Inyathelo, a long-standing South African nonprofit organisation (NPO) which helps other NPOs to build capacity for long-term financial sustainability, has urged local NPOs to review and professionalise their funding strategies.

This comes as many NPOs, particularly in the health sector, are grappling with American funding uncertainties since the inauguration of President Trump. The US government is the single largest global humanitarian funder, giving $13.9 billion in 2024, and is the largest supporter of United Nations agencies.

“We understand the anxieties and uncertainties that arise during times of funding challenges, particularly in light of the recent ‘pause’ on United States Agency for International Development (USAID) funds,” says Inyathelo acting executive director Feryal Domingo. “We recognise the significant impact this can have on NPOs’ vital work and the communities they serve.

“During these times, it's crucial to remain calm, focused, and proactive. While the situation is evolving, concentrating on what can be controlled is key.”

Inyathelo offers the following tips:

• Stay Informed. Keep abreast of developments, specifically regarding the USAID situation, but also concerning other funding opportunities. Reliable information from reputable sources is crucial for making informed decisions.
• Diversify funding streams. Explore alternative funding sources, including local philanthropy, corporate partnerships, individual giving, social enterprise income strategies, and other avenues.
• Strengthen donor relationships. Existing relationships with donors are the most valuable. Communicate regularly, share impact stories, and show the tangible difference their contributions make.
• Collaborate and share resources. Connect with other organisations facing similar challenges. Share best practices, explore collaborative opportunities, and learn from others’ experiences.
• Focus on impact. Continue to prioritise your core mission and demonstrate the impact of your work. Strong evidence of your effectiveness will be essential for securing future funding, regardless of the source. Quantify your achievements and showcase the positive changes you make.
• Review and refine budgets. Carefully review your current budget and identify areas where adjustments can be made. Consider cost-saving measures without compromising essential programmes and services.
• Develop a contingency plan. Prepare for various scenarios. Outline steps you can take to adapt to different funding income and potential challenges, including the possibility of prolonged funding freezes.
• Communicate transparently. Maintain open and transparent communication with your staff, board, volunteers, and the communities you serve. Share updates, acknowledge challenges, and highlight your ongoing commitment to your mission, even in the face of funding uncertainties.
• Build a reserve fund. A reserve fund allows an NPO to maintain essential services, cover operational costs, and adapt to financial disruptions. If you have not already established a reserve fund, consult a specialist financial institution.

Inyathelo, established in 2002, bases its interventions and training on the concept of Advancement. This is a systematic, integrated approach to building and managing external relationships with key constituencies and stakeholders, to attract support.

The Advancement approach is more crucial than ever, says Domingo. “Times of funding uncertainty are difficult, but they also present opportunities for innovation, adaptation, and growth. By working strategically, NPOs can navigate these challenges, including the current USAID situation, and emerge more resilient, and better equipped to serve their communities.”

Photo by micheile henderson on Unsplash