Ep. 134: Funding Red Flags: When Grants Disappear & Other Signs Your Strategy Needs a Shift
EPISODE 134
Funding Red Flags: When Grants Disappear & Other Signs Your Strategy Needs a Shift
About the Episode:
Grants disappearing overnight? Funding feeling more uncertain than ever? If the recent federal grant freeze had you panicked, you're not alone. Traditional nonprofit funding strategies aren’t as secure as they once were, and it’s time to rethink how your organization brings in revenue.
I’m breaking down the biggest funding red flags I’m seeing right now, why social media without conversions is a giant waste of time and money, and where you should be reallocating your budget to bring in bigger, more sustainable donations. Plus, I’m talking about influencer-led campaigns (yes, even for small nonprofits) and why they’re one of the most effective fundraising strategies today. If you’re ready to stop relying on unpredictable grants and donor cycles and start building funding momentum that lasts, this episode is a must-listen!
Here’s what you’ll learn:
The recent grant freeze and why relying too much on one funding source is risky
How a heavy dependence on major donors, grants, or one big event can put your nonprofit in danger
The real reason why your social media strategy isn’t bringing in donations—and how to fix it
Why keeping low performers (or outdated strategies) is costing you more than you realize
The truth about PR and marketing agencies—why they won’t magically unlock donor dollars
How influencer partnerships and Social Street Teams® are changing the fundraising game
Where to reallocate your budget for maximum impact (stop overspending on things that don’t work!)
Why fast, digital-first fundraising strategies are the key to sustainable revenue growth
Think you’ve reached out to “everyone” in your network? Out of ideas to get noticed and get funded? Generate leads for your nonprofit or social impact business: https://www.splendidcourses.com/prospect
Christina’s Favorite Takeaways:
“I don't like you to spend a lot of extra people power, staff power, and extra dollars doing things that may or may not get awarded to you.”
“Has your social media brought in any fundraising dollars?”
“Pretty posts don't pay the bills.”
“You need to stop paying for low performers.”
“Press release will not fix your problem.”
“A major donor does not come from a press release.”
“Grants are unreliable and out of your control.”
“The fastest and most effective way to create sustainable funding is through individual, private donations and influencer-led campaigns.”
“If you don't know any influencers, you start with the micro-influencers in your community.”
“Your nonprofit doesn't have a funding problem—it has a reallocation problem.”
Episode Resources:
FREE Resources from Splendid Consulting:
How to Work with Christina and Splendid Consulting:
Connect with Christina and Splendid Consulting:
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Christina Edwards 0:00Welcome back to the purpose and profit club Podcast. I'm so excited to record this episode first, I just want to say hi and hello and thank you to so many of you who have booked sales calls with me with this rose recent launch. It's been such a joy to meet so many of you and connect with so many of you and listen to the deep and important work that you do. There are times on these calls where I leave and I feel like I just can't be any more grateful for this sector, like it just is over flowing. So it really is a treat to meet with so many of you. So thank you. Thank you. Thank you. Thank you for listening to the podcast. Thank you for your kind words about about our work and about this this show, it felt really good to receive too
today we're going to talk about the wild world that we live in now, the wild world that was January and the just tumultuous times that the most recent kind of grant funding, the federal funding that was paused in January with The new administration, and then kind of paused and frozen, and then the grant funding was was un paused, and you could access it. And the word that is coming to mind for a lot of organizations who are heavily reliant on grant funding was amid stress, was uncertainty, like what is happening, what's happening, what's going on? Everything feels really uncertain. And even if you're not heavily reliant on grant funding, that that feeling of uncertainty, like I don't even quite know what's happening, I've been hearing a lot of so we're going to talk a lot about that. We're going to talk about grants disappearing. We're going to talk about, are they reliable anymore? And other signs that I'm seeing that your strategy needs to shift. Because, like I said, I've talked to so many of you lately, and there is a through line. There is a commonality that I'm seeing. There's a trend line of things that you need to sunset, things you need to do more of, and things that