UNDERFUNDED AND OVERLOOKED: The Hidden Roadblocks Facing Youth Service Nonprofits

In the high-stakes arena of the state appropriation process, nonprofit youth services programs are facing a silent crisis and perfect storm in 2025.?

After reading the Nonprofit Impact Matters report, it makes greater sense why 90% of nonprofit appropriation requests address staffing needs. In the same vein, it makes even more sense why so many of these programs get vetoed (or not even considered) in the first place.?

This coupled with the growing political trend to overly scrutinize the effectiveness and allocation amounts nonprofits receive - based on the Return on Investment (ROI) for the taxpayers - effectively adding another roadblock for youth service organizations that serve historically underserved communities.

For instance, according to the report Non-Profit Quarterly, 76.8% of Black-led nonprofits operate on annual budgets of less than $500,000, with one-third surviving on just $30,000 annually.?

So, if a state imposed a minimum appropriation request of $500,000 with matching funds, it would be nearly impossible for one organization to apply for funding.?

Their dependency on a handful of philanthropic donors, staffing challenges, and fundraising difficulties underscore the critical need for how these organizations prioritize their funding requests.?

In this article, I will highlight nonprofits' underlying challenges when requesting appropriations, some myths, and political trends that could help them strategize better.?

Are you the missing puzzle piece??

Imagine your nonprofit as a puzzle piece trying to fit into the larger picture of state priorities.?Nonprofit leaders must think this way when applying for appropriations at any level of government.?

To secure funding, you must show how your piece completes the puzzle.?This means carefully studying local and state goals while framing your programs to address the community's critical needs.?

For example, if legislative leaders prioritize improving STEM education, a youth coding program partnering with Black Girls Code could highlight how it incorporates coding workshops to enhance math pathways for underserved children.?

It would be like speaking the same language as philanthropic funders—but for budget analysts and elected leaders who have to fight for your project.?

And when you align your goals with the critical needs in government, you're more likely to be heard. However, this doesn't mean changing your core mission.?

Instead, it's about finding the overlap between what you do and what the state wants to achieve. Remember, state agencies are looking for partners to help solve big problems—partners who will yield the greatest ROI to the taxpayers of that community. Demonstrating how your nonprofit can contribute to these solutions increases your chances of securing that crucial funding.?

This alignment strategy can be compelling for Black-led nonprofits, which often face more significant funding challenges.?

The Delicate Balance: Staffing vs Programming

Philanthropic fundraisers are the water that helps a nonprofit garden grow.?

State appropriations are more of the weed barrier that allows you to expand but requires careful management to ensure proper growth.?

Many nonprofits focus their funding requests on operational needs instead of the programming they will do with additional resources, which is a major red flag.?

Remember, state agencies and legislators want to invest in programs that directly impact communities, not just create jobs for nonprofits.?When a funding request is heavy on salaries and light on actual programming, it's often dead on arrival.?

But why? You have staffing challenges, right?

Right, but if/when that funding doesn't come in for the second year, what will happen to those jobs or salary increases? Will they be furloughed, or will a job be in limbo, hoping to avoid the veto pen??

The sustainability of your non-profit is one of the most critical parts of the appropriations process.?

You could also think of it this way:?

Suppose you were investing in a new restaurant. Would you want most of your money to go toward hiring staff or creating an amazing menu and dining experience??

The same principle applies in politics when dealing with nonprofit funding.

Here's why this matters:

1. Program Impact: Funders like legislative leaders want to see their money making a tangible difference. A request that's 75% salaries doesn't show how the community will benefit.
2. Sustainability Concerns: If most of the funding goes to new staff positions, what happens when the grant ends? It raises questions about the organization's long-term planning.
3. Efficiency: High administrative costs can signal inefficiency to budget analysts. They want to see more bang for the taxpayer's buck regarding program delivery for the taxpayers.?
4. Missed Opportunities: By focusing on staffing, nonprofits might overlook innovative program ideas that catch the attention of elected and state agency leaders.

