Podcast Summary: Nonprofit Lowdown Episode #326 - "How to Elevate Your Fundraising with Your Team"

Release Date: February 24, 2025

Hosted by Rhea Wong, Nonprofit Lowdown is a go-to resource for nonprofit professionals seeking the best ideas, resources, tools, and strategies to optimize their organizations. In Episode #326, titled "How to Elevate Your Fundraising with Your Team," Rhea addresses the pressing concerns surrounding federal funding uncertainties and offers a comprehensive playbook to strengthen and diversify nonprofit revenue streams.

1. Understanding the Current Landscape

Rhea Wong opens the episode by acknowledging the heightened anxiety and stress felt by nonprofit organizations due to uncertainties in federal and state funding. She highlights the political turmoil, mentioning influential figures like Trump and Elon Musk, who are causing shifts in federal funding priorities. Rhea emphasizes that while fears are valid, federal funding is still present and not immediately diminishing.

"You are not at the mercy of Washington. Federal funding for now is not going anywhere."
— Rhea Wong [02:30]

She outlines three main challenges:

• Political Uncertainty: Potential dramatic shifts in funding priorities.
• Delayed Approvals and Disbursements: Even secured grants might face payment delays, affecting cash flow.
• Increased Scrutiny: Organizations, especially those involved in DEI (Diversity, Equity, and Inclusion) initiatives, may face more paperwork and restrictions.

2. Conducting a Comprehensive Financial Analysis

Rhea stresses the importance of nonprofits understanding their financial health to navigate potential funding gaps proactively. She delineates a step-by-step approach:

Step 1: Assess Your Funding Sources

• Action: Review the last 12-24 months of financials.
• Goal: Categorize revenue streams (federal grants, individual giving, foundation grants, etc.).
• Red Flag: If over 50% of revenue is from government sources, it's time to diversify.

Step 2: Identify Fixed vs. Variable Costs

• Fixed Costs: Salaries, rent, insurance, technology—expenses that remain constant monthly.
• Variable Costs: Events, marketing, program supplies—expenses that can be adjusted or cut if necessary.

"If more than 50% of your revenue comes from government sources, this should be the fire under your butt to rebalance your portfolio."
— Rhea Wong [15:45]

Step 3: Forecast Your Cash Flow

• Assessment: Determine how many months of runway you have if federal grants are delayed or lost.
• Action: Aim for a reserve fund covering at least three months of expenses; ideally, three to six months.

Step 4: Use Your Numbers to Tell a Story

• Strategy: Present financial data alongside a compelling narrative to illustrate what's at stake.
• Objective: Make the financial reality tangible to donors and board members, encouraging increased support.

"When you show them what's at stake and you tie a narrative to it, it makes it a little bit more real and perhaps will encourage them to step up to the plate."
— Rhea Wong [19:10]

3. Strategies to Hedge Against Federal Funding Uncertainty

With a clear understanding of their financial standings, nonprofits can implement strategies to create financial stability:

1. Strengthen Your Major Donor Program

• Importance: In times of reduced federal funding, individual donors become crucial.
• Actions:
  • Identify and engage the top 20 donor prospects.
  • Use conversational language in communications, such as, "Would you be opposed to a meeting to discuss how we might face this challenge together?" to encourage dialogue without pressure.

"People do respond to a crisis like we can. Over the years, any major crisis has actually been a catalyst for giving."
— Rhea Wong [23:50]

2. Build a Recurring Revenue Stream

• Goal: Establish a predictable income through monthly giving programs.
• Approach: Encourage small, consistent contributions (e.g., $10/month) which accumulate significantly over time.

"If you're asking someone to give a $10 a month gift, that's $120 by the end of the year."
— Rhea Wong [28:30]

3. Explore Alternative Grant Funding

• Focus: Shift from federal to private foundation grants.
• Tips:
  • Engage in prospecting and relationship-building with program officers.
  • Stay informed about philanthropic trends through resources like Chronicle Philanthropy and attend relevant roundtables.

4. Engage Your Board in Fundraising

• Challenge: Boards may be disengaged due to lack of fundraising experience or comfort.
• Solution: Rhea offers a free live board training on March 4, focusing on major gift fundraising to empower board members to become active fundraising allies.

"Never let a good crisis pass. I'm going to assume your board cares about you."
— Rhea Wong [32:15]

5. Create a Cash Reserve Plan

• Objective: Accumulate a reserve covering three to six months of expenses.
• Strategy: Allocate 5-10% of each major gift towards the reserve fund and include it as a line item in the annual budget.

"When I created my annual budget, I put in a budget line for the reserve fund so that I knew that I was purposefully putting away money for a rainy day."
— Rhea Wong [35:40]

4. Mindset and Emotional Regulation for Effective Leadership

Rhea delves into the psychological aspects of managing a nonprofit during uncertain times. She explains how fear and anxiety can trigger the amygdala, leading to fight, flight, or freeze responses. To counteract this, she offers practical techniques to engage the prefrontal cortex, promoting calm and strategic thinking:

Techniques:

1. Box Breathing: A method used by Navy SEALs involving controlled inhaling and exhaling to regulate the nervous system.
2. Identifying Emotions: Naming the emotion (e.g., "I feel anxious") rather than stating it as an identity ("I am anxious") helps in distancing and managing feelings.
3. Byron Katie’s "The Work": A self-inquiry process that challenges and reframes disruptive thoughts, aiding in reducing anxiety.

"A couple things that you can do in order to calm the nervous system down and get into the executive function of your prefrontal cortex..."
— Rhea Wong [38:20]

5. Recap and Call to Action

Rhea concludes the episode by reiterating the critical steps nonprofits must take:

1. Conduct a Financial Analysis: Understand current financial standings and identify areas for diversification.
2. Prioritize Major Donors: Focus on top prospects and secure multi-year commitments.
3. Engage the Board: Encourage board members to participate actively in fundraising efforts, utilizing available training resources.

She emphasizes the importance of moving from reliance on federal funds to building sustainable, independent financial models.

"Let's stop waiting for federal funding to save us and start building organizations that are strong, sustainable, and independent of Washington's politics."
— Rhea Wong [50:10]

For additional support and resources, Rhea invites listeners to visit her website, riawong.com, to sign up for the upcoming board training on March 4 and explore her Big Ask gift program designed to elevate fundraising efforts.

Conclusion

In this compelling episode, Rhea Wong equips nonprofit leaders with actionable strategies to navigate the uncertainties of federal funding. By advocating for financial diversification, strengthening donor relationships, engaging boards, and maintaining emotional resilience, she provides a comprehensive roadmap to ensure nonprofits not only survive but thrive in challenging times.

If you found this summary helpful, consider sharing it with your board, executive director friends, or fundraising team to bolster your nonprofit’s fundraising efforts.