maybe weren't, that were reliable sources of funding that just aren't anymore, and grant funding, foundational funding, those were like tried and true. Historically, I'm using air quotes, safe ways to to get funding, get revenue for your nonprofit. It felt like you know they'll always be there for us, right? Christina, we just need to figure out how to get awarded more grants. But like the fundings there, and what we saw in this past month was not so fast. They literally, the faucet was shut off, and that left organizations not being able to make payroll. That left organizations shuttering programs temporarily. That left a lot of people in a situation that I never want your organization to be in. I never want your organization to be in a situation where you are so heavily reliant on one source that when that source has a pause, a lapse, a shut off or just leaves, suddenly you got to close doors. So for a lot of organizations, this was a big warning sign, okay? And if that's you, like, you're not in trouble. I just want to open up another opportunity so that never happens again. Okay? That never happens again. I was talking to my husband about this, because he's not in our world, and we were talking about it, and I he was like, Okay, well, why are grants bad? And I was like, no, no. Not bad, not bad. And I was like, here's what, here's what I would liken it to, because he works with a lot, with a lot of E commerce and small businesses. And I said, Imagine you were looking at a small business that does 3 million in revenue a year, and they were profitable. Everything looked great. It made a lot of sense. They we were seeing growth. And then I told you, most of that $3 million a year is being funded by one customer. You with me, that one customer is buying up all of the products. How would you feel if that customer just decided to pause overnight and just decided to leave and just decided to take a break. What would happen to the business? He's like, Oh my gosh, that's putting all of your risk in one pile. I was like, That's it. That's what we're talking about. He's like, I got you. I got you. That totally makes sense. So if your organization is heavily reliant on one donor, and we see this with major donors, where you're like, listen, those three donors, that one donor, that one event is make or break it, then that's how this looks. It could be grants. It could be something else. Okay, so that's why it's really, really important to sort of go, Is this really safe and secure, or is this giving us a false sense of security? Is this giving us a dependent relationship that if something were to change in uncertain times, we're in trouble. We're in trouble. Here's the other piece. Here's the other piece with grants. Here's the other piece with major donors, slow moving, unpredictable, subject to political decisions, subject to inflation, subject to economics, right? Subject to a lot. I don't like you to spend a lot of extra people power and a lot of extra. A staff power and a lot of extra dollars doing things that may or may not get awarded to you. So grants are a great example of that. You spend all of this money applying for grants. You hope you get the grant, only to find out maybe you got one out of 10, and then that one you got is for a super restricted use case. You can only use it in this way, but you can't use it for this operational expense. You can only use it for this programmatic expense. It puts you into a box. I remember my kids preschool saying during one of the parent meetings, we were granted all of this money, and we were able to buy, you know, these fancy they were able to buy these like a Vitamix blender and some other fancy tools for their kitchen, and they're like, but no one uses it because they didn't have the staff to, like, serve smoothies and make soups and all of the things for the children. And so it was like, this weird thing of being like, well, we got awarded this grant, but actually the cost of using the grant in which the grantee tells us we have to use is really hard, and then you have to spend the time reporting back on the grant. Okay, so we're going to talk about today some other ways that you can bring in new funding, and then some other sources, and then some other red flags that I'm seeing just kind of persistent in the most recent kind of cohort of calls and emails and DMS that I've been getting. So there's some hidden warning signs, and this is a conversation to bring to your leadership, because the leadership oftentimes is saying, top down, this is safe, this is secure, this is best practices. This is how to grow our business. We are our organization. We need this type of consistent, reliable funding, like foundation relationships and grant relationships, and spending a lot of time wining and dining this one donor and this January was a test run, a trial run on why that's not true, why that's not true.
