This post offers an open and honest discussion on the state of the nonprofit sector and how funders can help organizations move from survival to long-term sustainability. Drawing on our experience at Scale Collaborative, I’ll share effective strategies and pathways forward to better support the organizations and causes you care about.
Understanding the current economic crisis facing the nonprofit sector
I’ve worked in the nonprofit sector for over 20 years, first on the frontlines, then for over 10 years as an Executive Director and Board member, and for the last decade at Scale Collaborative. As Director of Partnerships and Programs, I’ve worked with funders on crisis response, bringing the Thriving Non-Profits program across Canada. I also co-founded and serve as Board President of Thrive Impact Fund, which provides flexible capital to nonprofits, charities, and social enterprises in BC.
At Scale Collaborative, we help funders move beyond emergency relief by equipping organizations with strategies for financial resilience and reducing long-term funding dependence. Over the years, I’ve seen the sector through crises, stability, and growth. Now more than ever, nonprofits face unprecedented challenges, and funders are under pressure to balance immediate needs with sustainable impact.
What today’s nonprofit sector is experiencing
One thing is clear: nonprofits can no longer rely solely on grants, donations, and government contracts. The economic and political uncertainty we’re experiencing today has put unprecedented strain on nonprofit organizations, and the funding community is feeling it, too.
- Rising costs of goods and services while funding remains stagnant
- Government funding cuts that have not kept pace with inflation
- Ongoing financial impacts from the COVID-19 pandemic
- Persistent challenges in the arts, culture, and other community-building sectors
Let’s take a deep breath together, because this is hard. We recognize the weight of responsibility you carry, and we also see an opportunity: an opportunity to shift from temporary fixes to lasting solutions.
What we’re hearing from funders
Through our work with funders across Canada, we’ve heard key concerns emerge:
- Increased emergency funding requests: Funders are seeing more nonprofits in crisis, requesting immediate relief.
- Funding gaps left by government cuts: – With fewer public resources available, private funders are feeling the strain.
- Desire for systemic change: Many funders want to focus on long-term solutions but feel caught in short-term funding cycles.
- A lack of collaborative funding: Some funders feel like they are working in isolation on certain issues.
- Operational pressures on funders themselves: The same economic constraints nonprofits face are also impacting foundations.
As one funder put it: “We feel like we’re using a spoon to bail out a sinking boat.”
Moving from crisis to sustainability
St Scale Collaborative, we’ve found that the nonprofits we work with fall into three categories:
- In crisis: Struggling to stay afloat and in need of immediate support.
- Stable but needing support to grow: Seeking strategies to diversify revenue and sustain operations.
- Thriving: Ready to scale impact and invest in long-term success.
Each category requires different strategies, and as funders, you have the power to help organizations move along this continuum toward nonprofit financial sustainability in Canada.
Strategies for supporting organizations in crisis
Many nonprofits are currently facing a crisis. The need for their services has skyrocketed, while their financial resources are shrinking. During the COVID-19 pandemic, Scale Collaborative partnered with several funders to launch Survive and Recover, a program that supported 40 organizations in crisis. Through expert coaching, nonprofits learned to assess their financial reality, pivot operations, and create plans to stabilize their organizations. Many of these nonprofits not only survived but are now thriving.
Let’s explore some key strategies funders can use to support nonprofits that are facing crisis:
- Conduct Assessments: A structured assessment can help nonprofits identify their vulnerabilities and pathways forward. Scale Collaborative’s Survive and Recover program has successfully guided organizations through crisis by mapping survival and recovery plans with clear financial strategies.
- Support Pivots: Crisis often requires rapid adaptation. Funders can provide flexible grants that allow organizations to adjust their business models, explore new revenue sources, and build resilience.
- Facilitate Managed Wind-Downs or Mergers: Sometimes, the best path forward is consolidation. When nonprofits close, it’s critical to ensure their assets and programs continue serving the community. The Dandelion Model, used by Calgary Reads, demonstrated how an organization could proactively close its doors while redistributing resources to 15 other nonprofits.
- Remove the Shame: We must shift the narrative around closures. When an organization winds down, it’s not necessarily a failure, it can be a strategic decision to maximize impact in new ways.
