What Happens When There’s Less Government Funding

Earlier this week, The Chronicle of Philanthropy published a study titled “Charities Veer from Record Government Funds to Cutbacks.”  The findings indicate public funding (federal, state and local) to charities, excluding colleges and hospitals, increased 77% from 2000 to 2010.  At first look, one might think the government has done its part in supporting the non-profit sector.

Why then are so many non-profits struggling, especially those focusing on human services?  They are struggling and permanently closing their doors because they are facing a triple whammy from the government. According to the study, human services non-profits (399,221 organizations according to GuideStar) rely on government funding for 49% of its revenue at a time when:

  • Federal stimulus money is almost gone.
  • Cuts have been made to human services programs in the federal budget – a trend likely to continue.
  • The automatic sequestration cuts have kicked in.

If half of operating revenue is coming from government sources, how do human services non-profits replace these resources?  Non-profits must be open to exploring new revenue models and fundraising strategies.

Read the full article here.  http://philanthropy.com/article/Charities-Veer-From-Record/138989/

Have you seen an increased service need at your non-profit while government funding has decreased?  How are you achieving your mission?

Is your non-profit replacing programming with options that are more attractive to funders?

Has your non-profit built a sustainable model to secure funding that limits dependence on government funding?

Please share your thoughts.