In 2019, facing a budget shortfall, leadership at a large nonprofit did what seemed responsible: they were "overly transparent" with funders. They shared contingency plans, including worst-case scenarios, because they thought honesty would build trust.
Instead, funders fled. Even previous supporters didn't renew. The message donors heard wasn't "we're being responsible and planning ahead", it was "we're dying."
Fast forward to 2025. After building back to a diversified multi-million dollar budget, they faced new turbulence when major government funding evaporated. But this time, they knew better than to overshare their anxiety.
Meanwhile, peer organizations with much larger budgets suffered. Unfortunately, publicly acknowledging they were in trouble and hoping someone would help, gave them “the smell of death”.
Right now, donors looking at organizations with government exposure are asking this question: Will you be here next year? The answer (or more importantly, or their perception of it) determines whether they invest or walk away.
You might have:
Revenue diversification underway
A viable path to sustainability
Proven impact over multiple years
None of it matters if funders perceive you won't make it.
Overcommunication is a problem, but so is under-communication. If you are too quiet, the concern becomes: "They're not being honest about their situation, don't fund them, something's off".
So what does “just right” communication look like? The org that survived did it through what they call "toe-tapping". This was constant, light-touch communication that signaled stability without triggering alarm.
Perception matters as much as reality. The orgs surviving funding crises are the ones that appear stable while quietly doing the hard work of transformation. They communicate confidence without unrealistic optimism, and acknowledge challenges without broadcasting desperation.
What are you broadcasting?
