We would never ask for-profits to do what nonprofits are expected to do as a matter of business as usual. These divestments threaten program delivery, community impact, and an organization's ability to raise funding.

Foundant, maker of the GrantHub grantseeking management software that KDS uses to track and research funding opportunities for our clients, underwrites GrantStation’s State of Grantseeking Report each year.

One thing that jumped out at us from their latest report was the extent to which non-profits are often forced to reduce program and organizational overhead and staffing costs. According to the report, 44% of 3,473 surveyed nonprofits reported having to reduce services and programs to control their indirect/administrative costs – staff reduction was the second most frequently used technique at 42%.

This is one of the major factors at the heart of what keeps non-profits from thriving. The extent to which not-for-profit businesses have to weaken their own operations during tough financial times is counter-intuitive to best business practices. Investment in critical areas of business, including marketing and fund development, developing new lines of revenue, and sustaining program staffing, is necessary to stabilize and strengthen all types of businesses, including non-profits.

We would never ask for-profits to do what nonprofits are expected to do as a matter of business as usual. These divestments threaten program delivery, community impact, and an organization’s ability to raise funding.

So, what’s the solution? New lines of revenue? Investments and endowments? Greater flexibility and responsiveness on the part of the philanthropic world to provide general support instead of program-restricted support?

When times get tough, how does your organization get tougher? And is it working?

Read the full grantseeking report here.