For years, securing government funding was a key milestone for nonprofits. It signaled a proven model and opened doors to greater impact. Today, with federal support becoming less reliable, many organizations find themselves at a critical juncture. The ground beneath the traditional funding landscape is shifting, forcing a widespread reevaluation of how to sustain vital community work.
This is more than a budget line issue; it's a mission-critical challenge that calls for a new approach. For foundations committed to community impact, the conversation must evolve from simply awarding grants to actively building the long-term capacity of nonprofit partners. It's about empowering them with the skills and strategies needed to create resilient, diversified funding models that can weather any storm. Together, we can transform this moment of uncertainty into an opportunity for profound and sustainable growth.
The challenge: Over-reliance on a single funding source
At the start of 2025, seismic shifts shook the nonprofit sector: sweeping changes in government grantmaking, large-scale reductions in the federal workforce, and major policy announcements all signaled a new reality. In response, The Dorothy A. Johnson Center and Candid released analyses posing a crucial question: How much do nonprofits depend on federal government funding?
What they found was stark. In 2024, federal expenditures reached an astonishing $6.75 trillion. By comparison, the total assets of all private and community foundations in the U.S.—even counting their office furniture and laptops—amount to just $1.466 trillion. As the Johnson Center notes, philanthropy would run out of money only 79 days into funding the federal budget. The message is clear: while philanthropy is vital, it cannot begin to match the scale and reach of federal funding.
Many nonprofits, however, have historically depended on federal and state grants to scale their operations. This crucial support has fueled innovation and expansion, but it has also created a deep vulnerability. When these cornerstone resources diminish or disappear, the ripple effects threaten programs, jobs, and the very missions that keep communities strong.
The question is no longer if funding will slow down, but how to build a fundraising engine that doesn't hinge on a single source. Yet we know this pivot is far from easy. Nonprofit teams are already driven and dedicated, but resources run thin. Specialized expertise, extra time, and the hands-on talent needed to develop these new strategies are often out of reach. That’s why true capacity building has never been more essential.
Capacity building: The catalyst for reinventing funding
Capacity building is the key to unlocking a nonprofit's potential for long-term sustainability. It moves beyond short-term financial fixes and invests in the core competencies an organization needs to thrive. For fundraising, this means providing access to expert guidance, technical assistance, and strategic coaching.
When foundations invest in capacity building, they provide a powerful force multiplier for their grant dollars. You are not just funding a program; you are strengthening the entire organization. This strategic support empowers nonprofits to:
- Develop a diversified revenue strategy
- Master the art of storytelling to get grants and private donations
- Create the infrastructure needed to attract and retain a broad base of individual supporters
- Leverage modern fundraising tools and AI support
This approach ensures that your nonprofit partners are not just surviving but are equipped to grow their impact for years to come. It’s an investment that pays dividends in the form of stronger, more effective community organizations.
"We’ve used Catchafire since 2020 and have worked with over 80+ expert consultants. Thanks to that constant support, More Than Bootstraps was awarded a $157,500 grant. In such a competitive landscape, Catchafire’s skills-based volunteers and advisory made it possible for us to win.”
—Nonprofit on Catchafire
Nonprofits don't run on magic. The most effective capacity building strategy is achieved through practical, iterative work that equips organizations to adapt in real time. Download this resource to learn more.
Introducing a new suite of fundraising projects
At Catchafire, we are relentless champions for the people and organizations working on the frontlines of our communities. We understand the challenges nonprofits are facing, and we are committed to providing the resources they need to succeed. That is why we have launched a new, specialized suite of fundraising projects designed to build sustainable revenue.
“We're not wasting energy trying to fix the broken funding status quo. Traditional grant requirements and federal funding are too slow for the unrelenting pace of change communities are going through. We need the charitable sector to recognize that skilled volunteers are eager to help—they want you to want them to help. They showed up during the pandemic and they are knocking on the door now. At Catchafire, we deploy our technology and community to power this rebuild, helping nonprofits modernize and thrive.”
—Tyler Manley, Chief Platform Officer
These projects connect nonprofits with highly skilled pro bono consultants who provide the targeted support needed to diversify their funding. Each project is pre-scoped with clear deliverables, saving valuable staff time and ensuring a successful outcome. We bring together a community of experts dedicated to helping your partners achieve their goals.
Our new fundraising projects empower nonprofits to:
- Establish an Individual Giving Program
- Create an Ambassador Program
- Plan a Successful Giving Day Campaign
- Set Up Grant Reporting and Impact Storytelling
- Expand into Earned Income Strategies
- Conduct Support Discovery and Testing
- Create Stories to Increase Donations
- Get Grant Research and Readiness Assessments
This is more than just a list of services; it's a pathway to resilience. It is how we, as partners in philanthropy, can go beyond the grant to foster true sustainability.
“Matt delivered an awesome series of graphics that we were able to use for our Giving Tuesday campaign on Instagram! With his help, we raised over $43,000!”
—Nonprofit on Catchafire
The power of partnership
The challenges facing the nonprofit sector are significant, but they are not insurmountable. Investing in capacity building is one of the most powerful ways to amplify your impact, ensuring that your nonprofit partners have the tools, knowledge, and support they need to not only navigate change but to lead the way forward.
Let's empower the organizations that are solving our society's most complex issues with the resources they need to build a sustainable future. Together, we can ensure their vital work continues.
