7 Things Nonprofit Leaders Can Say to Funders to Effectively Manage Limited Resources

Coming onto the scene as start-up nonprofit doesn’t come with many perks.

In a sector frequently run by rich or wealthy people, being the “new kid” usually comes with unrealistic expectations from those holding the purse strings. New nonprofits, especially those who are Black-led or run by people of color, endure a level of scrutiny that forces them to operate with limited (if any) resources.

But this constant struggle for resources extends beyond start-ups. If you’re in any way familiar with how nonprofits operate, you already know that funding is an intense topic of conversation regardless of who is in the room.

On the other hand, if you’re a new nonprofit leader, you might still be surprised at how much the sector is consumed by this structure of living paycheck to paycheck, so to speak. You also might wonder at the amount of time your colleagues spend talking about and searching for new grants, new donors, and new funders—time that could imaginably be better spent developing new or better programming, for example.

But even though you might be relatively new to the sector, you may also start to realize that this blame cannot all be placed on executive leadership. In fact, a large portion of this pressure seems to come from funders (and their previously mentioned unrealistic expectations). In your interactions with funders, you might find that they tend to assume their access to wealth validates their authority and, in the process, they waste an organization’s (usually already limited) time and resources.

As the Executive Director of the nonprofit startup, Youth Empowerment for Advancement Hangout (YEAH Philly), I have seen much of this firsthand. Our nontraditional organization works with teens and young adults (ages 15 to 24) in West and Southwest Philly who are directly impacted by violence in order to address its root causes through peer-led conflict resolution/mediation, community investment, and economic opportunities. Supporting them in ways society generally does not, YEAH intentionally stands independent both from systems and institutions who cause harm to young people as well as from those who do not invest in our communities. YEAH was created to challenge the status quo of how we serve young people, how we invest in communities who need it most, and how we utilize funds.

And perhaps it is this critical viewpoint that allows us to stand up to funders. After all, these are not just my personal grievances about funding in the nonprofit sector. Rather, many of these tendencies and expectations perpetuate the same systemic inequities the nonprofit sector is supposed to address.

So, what are we, as nonprofit executives, to do about it? Well, here are seven things we can (and should) begin saying to funders:

1. We’re allowed to say no.

Especially as a start-up, funders constantly expect organizations to prove their worth. This proof might take shape in different forms, like submitting numerous outcome reports or putting funds towards new projects instead of supporting existing work. However, the outcome is the same: it detracts from the organization’s ability to do real work.

Similarly, funders often require or expect the organizations they fund to do things, such as attend events, that ultimately waste these organizations’ time. And sometimes these events exist in service of the funders’ ego, not for the purpose of the organization.

But even those well-intentioned funders who try to connect you with other organizations that they think do similar work can be guilty of wasting our time. Funders’ connections might not be relevant, or they may want you to attend or plan additional events. They’ll connect you with their friends, but their friends might expect something out of you as well. In the end, the networking is not always positive.

And at the root of it, many funders think that because they are giving your organization money, they are entitled to more of your time, commitments, and work. With such power dynamics, it is not typical of a nonprofit to say no to a funder, but it is imperative.

As the boots on the ground committed to effecting systemic change, nonprofits are allowed to set boundaries and say no without consequences. This doesn’t mean we are ungrateful or don’t like or respect funders; it means that we do not need more responsibilities from people who are supposed to make things easier for our organizations.

2. We are the experts, and you need to trust us.

It is also common of funders to not truly understand the work you do as an organization. They only know what we show them, and rarely do they have any hands-on training in our work. In fact, we’re all probably aware that nobody knows our work better than our people. We should all be moving towards trust-based philanthropy, as this is what works.

Of course, building this trust with funders is essential, and our funders’ deep understanding of the work we do is part of this. But building trust also takes time, so it’s vital that funders incorporate this into their daily work of supporting organizations. Our organization wouldn’t be successful if we weren’t experts, and it’s crucial for them to trust that and trust us. In order to demonstrate our expertise, we especially want funders to ask clarifying questions, doing the work to better understand the work we do.

However, we also know when funders don’t trust us based off of certain questions, and this in turn makes us not trust them. A situation comes to mind in which a well-intentioned funder gave us money to help purchase a building, only to assume we were being dishonest about the funds’ allocation when the purchase process continued to be delayed. Apparently, they had driven past and did not see a “for sale” or “under contract” sign outside the building. Although the issue was eventually resolved (much to the funder’s embarrassment), we threatened to give back the money and made it clear that these are not the types of antagonistic relationships we build with funders.

Simply put, if funders don’t trust us, they shouldn’t give us money. After all, we don’t need or want contentious relationships that take our focus away from our work.

3. It’s not about the numbers; it’s about real impact.

Too many organizations and funders only care about numbers. Today, thousands of nonprofits flaunt how many people they serve, but if you take a closer look at what they really do or how much money they put towards programming, you see that many organizations are not doing much. For example, we know some non-Black organizations with multi-millions of dollars that serve 100 or fewer people per year yet are automatically looked to as models for their work with no questions asked.

Due to YEAH’s rapid growth and success over the past three years, there is pressure from funders to scale and expand faster than we should. Each year, we report serving almost the same number of young people (about 400) but then must explain why we didn’t serve an additional 100+ young people. For YEAH, of course we want to make sure we serve a decent amount of people; however, we need to make sure we are providing high quality services that impact young people in a way that other places are not.

This means funders need to focus on what the organization is specifically doing and whether it’s really working. It sounds cliché, but our focus on quality over quantity is as important for us as it is for all nonprofits.

