In March of 2020, the whole world was scared.
At the time, I ran a bustling LGBT Community Center in the heart of New York City, and one day we gathered the staff, sent them all home, and closed our physical doors to the public indefinitely.
To be a leader in this moment was double-triple scary. “What does this mean for my family, and also my community and organization?”
COVID hit everyone hard, and it brought home a notable lesson for nonprofit leaders.
We had plans to hold our annual gala in April, which usually raised over $1.5M. In September, we planned to hold our annual AIDS Bike Ride fundraiser with a projected revenue of over $1.5M.
All of a sudden, that was $3M in revenue that was most certainly NOT coming in. And I was worried.
What if we can’t get a good honoree?
What if it rains?
What if a big sponsor doesn’t renew?
I had NEVER before contemplated the threat of these events being cancelled. And suddenly, what had always been a distant possibility became a reality.
It made me realize how much we as an organization relied on events. It was upwards of 40% of our budget.
From the day I entered nonprofit leadership, I had been told, “Watch your revenue mix. Don’t be overly reliant on any one funding stream.”
In March of 2020, I suddenly understood WHY revenue mix and diverse funding streams matter.
Where were you when you realized how important it is to diversify funding streams for your nonprofit?
Maybe it was in the first half of 2025 when federal funding for key public health programs, social services, and basic safety net offerings was slashed? It happened quickly. Once reliable funding reimbursements were in peril, future funding was uncertain at best, and gone completely at worst.
At least one nonprofit I know was 70% funded by the federal government, and overnight, poof! Millions of dollars were gone.
The nonprofit sector and its leadership find themselves in one of those moments where the ground is shifting beneath our feet, and while the needs of the community remain and grow, the funding to sustain the work is shifting and shrinking.
THE TIME FOR ACTION IS NOW
Being a nonprofit leader has never been easy, but it has rarely been this hard. Even so, we are not helpless. There are a number of things we can do to weather this storm and possibly come out stronger on the other side.
One of the very best things we can do is to look at our organization’s revenue mix and see where the risks (and opportunities) lie. The true key to making sure you don’t find yourself, or your organization, in this position again is to do this exercise every year, not just when a crisis looms.
No better time than the present, and so that the next time the unthinkable happens, you and your organization will be more prepared.
Planning now could make a potential future crisis just a simple bump in the road.
ASSESSING YOUR ORGANIZATION’S RISK
Wondering if your organization is at risk? Ask yourself these questions:
- Does any one funding stream make up half or more of your total revenue?
- What would happen if that funding were thrown into question or halted altogether?
- Within your funding streams, is there any one person, company, or foundation that is responsible for 40% or more of the total?
- What would you do if that source changed their mind or priorities and stopped giving?
These are the questions that can make a nonprofit leader break into an instant sweat. They are serious questions, but they don’t have to be SO scary. If you can force yourself to take a sober, clear look at your numbers and see where the risk (and opportunity) lies. You CAN do something about it. Now.
Real talk? Thinking about risk is not fun. But it is important. It can save you a whole lot of angst, and it can save your organization ALL TOGETHER, if you make changes in time.
NOT SURE WHERE TO START?
Start where you are. Take a good look at your revenue mix TODAY, and ask yourself the questions above.
Then sign up for our workshop on diversifying your revenue. You learn how to spot the risks right now. You’ll learn about three funding streams that you are probably not thinking about enough and how you can invest in them to strengthen your organization.
You are not alone. And you will not be alone on this journey.
In my 20+ years of leading nonprofits, the most valuable lessons I learned came from the biggest challenges. Good news, we in the sector are facing plenty of those.
We have faced them before, and we will again. Together, we will weather this storm and come out the other side, probably a little battered, but quite possibly stronger for when the next storm hits.
Back in 2020, we were lucky to have a healthy pool of dedicated individual donors. We adapted our strategy to do virtual events and successfully made up some of the funding gap. Enough to survive.
Overall, it forced us to take a hard look at our revenue mix, and we realized just how risky (and rewarding!) events could be. We decided not to put any more of our “eggs” in that basket, and to invest more in strengthening other revenue streams.
We invested more time and energy in our individual donor base, expanding relationships and building trust, looking to bring new people into the fold whenever we could and to move donors up the giving pyramid when possible.
Finally, we made looking at our revenue mix an annual practice to ensure no one piece of the pie got too big, and we became overly reliant on it. Healthy, diverse growth of revenue streams was the goal.
Those are a few ways to do it. Another? Consider new or nascent fundstreams that may not even be on your radar. We thought a TON about major donors, but what about members? Those everyday donors who cared about our work and gave consistently.
What about earned income? Yes, “selling” something valuable to people who will pay for it, and putting that money back into your organization’s mission. Our funding diversification workshop will dive into the importance of considering earned income as a revenue stream — and share examples of how to get started.
We are not stuck here. There is a way forward. Together, we can weather this storm and come out the other side, quite possibly stronger for the future.
→ The workshop, From Scrambling to Sustainable: Your Nonprofit’s Revenue Reset, begins on August 18, 2025.
