Welcome to Happenings on the Hill – Happenings on the Hill is a regular column specifically for the Third Sector by government engagement expert Neil Pharaoh, Director & Co-Founder of Tanck.

The non-profit sector plays a vital role in addressing societal needs, providing essential services, and supporting vulnerable populations. However, during uncertain economic times and a wobbling economy, non-profits face unique challenges in maintaining financial stability and fulfilling their missions effectively. In this article, we will explore key strategies and actions that non-profits can take to navigate through economic uncertainties and thrive in challenging economic environments.

Assess Financial Health  

The first step for non-profits during uncertain economic times is to assess their financial health thoroughly. Review revenue sources, budget allocations, and financial reserves. 

Identify areas of vulnerability and potential risks in funding streams. Understanding the financial landscape allows organisations to make informed decisions and prioritise resource allocation effectively. Government funding is often on very long-term horizons, especially if you need to create a new funding streams. These horizons, and understanding your runway from other funding sources, become key.  

Align your funding to government cycles 

Spending a bit of time aligning your funding to a map of known government cycles is a critical first step.  Map out State & Federal budgets, elections, mid-year economic outlooks and other key timelines, to things like your financial year cycles and contract lengths.  This helps you understand when you need to engage, and helps you plan out timelines – critical as government timelines are often quite long.  

Strengthen Relationships 

Building strong relationships with all funders and supporters is essential, particularly during economic uncertainties. Communicate transparently about your organisation’s financial challenges, impact achieved, and funding needs. 

Engage donors through personalised communications, donor stewardship initiatives, and gratitude expressions. Cultivating donor loyalty and trust increases the likelihood of continued support and donor retention. This extends to government—if you are struggling financially and let government know and have built good relationships there are often support funds available.   

Focus on Impact  

In times of economic instability, demonstrating tangible impact and outcomes becomes even more critical. Enhance impact measurement efforts by collecting and analysing data related to program effectiveness, beneficiary outcomes, and societal impact.  

Use impact metrics to communicate success stories, highlight organisational value, and attract funding from philanthropic partners and grant-makers. Look at your impact and also read what government priorities may be, or recent announcements, can you improve alignment without a strategic drift? 

Collaborate and Leverage Partnerships 

Collaboration and partnerships are valuable assets during uncertain economic times. Explore opportunities to collaborate with other non-profits, community organisations, government agencies, and private sector entities.  

Leverage collective strengths, resources, and expertise to address shared challenges, leverage funding opportunities, and amplify impact in the community. 

The most brilliant government funding partnerships I have ever seen have been when organisations can bring not for profits, with corporate partners and donors, together with government around a project – it creates multipliers across the board and reduces risk for any one funder (and your organisation) – ask how you link your government advocacy to other forms of fundraising and what strategies do you use to bring them together? 

Advocate for Sector Support  

Engage in advocacy efforts to advocate for policies, funding, and resources that support the non-profit sector’s sustainability and resilience. Collaborate with advocacy groups, participate in advocacy campaigns, and engage policymakers to raise awareness of the sector’s contributions and funding needs.  

There are some amazing peak and industry organisations in the broader sector, but also recognise there are a number that are highly ineffective as well – there are many occasions where I have worked with a member of a sector organisation who is leaps and bounds ahead of its industry or sector peaks – so an honest assessment of skills, capabilities and capacity is necessary when looking at engaging sector wide activities.  

Advocate for fair and equitable policies that promote a vibrant and thriving non-profit ecosystem 

Navigating uncertain economic times and a wobbling economy requires strategic foresight, financial prudence, and collaborative partnerships within many different sectors.  We are seeing in Australia presently huge pressure as inflation and other costs are reducing people’s donations and volunteer time and support for the sector.  Looking at leaning in to help ensure that a rising tide lifts all boats in the not for profit and civil society space is a longer term, but more strategic way of supporting other for purpose organisations.