So here are three more big funding red flags that I've been seeing. The first one you're paying for social media, and there's not ROI. So here's the good news. The good news is, y'all social media is looking pretty good. I check out your Instagram. You are very proficient in Canva, you're doing reels and video, and it's looking good. And then I say to you on a call, you and I are talking, and I say, Tell me about your social media. Oh my gosh. Our social media person is awesome. They really like it. They really like what I do, what we do. They're really invested. And I think our content is really fun. Cool. Has it brought in any fundraising dollars? Silence, no. Has it helped your blah, blah, blah campaign, has it helped your membership drive? Has it helped your program enrollment? Has it helped bring in new monthly donors? Big, zero, quiet, silence, no, okay, so we need to do like. We need to do it a check in. Okay? We need to check in if you're investing in content creation, social media management, ads, etc, resources and time, but no fundraising revenue is coming in from that or no, no action is coming in. No result of that is the result you're looking to see increased enrollment, event, sales, etc, is happening. That is a red flag. The channels look great, but that's where the success stops. This is not about vanity metrics. This is not about vanity esthetic, like we look pretty, right? Pretty posts don't pay the bills. So if you're spending money on social but zero conversions, it's time to pivot your strategy. Now, the way that I want you to pivot your strategy is this. We're going to flip your social strategy. So instead of, you know, 80% of your social coordinators time doing all of this, content creation, management, etc, I want their time to being ambassador, influencer, street team, outreach, mobilizing their street team to start a campaign. That's what we teach in the club. Then 20% of your time can be creating those lovely graphics and social posts that 1 to 10% of your audience sees anyway. That's important. We can have it. It's kind of like having your website. You need your website. We need that. But do I want you to pay somebody to make your website beautiful seven days a week and put new website updates out seven days a week? Not really, not really when only a small fraction of your audience is seeing it anyway.
And if you're one of the organizations that is like, I'd love to join the club, but, I'd love to join your new program, Christina, but I would love to buy one of your courses, but you. We can't afford it. Can I tell you, the money is sitting here in other areas that need to be reallocated. The funding is there. You need to move money around, and you need to stop paying for low performers. So I'm not picking on my social media managers. Can I shift gears? I was on a call with another organization, and they had a part time development person. Great. Tell me about what that development person has accomplished in dollars and cents, not a whole lot, not a whole lot. Actually, they're upside down. It costs us more than what they're bringing in. Red flag, okay. Now here's the thing, if you're hiring somebody fractionally, or you're hiring somebody at more of a junior level, oftentimes, and especially if your organization is under in a million, oftentimes, it's not their fault, okay? So if they're at a junior level, then they need to be like, onboarded luxuriously with great SOPs and a very clear directive. And that may not be the case for your organization if you're under a million, because they may not be there yet, right? There is no it's a little bit of like, I don't know, fly by the seat of my pants, right? I'm just gonna do some donor, ouch, reach, I'm gonna do some marketing, and I'm gonna send some emails and hope that it works. That is not a strategy. So what we do in that case is we have that development person go through our program, that person go through our curriculum. Now we've capacity built. We built them up to speed. Now we give them 60 days and we say, okay, has it changed? Has the result they're creating that they're here to create change? Has it improved? If it has beautiful, great, let's continue to give them coaching. If it hasn't, it's time to find the right person for this. So this is not about I love them. I love their energy, and they're really great. Okay, cool. But are they actually performing the result that you're hiring them to do? Okay?
Here's another big one. The board thinks we just need to hire a marketing agency or a PR team to get the word out that'll fix everything. Okay? And let's, let's look kind of like back into that. What does a marketing team or a PR agency do? So a PR agency, this was, this came up a lot on my webinar when I was talking about influencers, influencer marketing. So a PR agency has their own network of influencers that they go to the same pool again and again and again. So you're going to pay a PR agency, 5000,10000 a month on retainer so that they can write a press release one time, upload it to a news wire that's not helpful, and then go to their same pool of influencers and pay to play in a very transactional way to talk about your organization that is not a street team, that is just bought and Sold ads, okay? That is not heart centered, that is not matching purpose with social good. That is not it at all. And if your board wants you to hire a PR team, you better have a good reason. Why are you rolling out a new partnership with LeBron? Okay? That might be press worthy, right? Are you doing something that is true? Press Release worthy? Because a press release will not fix your problem. I've sat on a lot of calls. I'm thinking about a couple, a couple more historically, where they're like, can you write a press release about this? And it's like, I can. But why? What are we accomplishing with the press release? Oh, well, we want to. We want to. We want to get more program enrollment. We want to get more major donors. Y'all, a major donor does not come from a press release. Okay? We want to get new monthly donors. That's not going to come from a press release. Okay? So it's really important to make sure that you're not just throwing that you think throwing this over a wall to an agency is going to solve your problem. Press coverage, hiring a marketing firm will not magically unlock donor dollars. The calls coming from within the house, right? It has to start with you. Agencies produce deliverables, but not donor relationships. Okay? Leads don't equal conversions, and without a follow up plan, it's just putting it out there and kind of wishing and hoping. So if you're spending money or thinking about spending money on outside firms instead of funding donor center strategies, you're solving the wrong problem. And in fact, if you're if your board is thinking about doing this, say, if we're going to spend $20,000 in a PR firm and a marketing team for a rebrand, can we actually do this instead first? Because a social street team is scalable, can we do this instead first? So we know we are actually activating the people within our network, our followers, and converting them into super fans and funders.
