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Mary hung up the phone, stunned by the news that her nonprofit’s largest funder was dramatically reducing funding because of a change in giving focus. This funder’s annual gift, which comprised 60 percent of the organization’s annual revenue, was crucial to funding the non-profit’s renovations to its newly inherited building, making it safe for the public. This building, an unimaginable gift that had arrived twelve months earlier, would enable the historical society to revive its programs and better serve its community. Now the dream of its renovation seemed impossible, and the additional fixed costs that the building represented made it a threat to the organization’s survival rather than an opportunity for expansion.
Mary’s story is far from unique in the nonprofit sector; in fact, it is extremely common.
To fully engage with risk questions, nonprofits need to take an intentional approach and become more strategic in their consideration of their own business model—how mission and financial sustainability interact—and their specific contexts.
In a sector in which risk is inherent and uncertainty is a constant—particularly as we see more changes coming out of Washington—identifying and engaging with risk have never been more important for nonprofits. Not doing so undermines our sustainability, along with the well-being of the people we serve.