Gov’t Funds Not Free

Although the economy is on the mend, the recession has changed the landscape for many families and the communities they live in. Pre-recession, many were part of the middle class living in their own homes with well paying jobs. After the recession, their full time jobs turned into two part time jobs often for minimum wage. People who were once donors are now looking for financial support to make ends meet.

With demand this large, many nonprofits continue to look for new sources of funding. Often this funding stems from the government, whether federal, state, or local. As discussed in previous posts, government funding is one of the few alternatives to scale an essential program in an attempt to serve the overflow of need in the community.

Programs this large often require internal administrative structures and controls to document services rendered and “draw down” or request reimbursement from the government source. Without these strong administrative functions, the nonprofit will struggle to develop the back up needed to generate the revenue leading to a failure to carry out the contract.

Creating these essential internal functions takes time and dedication. Often government grants require quick program start up. Smart leaders prepare for these grants by exploring and strengthening their administrative systems before the grant is received. Additionally since these expenses are rarely fully covered by the grant, organizations need to think creatively to develop long term efficient solutions.

Another essential element of an efficient program is a strong recruitment and referral system. Creating relationships with organizations providing complimentary services builds comprehensive services for families in need as well as cross recruitment efforts.

Additionally, by constructing a strong network, the organization creates a robust advocacy effort engaging leaders for the long term. This force will lead to additional grants and public support for the services so many depend on.

Because government funds are shrinking, many organizations are using  new methods to fund innovative programs including crowdfunding, and social enterprises and investors. We will begin exploring these sources in our next post.


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