Anticipating today’s foreboding announcement about President Trump’s reductions in foreign aid, environmental programs and diplomatic funding, clients have asked me what to do now. For many nonprofits, and even some companies, federal funding constitutes half of an annual operating budget. Aid programs that improve the state of women’s health, childhood nutrition and security are among those that could be cut. Certain federally funded programs, like USAID’s Feed the Future or USDA’s Food for Progress, are necessary to ensure we, in the United States, have access to healthy food to serve our families and ourselves. Additionally, federally funded programs help build diplomatic capital, or in other words, ensure other countries have development infrastructure to advance and succeed, encouraging global economic prosperity and halting excess migration. These programs are critical, and a reduction in funding can be devastating.
Any nonprofit budget officer knows that an announcement of this magnitude must be met with months of preparation, forecasting different scenarios to avoid program shortfalls and quick delivery of replacement funding to ensure constituents relying upon this critical funding for shelter, food aid, access to water, security and education are not hurt by such cuts. Seeking new funding sources, and considering alternative partnership scenarios, will be critical to ensure nonprofits, companies relying on federal funding, and other organizations impacted by massive federal funding cuts stay afloat.
My recommendations are as follows:
(1) Find your place among the risks: As I have written about before, companies are increasingly mitigating risks throughout their operations and supply chains, both to ameliorate bad press, but also because it makes business sense to do so. Finding causes that support business decisions aligned with profit is a trend here to stay. Companies across the sector spectrum, from food and agriculture, to consumer goods, to apparel to manufacturing, are finding ways to “do well by doing good.”
Take the news yesterday for example, by General Mills, the makers of Cheerios, of a campaign to give away 100 million wildflower seeds to any individuals or organizations willing to plant them to “save the bees.” This initiative, in partnership with a medium sized organic seed company, is meant to #BringBackTheBees, which play a critical role regulating our food supply. General Mills recognizes that without pollinators, their costs of doing business, and sourcing honey as it grows increasingly scant, will be overly expensive. This effort to bring back the bees makes good business sense for General Mills, but it is a win-win, as it also improves our environment and natural resources at the same time.
Identifying solutions that add value to a big company, and helping them mitigate risks within their operational frameworks, will be a helpful way to add corporate funding to a nonprofit or small for-profit budget.
(2) Partner for a cause: The number of social enterprises (companies that seek a profit while also giving back to improve social capital) has risen dramatically over the last decade. There is even a Social Enterprise Alliance, helping social entrepreneurs gain valuable skills to succeed and thrive, both in mission and in profit. Social enterprises are often initiated with an idea that can both shift the traditional consumption market, AND make a difference while doing so. Inherent in a social enterprise model is therefore a need to give back to causes that deliver on the enterprise’s mission.
Many social enterprises are filling the natural products sector space, for example. At their annual Expo held last week in Anaheim, it seemed almost every brand had a cause with which it associated, leading marketers to scramble to catch up. In Emma Liem’s article for FoodDive, she listed “brand missions” as one of four key marketing trends for natural food products, and accordingly, that will mean a need to find partners to deliver on those causes.
Identifying ways to partner with social enterprises that align with a nonprofit mission or cause will amplify opportunities for funding.
(3) Collaborate around big money: As I reported after the MacArthur Foundation’s announcement to “retool“ its grant making efforts, foundations are becoming more proactive with their funding. Several big foundations no longer accept unsolicited proposals, and the number of funding categories is shrinking. This means that while nonprofits and other funding recipients should still count on foundation funding for the time being, they will need to be more innovative and efficient in their outreach and approaches. Coming to the table with a multi-faceted, collaborative concept to solving a problem posed by the foundation will be appreciated. This means that nonprofits may consider joining forces with complimentary nonprofits, reducing the costs of delivery, and being forthcoming around comparative advantage opportunities. Likewise, a nonprofit may approach one of its private sector partners to pose unique funding leverage scenarios to a foundation, built around existing programs of work that need scaling.
There are ample ways to identify prospective partners whose end game is the same, but whose approach may be a bit different. Making it easy for a foundation to fund this type of partnership by laying out the collective action born of the collaboration is key.
(4) Pledge allegiance to our flag (and others): While the U.S. Government may trim its support in areas of influence for aid practitioners and those working in environmental conservation, other governments may step up to fill in the gap. For example, Canada agreed to “plug the gap” after President Trump eliminated federal funding for global women’s rights programs by an increase of $650 million. Other governments have accessible funding programs, as well, that are open to international nonprofits and social organizations. For example the U.K. government recently announced funding increases to aid programs globally, as well as a more streamlined approach to dispersing funding so it is more accessible and impactful.
Finding opportunities to pair nonprofit (or for-profit) delivery mechanisms with other governments' budgets may be time consuming, but it will be worth it if it means more funding for existing and newly designed projects.
Do not discount the U.S. Government, however, even with reduced funding. Reductions in certain program funding may be temporary, and even for those that are longer term, we are facing a time where we must do more with less, be efficient and creative, and push our government to keep funding flowing where it is most needed – to help those that cannot help themselves.