so I think it's important to remember that grants are unreliable and out of your control. They can be a part. Part of it's like you're baking a cake. They're part of the cake, but they a flower alone won't make a cake, right? It takes other things, social media. PR, look good on paper, but don't always convert. I want you to be on social media. I want you to get written about in the news, but throwing it over the wall to an agency and expecting a strong ROA is not how we do it, it's not how we do it. It's not how you should either. That's not how you double your next fundraiser. That's not how you bring in 50 new donors. That's not how you get 100k in new funding. Okay, keeping low producers around is costing you growth, and sometimes that's a hard truth, right? That's a hard truth of realizing that maybe you don't have the right person in the role. But before you decide that, I do want you to ask yourself, have I given them the tools to succeed? Do they know a better way? Have they been properly trained? If the answer is no, have them go through our program, have them go through our coaching, have them go through our courses. Then make that decision the fastest and most effective way to create sustainable funding now is through individual, private donations and influencer led campaigns. It's not through some sort of long cultivation cycle. It's not through long term foundation relationships. It's not through a legacy giving which takes years and years and years to see that and that gift. It's not through endowments. It's not through any of that. You know, I was sharing a lot of examples on this most recent webinar. And you know, we look at things like the Ice Bucket Challenge, which raised two 20 million in eight weeks, right? We look at things like Twitch streamers that have raised millions of dollars through charity campaigns, in live stream campaigns in a week at a time, we look at things like charity waters birthday campaigns, which one person for their birthday campaign has they have multiple people who have raised over a million dollars as a solo birthday campaign. We look at things like Brooke eby, who is such a champion for ALS, who herself has raised over $70,000 for for ALS research in collaboration with Salesforce, her employer. Come on such a good collaboration. We look at things like test bones live stream as a Swifty, bringing in other Swifties, who raised 60k for the rainbow railroad, who raised over 30k for domestic violence. These are in collapsed timelines. She did that in less than a week. So yes, 60k through one individual donor or one grant is cool and all, but bringing in 60k through 100 new donors in less than a week, you cannot beat that. You cannot beat that. And why are you trying to chase the slow, uncertain money when this is right here, waiting for you, this is right here waiting for you. The fastest and most effective way to do this is through individual private donations, influencer partnerships with influencers and creators is $127 billion economy, and you can start this small. You can start this with micro influencers. You can start this with just pure fundraisers and ambassadors, but they're right here. They're all around you. Fundraising isn't always about just visibility. It's about conversion. And that's the piece with the social media that really like, you know, it really irked me is it's not just about putting your content out there and hoping that everybody sees it. If I stand outside my front door right now and start shouting, everyone within I don't know, a block will hear me, that's it. But if me and 10 other neighbors start shouting and we're at different blocks in our neighborhood, suddenly we have a little bit of a ripple effect. We got some momentum, right? That's what you need. You literally need that digital momentum.