4. We’re intentional about who we take money from.

Just because someone provides funding doesn’t mean we have to take it. There are lots of nonprofits desperate for anybody’s money, but do you really want to take money from someone whose values conflict with your own?

YEAH can always use funding, but it matters more to us where and who it comes from. Our organization prides ourselves on our integrity and making sure we are not taking money from horrible people or institutions. If funders have any history of upholding racism or white supremacy or harming young people, we won’t take money from them.

Similarly, if we meet them and feel that they really don’t support us as an organization or believe in our work, we won’t take money from them. We want to be transparent about ending a funder relationship that isn’t the right fit for us. Our organization would rather have a smaller budget and build relationships with funders who really want to intentionally invest in what we do.

5. We need you to care about our work, not necessarily volunteer with us.

There are too many funders who just give money to certain causes (like gun violence reduction) because “that’s what everybody is doing right now.” I have sat in various meetings with funders who say this out loud, and it is blatantly obvious they have no interest in what we do, let alone care about us and our work. Funders should invest in things that they care about because this passion makes a huge difference for everyone. At the end of the day, it’s ok if a funder doesn’t support what you do, but they shouldn’t get upset when you tell them that they are not the right fit for your organization.

On the flipside, caring about our work doesn’t necessarily mean that funders have to volunteer at our organization. In fact, we might really like someone as a funder, but we don’t necessarily want to spend time coordinating additional volunteer events for their team. We don’t have time, and it burdens our organization to require something like this.

The best thing a funder can do is support us financially and ask us what else we need if they are looking to support organizations outside of grantmaking. We know funders want to help out in other ways, but please stop forcing grantees to take part in hosting volunteers without asking if it’s something we want (or need) to do.

6. We need general funds, not project-specific grants.

I don’t know why philanthropy has been so hell-bent on project-specific funding, but we need general funds—you know, so we can operate. Even if funds are dedicated to a specific area of focus (such as gun violence reduction), all grantmaking should be general funds for that focus area. This means that the organization should have the autonomy to determine what the specific needs for reducing gun violence are, usually in relation to the work already being done. Again, this requires that funders trust the organizations they give money to, recognizing that we are the experts in where and how our money should be used.

However, it’s also a matter of treating people like people by understanding that things come up with nonprofits all the time. YEAH Philly, for example, spends money like few other nonprofits by investing directly in young people; these young people have basic needs (food, clothes, stipends, furniture, vital documents) that must be met. But this investment cannot be one-size-fits-all as every individual needs different things. Additionally, our organization’s rapid growth means the crucial need for more staff, space, benefits, and maintenance to our properties. These things are necessary, not always planned, and expensive at the same time.

And this goes for most nonprofits. When your services deal with people, you need to treat them like individuals, not projects. General funds are vital to every nonprofit organization because they allow us to decide which program the funding goes to. Again, we are the experts of where the money needs to go—not funders.

7. Please stop requiring so much work for small amounts of money.

Many funders get offended when they share a small grant with you, and you decline the chance to apply. While $5,000, $10,000, and $15,000 grants are helpful to our operations, they are often not worth the hassle of all the things funders require for such small amounts of money. Long applications, various outcome reports, quarterly check-ins, milestone reporting forms etc.—all of these take time and energy.

The number of staff hours and the amount of pay that go into the requirements for small grants are generally not worth us applying at all. So we, as nonprofits, need to remind funders not to take offense to us declining the offer to apply to a grant even if they think we’d be a perfect fit.

And for us, we need to remember that we’re allowed to say no.

What Funders Need: Transparency & Authenticity

The nonprofit sector has a long way to go when it comes to funders supporting organizations (especially startups) in a more nuanced way. However, throughout the past three years, our organization has built strong relationships with funders by staying transparent and authentic.

Of course, there will always be those who initially want to fund us but, after meeting with us, realize it’s not a good fit. Maybe they weren’t ready to support the work we do, or maybe they didn’t care for how transparent we are concerning our expectations of and boundaries for funders.

But that’s the beauty of building your own organization: you get to choose to stay true to who you are and your organization’s mission. Admittedly, our startup wouldn’t be where it is today without support from some large funders. However, it is crucial to acknowledge that as organizations, we know what we need. It’s for funders to trust, be empathetic, and think critically about how they can support our work in a meaningful way. Only then can we effect the transformational changes our world so desperately needs.

About the Author

Kendra Van de Water

Kendra Van de Water lives with the belief that challenging oppressive systems creates sustainable change. Her life’s work is to improve the quality of life for people on all levels, starting with communities. As a licensed social worker, Kendra’s expertise includes local, state, and national work on improving conditions of confinement, law enforcement oversight, policy and program implementation, violence reduction, and improving how Philly responds to homicides and provides services to city residents after violent tragedies.

In response to existing youth organizations not willing to address community issues based on the needs of the individual, specifically for teenagers, Kendra co-created Youth Empowerment for Advancement Hangout (YEAH Philly), a nonprofit focused on empowering teens and young adults in Philly who have been impacted by violence. YEAH is a sustainable movement utilizing teen power to ultimately reduce neighborhood youth violence through community investment and programming implemented to specifically address the needs of teens and young adults on their terms. YEAH focuses on a variety of services to improve the lives of teens who need it most, especially those who live in underserved and underinvested neighborhoods. Through peer led mediation and conflict resolution, civic and community engagement, and economic opportunities, YEAH empowers teens and young adults to be themselves and thrive in their own communities.

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