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Challenges to Achieving Financial Sustainability

• Many nonprofit organizations are over-reliant on external sources of funding, such as government grants, that have been cut back in recent years.
• Nonprofits depend on marketing and branding efforts to help promote and sustain their programs and services, but branding considerations are often overlooked in the nonprofit sector.
• Donors increasingly want access to up-to-date information about an organization's operations and finances as a way of ensuring return on their investment.
• Nonprofits serving low-income communities often struggle to raise funds, as few community members have the means to contribute financial support to nonprofits.

Promising Practices to Overcome These Challenges

• Innovative fundraising techniques, such as giving circles and fostering relationships with investors, can help to address financial challenges.
• Clear, consistent marketing and branding will help communicate a nonprofit's social mission to funders and the community in which it resides.
• As a way to respond to the changing resource environment and minimize competition for funding sources, many nonprofits have formed collaborations with other organizations that have similar goals.
• Engaging in evaluation activities that outline financial and programmatic outcomes as a result of funding support demonstrates the value of a nonprofit's operations and helps determine mission impact. Additionally, clearly and consistently communicating evaluation efforts and findings to funders and investors demonstrates accountability.
• Establishing and engaging community board leadership and a system of community volunteers provides a resource of varied experiences and expertise while bringing a sense of ownership to the communities that nonprofits serve.
• Fostering a culture of giving and addressing the "willingness to give" gap may address fundraising challenges in communities where many residents have very limited resources to spare.