During the COVID‑19 era, unprecedented federal funding helped many nonprofits and public agencies maintain operations. Most of these resources were temporary, with spending deadlines that have already passed or are quickly approaching. With temporary federal dollars expiring, organizations are increasingly uncovering structural deficits that were obscured during the funding surge, underscoring the need for proactive financial and operational planning.
Alongside these reductions, heightened scrutiny and delays in federal funding over the past year have added to the uncertainty surrounding future grants, pushing many organizations to evaluate how potential changes could affect operations.
While no one can predict exactly how the funding landscape will evolve, most agree that change is here. Preparation is key. Now’s the time to pause, reassess, and focus on sustainability in a rapidly dynamic funding landscape, especially if your organization relies significantly on grants revenues. Here are eight practical steps you can take to navigate the shifting landscape, deal with the coming change, and position your organization to compete more effectively as opportunities become increasingly competitive.
1. Reassess and recenter on your core mission
Start by reconnecting with your core purpose. Gain clarity on what truly matters and refocus on the strengths that define your organization. Pay careful attention to opportunities that may seem attractive yet subtly pull attention and resources away from your mission, scattering capacity and diluting impact. Establish the essential outcomes you must deliver, and what will it realistically take — financially and operationally — to achieve them in an evolving landscape.
2. Ensure financial readiness in uncertain conditions
Assess current program operations with a focus on improving efficiency, reducing losses, and protecting service quality. Conduct a cash flow analysis to understand your financial resilience and prepare for delays, interruptions, or terminations in funding. This will help maintain liquidity, strengthen stakeholder confidence, and support smarter decisions about resource allocation. When evaluating new opportunities, adopt a long‑term perspective by estimating the “total cost of ownership” — the cost to launch, sustain, and potentially wind down a program. Accounting for long‑term costs upfront will help alleviate the need to cut services or absorb costs through the general fund when funding stops. This analysis may lead you to consider passing on low‑dollar grants that are disproportionately costly to administer.
Document how a funding loss or changes to grant terms could affect your programs, and develop clear fallback strategies for revenue, expenses, and program delivery to mitigate those risks. For risks that can’t be mitigated, determine in advance how you’ll respond if they occur, and be prepared to quickly pivot to a backup plan if necessary. Your ability to respond in the moment can be a key factor in sustaining your mission.
Ensure grants receive sustained attention from senior financial leadership. Even when funds appear plentiful, proceed carefully — future funding may not follow. Remember, your priority is to safeguard your organization’s capacity to achieve its primary mission, even in uncertain conditions.
3. Build resilient strategies through scenario planning
Engage in scenario planning grounded in your strategic priorities and core strengths. Identify what you do well, what scales with fewer resources, and where past successful pilot programs or cross‑department efforts could be revived. Consider what collaborations worked previously and where new partnerships might accelerate impact now. Reflect on unplanned challenges you experienced in past crises, such as the 2008–2009 financial crisis, to understand what worked, what didn’t, what approaches could be improved or repeated, and what you would do differently today.
From this analysis, develop clear contingency plans, track key indicators, and remain ready to pivot quickly as conditions evolve. Your plan should include all the factors that go into ensuring service continuity and financial sustainability to meet your commitments during uncertain times.
4. Diversify revenue sources to reduce funding risk
Diversifying revenue is one of the strongest safeguards against funding volatility. Building alternative streams — whether public, private, or philanthropic — can stabilize programs if federal dollars shrink or disappear. If your primary funding comes from federal sources, are there state or local funding alternatives available? Or perhaps philanthropic dollars through foundations? Explore all avenues for diversification, regardless of whether current risks materialize. These opportunities should include both bridge and permanent funding scenarios.
5. Explore strategic partnerships to maximize efficiency
Look for opportunities to collaborate with other organizations on work that falls outside your core mission. Collaborative approaches such as shared‑service agreements or joint funding proposals allow agencies to tap into each other’s strengths, pool resources, and operate more efficiently, especially in challenging economic environments. Take a moment to rethink old boundaries and explore new partnerships that may not have existed before. By doing so, you can protect your mission, strengthen service quality, and maximize the impact of every dollar and hour invested.
6. Use your financial systems to signal readiness and reliability
With increasing grantor scrutiny and fewer dollars available, demonstrating strong data management is essential for maintaining existing funding levels and winning new grants. Effective grant stewardship requires accurate, timely, and standardized data across applications, service delivery, and impact assessment. This includes precise tracking and monitoring of timekeeping and labor charges to grants, real‑time reporting, and reliable information at every step.
Your ERP system and chart of accounts sit at the center of your data management efforts. Investing in strong data infrastructure signals that you’re organized, transparent, and prepared to manage public dollars responsibly, positioning your organization as a more competitive candidate for future funding.
7. Strengthen compliance and reporting
Strict compliance with grant terms and conditions and federal regulations will help avoid red flags at your organization. Conduct a thorough review of each of your awards and stay focused on delivering promised outcomes with special attention to risk assessments, current reporting obligations, and monitoring. Continue to ensure that subrecipients comply with federal regulations and achieve performance goals. Get all findings and concerns resolved expeditiously.
Focus on interdepartmental collaboration to ensure the programming and service side of the organization is in sync with finance to ensure accurate accounting of the dollars. This may involve a culture change to ensure success with your grants.
8. Stay informed and communicate with purpose
Monitor the federal grant landscape closely and stay current on new executive orders, agency guidance, and funding notices. As you take steps to reduce risk, communicate proactively with stakeholders about what’s changing, what work will continue, and how those efforts support your mission. Engage stakeholders broadly, including staff, board members, donors, volunteers, partners, and consumers, keeping them informed about potential risks and impacts.
Communicate clearly about financial challenges, grant outcomes, and strategic adjustments. Explain how resources are being allocated to maximize impact and demonstrate responsible stewardship of public funds to reinforce credibility and organizational resilience. Clearly state why your programs remain compliant, effective, and worthy of continued funding.
Notify subrecipients and contractors of identified risks and planned mitigation actions, including any program modifications or suspensions.
Share what you know, acknowledge uncertainties, explain next steps, and deliver consistent messages across multiple channels.
Get the right help
For many organizations, funding uncertainty is emerging while leadership teams are already stretched managing ongoing operations, compliance demands, and stakeholder expectations. Grant programs inherently involve complex requirements related to administration, reporting, and compliance. Partnering with external experts that specialize in supporting nonprofits and public sector agencies can help navigate these challenges by providing critical technical support across grant compliance, financial planning, operations, and regulatory requirements — while helping your organization manage change with greater confidence and stability.
Turning uncertainty into long‑term resilience
Change is coming, and waiting to react isn’t an option. Now’s the time to plan, ask difficult questions, and prepare to deliver your mission with flexibility and resilience. By acting early, communicating clearly, and leveraging trusted expertise, your organization can withstand disruption, navigate shifting conditions with confidence, and ensure that grants remain not just a funding mechanism, but a catalyst for long‑term impact and community resilience.
