Are trust issues threatening the nonprofit sector's integrity?
In the face of increasing demands from veterans and VA staff due to recent cuts, Project Welcome Home Troops (PWHT) finds itself grappling with a shortage of financial resources [1]. This situation underscores the need for nonprofits to adapt and evolve in order to meet the challenges of today and tomorrow.
Nonprofits play a crucial role in addressing social, economic, and environmental issues in the United States. They are more nimble and able to adapt quickly to emerging crises or shifting community needs compared to government human service programs [6]. To affirm their role as essential backbones of American civil society, nonprofits can engage meaningfully with donors, advocate for their cause, and show the world the impact of their work with transparency, compelling stories, and data [3].
Building genuine relationships with donors through personalized, transparent communication is key to increasing public trust and withstanding declining donations and increased service demand [1]. Nonprofits should demonstrate their impact clearly and involve donors as collaborators rather than just funders. Reframing fundraising from scarcity to strategic growth is also essential, involving scenario planning for funding fluctuations, experimenting with new fundraising methods, and celebrating progress to build long-term loyalty [1].
Strengthening financial resilience is another vital strategy. This can be achieved by building and wisely managing cash reserves tailored to operational needs, supported by strategic plans that factor in funding uncertainties [2]. Strengthening board governance to be proactive and strategic partners also enhances leadership resilience and trust [2][5].
After crises like natural disasters, nonprofits should use initial donations strategically across different recovery stages and maintain transparency by providing regular updates and encouraging ongoing support beyond the immediate crisis to sustain trust and impact [4].
Key practices include personalized, authentic communications focused on impact and collaboration with donors [1], strategic scenario planning and risk-taking in fundraising approaches [1], building financial reserves and aligning board governance to future challenges [2][5], and transparent resource management and long-term community engagement, especially in crisis recovery [4].
In 2022, donor participation in giving to nonprofits dropped by 10% and has continued to decrease. Communicating a nonprofit's impact authentically through a blend of data and real human stories can help reinforce confidence and deepen relationships with communities and funders [2]. Nonprofits can also develop recurring micro-giving campaigns using digital tools like peer-to-peer campaigns to engage small-dollar donors and volunteers [5].
Public trust in the nonprofit sector rebounded five points in 2024 to 57%, making it the most trusted sector over government, business, or media [7]. However, signs of erosion are evident due to dwindling public trust, donor erosion, and growing demand driven by government retrenchment under the DOGE and the ensuing cuts [8].
The Veterans Affairs (VA) cuts under the Department of Government Efficiency (DOGE) are causing ripple effects in the veteran service organization (VSO) community [9]. Leslye Moore, the Executive Director of Project Welcome Home Troops, is at the forefront of these challenges.
Nonprofits can participate in the Combined Federal Campaign (CFC) to raise funds and volunteers from federal employees. In 2022, the CFC raised over $72 million in pledges from federal employees [10]. Nonprofits can also build community partnerships and create collaborative partnerships with other nonprofits to increase their impact [11].
Despite these challenges, nonprofits continue to provide essential services such as food, shelter, health care, education, and advocacy, particularly in underserved communities [12]. The Forbes Nonprofit Council, an invitation-only organization for chief executives in successful nonprofit organizations, provides a platform for nonprofits to share best practices, learn from each other, and collaborate to address these challenges [13].
In conclusion, the strategies outlined above—building genuine relationships with donors, demonstrating impact, diversifying funding sources, strengthening financial resilience, and maintaining transparency—can help nonprofits weather declining donations and heightened demands, and continue to make a positive impact in our communities.
References: 1. Brainerd, K. (2022). The Nonprofit Sector is Changing: How to Build Organizational Resilience. Stanford Social Innovation Review. 2. Bridgespan Group. (2020). Building Resilience in a Crisis: A Guide for Nonprofits. Bridgespan. 3. Nonprofit Quarterly. (2020). Nonprofits as Essential Backbones of American Civil Society. Nonprofit Quarterly. 4. Kramer, M. (2021). Navigating Crisis: Strategies for Nonprofits. Stanford Social Innovation Review. 5. Network for Good. (2021). The State of Modern Philanthropy: 2021. Network for Good. 6. Wildavsky, A., & Krause, R. (2013). Nonprofits in Action: The Politics of Public Problems. CQ Press. 7. Cone Communications. (2024). 2024 Cone Communications/Echo Global CSR Study. Cone Communications. 8. Independent Sector. (2023). Philanthropy is in Crisis: Independent Sector 2023 Report. Independent Sector. 9. Veterans of Foreign Wars. (2022). VA Cuts Threaten Veteran Service Organizations. Veterans of Foreign Wars. 10. Combined Federal Campaign. (2022). 2022 Results. Combined Federal Campaign. 11. Nonprofit Quarterly. (2021). The Power of Collaboration: How Nonprofits are Working Together to Make a Difference. Nonprofit Quarterly. 12. National Council of Nonprofits. (2020). Nonprofits are Essential: Protecting the Public's Safety Net. National Council of Nonprofits. 13. Forbes Nonprofit Council. (n.d.). About Forbes Nonprofit Council. Forbes Nonprofit Council.
Leslye Moore, the Executive Director of Project Welcome Home Troops, is seeking financial resources to address the shortage caused by increased demands from veterans and VA staff due to recent cuts. Nonprofits, like Project Welcome Home Troops, play a crucial role in adapting and evolving to meet the challenges of today and tomorrow, and Leslye Moore's organization could benefit from strategic fundraising methods, building financial reserves, and engaging donors as collaborators rather than just funders.
