Over the past few years, not-for-profit organizations have navigated choppy waters, riding the relentless waves of the pandemic that continue to crash onto our economic shores. An unexpected low tide was marked when it was recently announced that charitable donations dipped in 2022. In addition, inflation continued to push prices, and high interest rates persisted.

As we swing into the second half of the year and face a potential uptick, it is more important than ever for not-for-profits to recalibrate, adopt innovative approaches, and safeguard their liquidity. In the following article, we will delve into a selection of these strategies that your organization can consider, turning this crisis into an opportunity for growth and resilience.

So, hold fast; we're navigating these troubled waters together.

Look at Tax Strategies

Sometimes, in the complex world of taxes, opportunities can slip through the cracks. For not-for-profit organizations, one such chance lies in the Commercial Buildings Energy-Efficiency Tax Deduction, also known as Section 179D. This tax break is more than just a financial boon—it allows your organization to reduce its carbon footprint while bolstering its financial health.

Whether building a new facility or renovating an old one, Section 179D can be valuable. This opportunity became even more attractive last year thanks to the Inflation Reduction Act (IRA), which extended the 179D tax deduction to not-for-profit organizations—a significant development. It also increased the deduction amount significantly, from $1.88 per square foot to $5.00 per square foot.

Another tool that should be considered is the Employee Retention Tax Credit (ERTC). Many not-for-profits are eligible for this, but they might not be aware of it. There's still an opportunity to seize this credit, but that window is narrowing.

The ERTC is a payroll tax credit based on quarterly wages paid during 2020 and 2021, and eligibility is determined in two ways:

• A decline in gross receipts
• Whether an organization experienced a full or partial suspension during the pandemic

However, while the benefits of this credit can be substantial, it's not straightforward to apply for it, mainly due to more than two years of changes and updates. Incorrect or risky filings can lead to severe consequences from the IRS, making it critical for your organization to work with experienced professionals who can help them understand the nuances of the credit and ensure that their filings are accurate and compliant.

Improve Your Grant-Writing Skills

As a leader in the not-for-profit world, you're aware that grant funding can significantly bolster your organization's financial standing and reputation. But securing a grant isn't a walk in the park — it's a demanding process with high competition and a low success rate.

Here's a snapshot: every day, about 2,700 grant proposals are submitted, but fewer than 200 will secure funding. Despite these odds, don't lose heart. There are many ways to strengthen your grant-writing approach and improve your chances of success. Let's delve into these strategies.

• Find the Right Fit: It’s essential to find grants that align with your organization’s mission and goals. Rather than casting a wide net and applying for every grant available, invest that time in identifying the ones that truly resonate with your organization's work and needs. This targeted approach can increase your success rate and save valuable resources.
• Understand your Funder: Research the funding organization thoroughly. Understand their mission, their previous grant recipients, and what kind of projects they prefer to fund. This will help you tailor your proposal to meet their interests and increase your chances of success.
• Be Clear and Concise: Grant reviewers often have to read through dozens, if not hundreds, of applications. Make their job easier by writing clearly and concisely. Avoid jargon and use plain, persuasive language to make your case.
• Demonstrate Impact: Show the potential funder how their money will make a difference. Use compelling stories, data, and evidence to illustrate the impact of your work. Highlight past successes to show your track record. Most importantly, don’t make inflated claims because those will likely be exposed.

Remember, each grant is a learning opportunity. With each application, your understanding of the process will deepen, improving your chances of success in future applications.

Embrace Small Donations

In the not-for-profit landscape, every little bit counts. With large-scale donations from individuals declining, it’s time for not-for-profit leaders to focus on smaller, individual contributions. These may seem insignificant, but they can add up to a substantial amount.

Each small donation is like a building block, contributing to the foundation of your organization's financial stability. This approach not only diversifies your funding base but also reinforces a sense of community engagement and support, demonstrating that the strength of many can indeed outweigh the power of a few.

Some ways to kickstart your small donation efforts include crowdfunding campaigns, text-to-give campaigns, subscription donations, virtual fundraising events, donation matching via corporate sponsorships and social media challenges.

Rethink Your Main Gala

Almost every not-for-profit organization has that one big event they eagerly plan from the moment the last one concludes. However, hidden within this cornerstone lies a goldmine of untapped fundraising opportunities.

Instead of simply relying on the main event, consider expanding your horizons with a series of smaller breakout events leading up to the grand affair. Embrace the virtual realm and engage potential donors with exciting activities that build anticipation, such as informative roundtable sessions to educate participants about your organization's mission. Inject a dose of thrill and anticipation through fun contests that stir excitement for the main event. Or, gather community leaders for a forum discussing hot topics related to your cause.

By thinking outside the box, you can transform your once-a-year gathering into an immersive and extended experience that will captivate donors and supporters, drawing more interest in your mission.

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