The Association of Fundraising Professional’s Fundraising Effectiveness Project surprisingly does not discuss grant funding. This is surprising because foundation grants make up 18% of all charitable contributions according to the National Philanthropic Trust. And government grants and contracts make up 80% of nonprofit revenue in the US, according to Nonprofit Times.
Even though the Fundraising Effectiveness Project did not discuss grant funding, it certainly implies the importance of grant funding. While total dollars fundraised increased about 5%, that does not keep up with the 7% inflation from the last year. Further, the number of donors who were retained to give to the same organization twice decreased. And the number of overall donors also decreased by 7%. These numbers indicate that giving from individuals is decreasing, probably related to inflation and an economic recession.
If individual giving continues to decline, then grants will continue to grow in importance for nonprofits. Last year saw a great increase in federal grants and contracts which can shore up nonprofit budgets as individual giving decreases. Further, organizations can lean into their existing private grantors to sustain their giving and their nonprofits.