And here's some questions that I've been hearing lately. Where do I find them? Will this even work for me? We've had educational institutions, we've had we've had youth empowerment, we've had animal rescues. I've had all sorts of people say this won't work for my cause area, and that's just not true. Y'all. It's just not true because all three of those buckets I just named, we've worked with clients that have had all of those. Oh, but we're International. Oh, but we're all virtual. That is not a problem. You know, who's all virtual? That creator with a million followers on Tiktok, that person's all virtual too, right? So it's matt. It's the first step is figuring out that audience alignment. We teach a process in the club to do that. If you're thinking, what if I don't know any influencers, you start with the micro influencers in your community, kind of like with grants. If you think about this, you're like, where do we even start with federal grants? Which ones would we even apply for? Right? You're like, Okay, well, what makes the most sense? What's the low hanging fruit here? Where's the who are the warmest opportunities for this? And that's similar to what you're doing here. It's not throwing spaghetti at the wall. Now if you're thinking, my social media presence is too tiny, perfect, this isn't about your follower account. Remember the domestic violence shelter I told you about earlier. They didn't have tons of followers. They weren't sitting at 50,000 followers. They had less than 3000 it wasn't about their audience size. It was about the audience size of their ambassador, of their advocate, of their person championing this nonprofit, this mission. If you're thinking, my team is too small, your team is too small. Influencers bring in their own audience. You don't need extra staff for this. In fact, you're probably contracting out or currently have staff that could be allocated for this. This is higher ROI that grant writer, somebody was saying, like, yeah, you're paying a great writer to write this grant for $5,000 you don't even know you're gonna get and if you get it, it's not it doesn't compound. It's one and done. If you get it, then you gotta pay the great writer a report on it. It's like, why are we doing the things we're doing? Have we stopped to ask, is there a better, faster way? And that's the part of me that loves the for profit sector so much, because that's a question they ask themselves every single day. Is there a better faster way? Is there a better faster way? The answer is yes. There's a better, faster way. That's why we invest in tech, that's why we invest in automation, that's why we innovate. That's why an organization like Charity Water has collapsed their timeline and seen so much growth in such a short period of time. That's why they're $100 million organization, and really just getting started. They went digital first. They went Ambassador first. They went bold school, not old school. In their storytelling, they were willing to create their own path. They said, All right, we are a nonprofit. But here is the nonprofit Highway. We're not going on that highway. We're gonna go build another high we're gonna build a road. We're gonna go in on a dirt road instead. I see no one else has carved this dirt road path very much. And we go, that's how you do it.
Speaker 1 22:02
I'm and
Christina Edwards 22:10
if you're thinking this sounds too complicated or out of reach for us, or too expensive or maybe later, you already have potential donors in your network. You just need a strategy to convert them. You just need a strategy to upgrade them. You already have wasted budget that could be redirected towards real results. That's a hard truth, right? You've already thrown good money after bad What do you want to do instead this year? You already have the ability to build funding momentum. You just need to shift focus. I'm thinking about another executive director I talked to, and I was like, Oh, you're so close. You've done so much now it's like, in a hit we're going to add fuel to the fire, right? This is the next layer. I've worked with organizations that have reallocated funding from low performing marketing agencies, grants, tactics, teams, stagnant social media efforts, and put it into strategic fundraising systems. This changes everything from birthday fundraisers to micro influencers, partnerships. This strategy scales fast without needing a big team or a giant budget, without needing a bunch of grant writing contracts, without needing contractors, without needing a bunch of long term donor cultivation, fancy gala events. We didn't even get into events. But by the way, why don't you pull money that you're spending on flowers and food for your event that barely nets anything and costs you a lot of time. And try this instead. Pull some time. Pull the time from the staffer who is absolutely overwhelmed with planning that annual gala that it has turned into a time suck. Take that off their plate, or take some of it off their plate, and invest in these strategies now.
So if grants are pausing, disappearing, influx, whatever they are in the future, if social media, the algorithm feels so hard. I was looking at a social media report about last year, and we saw an Instagram we saw on a couple social channels, some decline in engagement, some in decline and visibility, I get it, and it feels hard if sinking money into PR firms, if sinking money into other kind of fractional help isn't working, it's time to shift your strategy. So very often, your nonprofit doesn't have a funding problem. It's a reallocation problem. Where do we want to really reallocate two things, the time, the staff time, and the money, the resources, the money we're spending and the time right. Where do we want to reallocate that? So if you're ready to stop spinning your wheels and actually grow, I want you to book a call with me. Book a call with me. You can click the link in the show notes and lets Talk. In the meantime, I am here. I am sending you virtual high fives and hugs. I know it has been a challenging, weird time with this federal cycle on, off, snip, snap, snip, and I'm very, very hopeful that gets resolved and that doesn't happen again. In the meantime, I am also very, very hopeful that you put your organization in a position where it is no sweat. If it does, I'll see you next time you.