Are Nonprofit Grants Risky Business?

These days, it’s hard to confidently say that federal grants to nonprofits are certain to continue as they have in the past. But this is true of any source of fundraising income: direct mail got expensive. Too many emails put you in spam jail. Events got whacked by a pandemic.

What’s a nonprofit to do?

Diversify.

Any nonprofit—grant-driven, focused on advocacy, start-up, or enterprise-level organization—can diversify and do it quickly. It simply means finding other sources of income from alternative fundraising channels.

The Power of Multichannel Fundraising

Multichannel fundraising means using different tools in your fundraising software to engage donors. When you create a multichannel campaign, you include outreach such as direct mail, email, SMS texts, and phone calls. When placed in a thoughtful and strategic sequence, these elements can reach more donors where they’re most comfortable.

Research shows that multichannel donors give more than three times as much as single-channel donors. This is highly effective outreach, but only 3% of nonprofits effectively use it!

What’s stopping them? There are a few common challenges you might recognize:

• It makes attribution difficult. If a campaign has four active channels, it can be difficult to tell what’s working (and, therefore, what’s repeatable).
• It requires resources. Managing campaigns means more hours and sometimes an added financial investment.
• More channels mean more data, and nonprofits can become overwhelmed—by a lack of technology or staff—and unable to manage the data.
• More than half of all nonprofits lack a formal engagement and outreach strategy. Implementing a multi-channel strategy without a clear plan with defined goals will be challenging.

We would be remiss if we didn’t point out the elephant in the room: a good nonprofit CRM remedies these challenges.

With advanced reporting and custom dashboards, you solve the attribution problem.

With automation, you solve the resource problem.

With a robust database, data is managed for you.

And with a nonprofit CRM with all core fundraising tools built into the system, coming up with an outreach strategy is a snap.

How Grant-Focused Nonprofits Benefit

From the top, and with a nod to recent unease in nonprofit ranks, we promise that diversifying your revenue streams will help you sleep at night. If you are primarily grant-funded, plan a multichannel campaign now.

Even if you’re primarily federally funded, applying for foundation grants can be another way to diversify! Build additional channels so you aren’t relying on a sole or significant source of income to impact your mission.

Regardless of grants, if you have one source of funds that heavily outweighs the others, consider branching your efforts and starting other channels.

There are additional benefits:

• Using different platforms increases your brand reach and expands your donor pool.
• Engaging donors the way they want to communicate enhances donor engagement. It feels more personalized.
• Consistent communication across channels helps retain donors.

Every nonprofit can benefit from starting or increasing multichannel campaigns.

A Multichannel Case Study

Tupelo Children’s Mansion is a faith-based residential group home in Mississippi that serves disadvantaged youth. The nonprofit relied on direct mail for years but realized it needed to embrace more cost-effective outreach methods.

The organization found its existing CRM too cumbersome to effectively run multichannel campaigns, so three years ago, it came to CharityEngine. It was drawn to this CRM partly because the platform has built-in tools that could streamline the execution of multichannel campaigns.

When Tupelo ran campaigns promoting an event using SMS, email, and social media, it raised more than $75,000. Similarly, it launched a GivingTuesday SMS and email campaign, raising $12,000.

This nonprofit has realized multichannel campaigns' immense power and scalability and intends to use this strategy to continue supporting the children who rely on its help.

Key Considerations for an Effective Campaign

Once you’ve identified the campaign and considered what outreach elements you want to include, there are a few best-practices considerations that will help.

• Segment your audiences and personalize outreach to increase relevance and engagement.
• Use consistent branding and messaging so the recipients identify the outreach as part of a unified campaign.
• Consider a fundraising platform that centralizes donor data and keeps it in real time. This way, you'll always know exactly how your campaigns are performing.
• And be sure you’ve got robust reporting capabilities. CharityEngine offers hundreds of standardized reports and customizable dashboards; it’s easy to spot trends and pivot.

Ensure your technology is set up to help you manage these campaigns easily. Remember to use the data to improve and refine your strategies for the next campaign!

Future-Proof Your Fundraising

The nonprofit landscape is constantly evolving, and relying too heavily on a single funding source—whether grants, direct mail, or events—can leave organizations vulnerable. A well-executed multichannel strategy helps mitigate risk, deepen donor relationships, and create a more sustainable future for your mission.

While implementing a multichannel approach can be challenging, the right nonprofit CRM (like CharityEngine) simplifies the process by integrating data, automating outreach, and providing clear attribution insights.

In diversifying your revenue streams and embracing multichannel fundraising, your nonprofit can stay resilient, adaptable, and better positioned to thrive—no matter what challenges arise.