Take Action: Our Survive and Recover program helps nonprofits navigate day-to-day realities in crisis, pivot their models, and prepare for recovery. This program offers group coaching, peer support, webinars, and expert guidance to help organizations stabilize and move toward financial sustainability. Contact us to learn more.
Strategies for supporting stable organizations ready to grow
Some nonprofits are stable but lack the capacity to grow. One of the most effective ways to strengthen these organizations is through revenue diversification. Scale’s Thriving Non-Profits program, run in partnership with funders, has helped over 400 organizations across Canada develop sustainable revenue streams. By challenging the belief that nonprofits must rely solely on grants, this program equips organizations with the tools to build financial independence.
Let’s explore some key strategies funders can use to support more stable nonprofits that are ready to grow:
- Encourage Revenue Diversification: Nonprofits need training and tools to move beyond grant dependency. The Thriving Non-Profits program helps organizations develop sustainable revenue strategies tailored to their mission.
- Promote Social Finance Tools:Many organizations are unaware of financial instruments like community bonds and impact investments that can support their growth. Helping them navigate these tools is key.
- Facilitate Access to Investment Capital: As organizations move toward asset ownership (such as purchasing buildings or launching social enterprises), they need guidance on capital stacking and investment readiness.
Take Action: Our Thriving Non-Profits program empowers nonprofit leaders with revenue diversification strategies and action plans through a combination of online learning, coaching, and peer support. Contact us to talk about bringing the program to your region.
Strategies for supporting thriving organizations
Nonprofits that are thriving are well-positioned to scale their impact, but they need continued investment and strategic support. For example, some organizations are ready to acquire community assets, but they need access to capital. Thrive Impact Fund provides patient and flexible financing to nonprofits across British Columbia, enabling them to expand their services and secure long-term sustainability.
Let’s explore some key strategies funders can use to support organizations that are thriving:
- Continue Investing: Just as thriving businesses attract investment, successful nonprofits should receive continued funding to scale impact. This includes multi-year funding commitments and strategic growth investments.
- Leverage Networks and Influence: Funders can help nonprofits access new partnerships, policy influence, and funding collaborations.
- Support Storytelling and Visibility: Sharing the success stories of thriving organizations not only inspires other nonprofits but also attracts additional funders and community buy-in.
- Help Organizations Acquire Community Assets: Thriving nonprofits are often in the best position to steward critical community assets. Catalytic capital, combining grants, social finance, and investment, can empower them to take on bold initiatives.
Take Action: Access to Capital is our four-part learning series designed to equip nonprofit leaders with the knowledge and tools to understand and access impact financing confidently. Contact us to talk about how you can help the organizations you support learn how social finance can their support long-term sustainability and growth.
Take Action: Thrive Impact Fund provides flexible, patient capital to impact organizations and social enterprises in British Columbia, helping them scale and sustain their positive social, environmental, and cultural impact. Contact us to learn how you can invest in the organizations you support.
A Call for Courageous Funding
At Scale Collaborative, we focus on moving beyond emergency relief to help equip nonprofits with strategies for nonprofit financial sustainability in Canada. But we also recognize the immense pressures facing funders. You are on the frontlines, balancing limited resources, rising demands, and the desire to create systemic change.
If we want to strengthen the nonprofit sector, we must also be willing to ask: “Is our current funding model creating the impact we want?”
The foundation model has been in place for decades, but today’s challenges require new approaches. It is both daunting and exciting to rethink the ways we fund social impact and intentionally funding capacity building that will make our nonprofits stronger and more resilient. Economic and political uncertainty may make change feel risky, but courageous funding is about embracing risk in the service of lasting change. Together, we can move from scarcity-driven emergency responses to funding strategies that build strong, sustainable nonprofits and resilient communities.
Let’s take that next step forward, together.
About the Author: Kristi Rivait is the Co-Founder of Scale Collaborative, Thriving Non-Profits, and Thrive Impact Fund. With 20+ years of nonprofit leadership experience, Kristi specializes in operational transformation, revenue diversification, and partnerships that drive systems-level change.
This blog is part one of a two-part series. In part 2, Kristi will talk about how funders can look at their own operations and explore ways to integrate strategies that support building thriving communities.
