Where Do Nonprofits Find Emergency Funding?

In emergencies, our communities rely on nonprofit programs to help them pull through. Many nonprofits are key players in keeping communities functioning after a natural disaster or economic crisis.

But, what can nonprofit leaders do when they find themselves in an emergency? Finding funding for normal operation is challenging enough—but what can you do when there’s a sudden, unbudgeted, need that will be crucial in order for you to complete your mission?

Here are four ways nonprofits can find extra resources to see them through a bad time:

Keep reserve funds

Just like a for-profit company or your family budget, a nonprofit organization should keep some money on hand for emergency situations. Of course, the big question is how much you should keep in reserve. According to this post on GrantSpace, 3-6 months’ operating costs is a good place to start. We recommend that you take a deep look at the cycle of funding that you have and work some reserve savings into your strategic plan.

Ask your board to step up

Your fundraising team may have a few donors that they know won’t mind giving some extra cash outside of their normal giving cycle, but you don’t want to exhaust these generous partners. If your organization is facing an emergency—which, unfortunately, can happen due to natural disasters, equipment failure, or any other reason a for-profit would have an emergency—it’s time for the board to step up and see if members can launch an appeal within their networks for one-time gift giving.

Here’s a bonus: if your board is impassioned enough during this time of emergency, some of these one-time donors may become regulars.

Ask a regular funder for discretionary funds

Some foundations, corporations and other grantmakers and big donors are able to give one-time gifts outside of their regular donation schedule, even allowing a nonprofit in need to bypass the normal application process. You’ll be most likely to have success with this kind of emergency funding if it’s a funder that you’ve had a good relationship with in the past. This is a very compelling reason to maintain a spotless record of reporting and to keep all of your planning and budgetary papers needed for a proposal orderly and close to hand.

Here’s a bonus: if a grantmaker decides that your organization merits emergency funding, you’ll further impress them in future proposals once you turn your emergency around and get back on track with your mission. 

Consider a loan

Going into debt is not ideal for any company, nonprofit or individual, but there are times when it can be a quick and necessary fix. Before you commit your organization to a loan, however, make sure that you get advice from several sources on the risks involved. One resource in this case might be the Nonprofit Assistance Fund, which provides loans and advice to nonprofits.

Have you had experience with other sources of emergency funding? Weigh in, in the comments!

Looking for more short-term funding ideas? Check out this list from the Fieldstone Alliance.