A key stakeholder withdraws support from your nonprofit. How will you navigate this unexpected challenge?

When a key stakeholder withdraws support, first assess its impact on your nonprofit, including financial, operational, and strategic consequences. Understand the broader implications for programs and communities served. Engage your team to evaluate and prioritize immediate needs, forming the basis for your response strategy and stakeholder communication.

Immediately contact the stakeholder. Find out among other things: a) Is there any possibility of reconciliation, remediation or reversal ?; and, b) What did we as the organization do that we could have done better ? Don't keep this under wraps or fluff an answer with other stakeholders. But give a general yet honest answer. Check fund accounting budgeting to determine how to cover the expenses. A sale of the not-for-profits' assets might be one solution. Another solution is an intensive fundraising campaign to temporarily adress the shortfall. Don't rule out a RIF (Reduction in Force). It may well have justification.

Before reaching out to the stakeholder, conduct a quick internal assessment. Identify potential reasons for their withdrawal and evaluate the impact on your finances and projects. Discuss the situation with your management team and other key stakeholders to gather insights. However, avoid spending too much time on this step—while it's crucial to understand the situation, delaying action can make the problem worse. Use this assessment to inform your next steps and respond promptly. I haven't experienced a complete withdrawal of support, but I've seen situations where expected project renewals didn't come through. In some cases, we were able to negotiate a fair deal by understanding the donor's concerns and adapting our approach.

Losing a key stakeholder’s support can feel like a major setback, but it doesn’t have to derail your nonprofit. ?? One of the best ways to navigate this challenge is to have a diversified funding and sponsorship strategy in place before it happens. By proactively building a broad base of supporters—whether through grants, individual donors, corporate sponsorships, or community partnerships—you create a safety net that cushions the impact of any one loss. ??? Think of it as spreading your wings wider: when one source of support pulls back, you have others to lean on. ?? This approach not only stabilizes your funding but also strengthens your organization’s resilience, making it easier to stay focused on your mission no matter what. ??

Open and honest communication is crucial. Contact the withdrawing stakeholder to understand their reasons and explore future collaboration. Keep other stakeholders informed to build trust and potentially gain additional support or advice. Your goal is to maintain and strengthen relationships with both departing and remaining supporters.

When a key stakeholder withdrew support for a project, I found myself navigating a similar challenge. My first step was to take a deep breath and quickly assess the situation—what impact would this have on our finances, programs, and team morale? I then initiated an open dialogue with the stakeholder to understand their reasons. Sometimes, just showing a willingness to listen and adapt can make all the difference. Even when a renewal didn’t come through, being transparent and proactive helped us learn and adjust our approach for the future.

With the impact assessed, revisit your strategic plan. Use the setback as an opportunity to innovate and adapt. Identify cost-saving measures that align with your mission or explore new program areas leveraging your expertise and resources. Strategic planning during change can enhance your nonprofit's future success and resilience.

We’ve faced situations where we had to revisit our strategy after expected project renewals didn’t materialize. One time, a major grant we were counting on fell through, forcing us to rethink our approach. We quickly gathered the team and examined all aspects of our strategic plan. We identified areas where we could reduce costs without sacrificing our mission and shifted focus to projects that aligned better with our core strengths. This process wasn't just about managing the setback; it was about finding new opportunities to strengthen our impact and adapt to changing circumstances.

Your team is crucial in challenging times. Engage them in brainstorming and problem-solving to uncover new opportunities. Foster resilience and adaptability, and involve them in decision-making to harness diverse ideas and build commitment. This collective approach can lead to innovative strategies and strengthen your nonprofit’s ability to navigate challenges.

In moments of uncertainty, I considered two approaches: making top-down decisions or fully engaging my team. Inspired by 'Leaders Eat Last' by Simon Sinek, I chose to engage my team. Their collective insights and diverse perspectives are invaluable for identifying new opportunities. Involving them fosters ownership and resilience, creating a culture of adaptability. This collaborative approach not only strengthens commitment but often leads to innovative solutions that wouldn’t emerge from individual decision-making alone.

When a key stakeholder withdraws support, engaging your team becomes one of the most critical steps. You should already have a risk matrix in place that includes assumptions and plans for potential setbacks, enabling you to act swiftly. By bringing the team together to brainstorm, we were able to explore creative solutions and alternative strategies that aligned with our risk planning. This collective approach not only generated innovative ideas but also reinforced a sense of unity and ownership, helping us navigate the challenge effectively while staying focused on our mission.

This situation highlights the need to diversify funding sources. Relying on one stakeholder can be risky. Explore various streams like grants, donations, sponsorships, and service fees. A diverse funding base offers stability and resilience, helping your nonprofit navigate challenges and ensuring long-term sustainability. This requires persistent effort and creativity.

One of the key principles I emphasize in almost all my trainings—and practice in my own life—is the importance of diversification. Whether for a nonprofit or personally, relying on a single source of income can be risky. I always advocate for having multiple income streams to create stability and resilience. It's the same with funding in the nonprofit world: don’t put all your eggs in one basket. By diversifying, you build a stronger foundation that can better withstand any unexpected changes.

To address any negative impact on your organization, it's paramount to stay ahead of the curve and identify potential issues early on. Particularly with a view to financial stability, cultivate diverse funding streams to prevent a major withdrawal from destabilizing your organization. Beyond continuously diversifying your funding pool and nurturing stellar stakeholder communication and servicing, aim to navigate waves and tides with foresight and agility. Engage in horizon scanning to understand risks and opportunities, invest in raising friends, forge alliances and be open to unconventional collaborations. By doing so, you'll build a resilient support network that helps you learn, adapt & thrive in increasingly dynamic for-purpose seas.

Attempt to reach out to other not-for-profit organizations with similar mission statement tendencies. Should there be an oversight consortium contact their auspices regarding grants or loans in the meantime. Another idea: It may be unlikely, and they might well be met hesitantly; but, determine if any adjunct type organization can take on an overflow by stepping into the breach. Make calls, send emails, but make the outside ones think they want to help. However you plan to approach the situation don't make it appear as if begging earnestly.

When considering next steps, I explored two paths: cutting costs or forging new partnerships. After reflecting on 'Forces for Good' by Leslie Crutchfield, which emphasizes the power of collaboration, I chose to prioritize partnerships. Collaborating with like-minded nonprofits or even businesses can amplify our impact and unlock new resources. It's about expanding reach, credibility, and driving innovation. Strategic alliances not only align with our mission but can lead to powerful, unexpected solutions.

The response depends on the size of the agency. Every agency should review annually the choices of 'merge and close', 'stand alone', or 'merge to grow'. Small agencies may not have the management capacity to diversify funding. Each type of funding has it's own transaction costs to learn and maintain. Fee for service, contracts, and grant funding require dissimilar skills. If you are small, it's no moral failure to select another partner and 'merge and close.' As to larger agencies who can manage transaction costs of diversified funding - I agree with many colleagues here who recommend at least three dissimilar sources of funding. Your challenge will be if you waited until you lost a funding source to work on this issue. Start today!