Posted , by Keith Curtis. Topic: Nonprofit Management.

“Charities Expect Money Worries into 2013 Due to States’ Shortfalls.” Maybe you saw that headline in the Aug. 12 edition of The Chronicle of Philanthropy. The article reports that many states expect their budget crises to continue well into 2012 and possibly 2013.

At the same time, nonprofits that have depended heavily on government funding, such as human services charities, continue to see the demand for their services soar. Knowing this, some foundations have diverted grants away from arts groups and other less-urgent charities to help offset the loss of government funding to basic needs organizations.

What’s the takeaway? It’s what we’ve been emphasizing for the last two years: You must diversify your funding base and revenue streams. Even if some states return to funding the way they used to, which is unlikely, it would still take two to three years after the budget shortfalls for that to happen.

To protect your organization’s financial future (and at the risk of sounding like a broken record), the best steps any nonprofit can take right now are to cultivate individual givers and launch an ongoing major-gifts program. If you’re encountering challenges in taking these steps — with your board, for example — let us know below.

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