To put your best foot forward, flip the script. Focus on your program's benefits and potential impact on the communities you serve.?

• What specific activities will you undertake??
• How many people will you serve??
• What outcomes do you expect??

Once you've outlined a compelling program, you can discuss the resources needed to implement it.

Remember, salaries and operational costs are important—they absolutely are! But they should be presented as a means to an end, not the end itself. You must show legislative leaders how investing in your program will create ripple effects in the community and benefit taxpayers.?

By focusing on programming over salaries in your funding requests, you're more likely to:

1. Align with state priorities
2. Demonstrate clear community impact
3. Show fiscal responsibility
4. Stand out from other applicants pulling from the same state resources.?

In the competitive world of nonprofit funding, this approach can make all the difference between a successful request and one that gets vetoed or overlooked.

So, before you submit that next funding request, ask yourself:?

"Am I selling the meal or just the kitchen staff?"?

Ensure you're presenting a full menu of impactful programming, with staffing as just one ingredient in your recipe for success.

States Are Listening: Are You Ready??

As we discussed, navigating the state appropriations process requires nonprofit youth-serving organizations to strategically align their mission with state priorities and demonstrate clear impact. The good news is that some states are listening and considering measures to address the challenges nonprofits face with government contracts.?

For example, legislation in Connecticut would allow nonprofits to retain unspent allocations under grants, encouraging efficiency and innovation. It would also require annual cost-of-living adjustments for nonprofit grantees and mandate timely payments within 30 days of service delivery.?This development allows nonprofits to advocate for similar measures in their states. However, this raises another conversation about 501(c)3 vs. 501(c)4 status that we'll save for another day.?

These legislative changes address some of the challenges we've discussed earlier and provide a framework for how nonprofits can better position themselves for state funding. By understanding and leveraging these evolving policies, organizations can enhance their ability to deliver services effectively and secure sustainable funding.

To make the most of these emerging opportunities, nonprofit leaders should:

1. Stay informed about relevant federal and state legislation affecting their operations and funding opportunities.
2. Engage in permissible advocacy activities to support policies that benefit the nonprofit sector, such as improved contracting practices and funding mechanisms.
3. Adjust budget projections and funding requests to account for new regulatory requirements and increased operational costs.
4. Highlight compliance with new transparency and reporting requirements in funding applications to demonstrate organizational integrity and readiness for government partnerships.
5. Collaborate with other nonprofits and sector associations to amplify advocacy efforts and share resources for navigating complex regulatory environments.

By adopting these strategies and staying attuned to the changing landscape of state appropriations, nonprofits can better position themselves as valuable partners in addressing community needs. This approach, combined with a focus on impactful programming and precise alignment with state priorities, can help organizations overcome the veto hurdle and secure the funding they need to fulfill their missions.

Remember, securing state appropriations is not just about asking for money - it's about demonstrating your organization's value as a piece of the larger puzzle of community development and state priorities. By understanding this dynamic and adapting your approach accordingly, you can increase your chances of success in the competitive world of nonprofit funding.

Piecing Your Roadmap All Together

In conclusion, securing state appropriations for nonprofits requires a strategic approach that goes beyond simply asking for money. By aligning your mission with state priorities, focusing on impactful programming over operational costs, and staying informed about legislative changes, your organization can be an essential piece of the community development puzzle.?

Campaign season can often distract leaders from the issues at hand. As you navigate this challenging landscape, remember to showcase your unique value, demonstrate clear impact, and always keep the needs of your community at the forefront.?

These strategies will better equip nonprofit leaders to overcome the veto hurdle and secure the funding needed to fulfill their vital mission. The path may be challenging, but the potential to create lasting change makes it worth undertaking.?

What specific program benefit could your nonprofit highlight in your next state funding request, and how might you reframe your staffing needs to support an impact-driven narrative??