The Top 6 Reasons to Walk Away from a Funding Opportunity 

funding opportunities mission nonprofit funding nonprofit funding model nonprofit sustainability Apr 20, 2023
Nonprofit Funding

The fundraising landscape is challenging and fraught with unrealistic expectations that nonprofits must meet. As a result, many programs are underfunded and struggle to function optimally. The subsequent effects of mismatched funding and restrictive limitations from funders can then result in your staff losing confidence in your ability to lead ethically. Therefore, it's important to vet funding to ensure an alignment with your organizational North Star Values. This includes evaluating whether funding opportunities are ethical and doable beforehand so as to balance the organizational mission and sustainability

Critically Assess Every Potential Funding Opportunity:

It is critical to create a blueprint for balancing the financial and administrative needs of an organization with the long-and-short-term needs of the people your organization serves. This includes asking the following questions: 

  • What will the short-and-long-term impact of this funding be on the people the organization serves?
  •  What will be the impact be on the mission of the organization? 

Assessing the operational effects  on the organization is also critical. Some of the questions that your team should ask include, but are not limited to:

  • Does your organization have the capacity to carry out the project? 
  • What will be the administrative impact? 
  • What will be the financial impact? 
  • What will be the impact on staff? 
  • What will be the reputational impact of this funding on your organization? 

After answering these questions, when the funding is insufficient, some organizations decide that they will take the financial hit because it is key to advancing the mission of the organization. They subsequently look for alternatives to make up for the short-falls. 

Conversely, some of the reasons to preemptively opt out of funding include, but are not limited to: 

  1. The people your mission serves will experience significant harm if the supports are taken away from them in the long-term or the services can’t be adapted to their needs, 
  2. The mission will be negatively impacted because the funding is not consistent with the organization’s North Star Values,
  3. Organizational capacity is not supported, which means that you will not be able to build the needed systems to operationalize the program ethically or meet the compliance requirements associated with the funding, 
  4. Employees will be overtasked on an ongoing basis, which will increase turnover and impact how other services are delivered,  
  5. Programmatic, fiscal, or administrative limits placed by funders compromise the quality of the services you provide or will have negative repercussions on other programs, and 
  6. There is insufficient funding to cover programmatic costs (e.g., start-up costs, adequate staffing, skill-building, etc.) which will result in incomplete services that do not address the needs of the people you serve.

Nonprofit funding serves more purposes than creating financial sustainability for an organization. It is a means for ensuring that your organization allows for a systematic focus on duty of care because the mission is at the forefront of all decision-making. Ultimately, mission-driven metrics for assessing funding opportunities help nonprofits establish a balance between mission and organizational sustainability.

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