits of a “better together” civic culture in their community.

  • A tremendous wealth of knowledge, wisdom, and creative ideas can be discovered and connected for collective community impact.

Tapping into a community’s abundant wealth of local assets can:

  • Increase broader public participation in civic affairs.

  • Increase volunteerism by as much as 300%.

  • Get more people involved in giving back to their community.

  • Reduce dependence upon state/federal funds.

  • Increase local resource mobilization by millions of dollars.

This all starts by simply getting to know others in your community.  Listening to their vision and learning about what programs and services they have to offer.  These remarkable discoveries can then be harvested and aligned for collective community impact. 

Perhaps the greatest outcome would be the maximizing of a community’s collective caring power.

Unleashes Community Caring Power

May I suggest that charitable and nonprofit organizations, across a community, will have no problem getting the attention of funders if they will simply do the  following:

  • Invite all your community sectors to discover their local assets and unique strengths.  Create opportunities for these combined assets to become more powerful and productive together.

  • Create mutually beneficial community partnerships and reduce wasteful duplication of resources — saving lots of time and money. Also, encourage and inspire funders by your increased cooperation and information-sharing among diverse helping agencies.

  • Show funders how you are using data to make better-informed decisions as to where to allocate limited resources where they are most needed.  Community partnerships, supported by data-driven resourcefulness, are transforming communities from the inside out.

Doing these transformative processes will drastically increase a community’s resourcefulness and make all kinds of funders happy, and willing, to give more to worthwhile causes…for generations to come.

Learn To Be Resourceful

So, if organizations want to increase their fundraising efforts, they will need to become more resourceful with what they already have at the local level.  You probably would be very surprised at the vast number of resources that are already present in your community.

So, you're part of an agency looking to attract more donors? Well, here's a tip for you - it's time to become more resourceful with what your community already has to offer. Trust me, you'd be amazed by the number of assets you can find right in your own backyard!

Why not rally everyone in your community to uncover their unique strengths and assets? Let's work together to create a synergy that's more productive and powerful. By creating partnerships within your community, you can cut down on duplicating resources, saving not just time but also some much-needed funds.

And don't forget about the power of data! It can guide you to make informed decisions on where to place limited resources for the biggest impact. By showing funders how you're using data to drive your operations, you’re not only inspiring them but also paving a path to community transformation.

By following these steps, you'll be increasing your community's resourcefulness in no time. And before you know it, donors will be more than happy, and willing, to support your causes. Sounds like a win-win, right?

Doing these transformative processes will drastically increase a community’s resourcefulness and make all kinds of funders happy, and willing, to give more to worthwhile causes…for generations to come.


So, what's the lowdown on becoming a magnet for funders? Well, it’s all about revving up your community's resourcefulness, utilizing what's already in your backyard, and creating partnerships for less duplication.

And let's not forget the role of data in this - it empowers you to make smart decisions and show funders just how savvy you are, leading to a transformed community that's a buzz for those willing to support your causes.

Strengthening your funders' relations and rethink your communication strategy. Don't be afraid to share your story and connect with potential funders on a personal level. Remember, people give to people, not institutions.

So, let's keep our chins up and our minds open, shall we? There's a silver lining in every cloud, even in the world of nonprofit funding. Sounds like a remarkable game plan, doesn't it?

For more information as to how you can meet the future expectations of funders, check out the rest of our website at Simon Solutions. Or, give us a call at 256-764-0633 and speak to one of our Community Impact Specialists. We will show you how our technology tool, CharityTracker, can help you keep track of data that proves to funders your impact in your community.

Mike Simon
Simon Solutions, Inc.,
Since 2006, Mike has served as President of Simon Solutions, Inc., a trailblazer in "community impact solutions," earning the trust of thousands of helping agencies across more than 2,500 cities in 49 states, and now, internationally. These agencies employ our technology tools to communicate, cooperate, and collaborate more efficiently and effectively, uniting their strengths to overcome tough community challenges with greater impact and success. Mike has devoted his career to exploring emerging trends, best practices, and innovative strategies for transforming people’s lives and their communities.