Earlier this year, I sat across from a nonprofit leader who looked exhausted in the way only executive directors understand. Their largest federal grant—one they had depended on for nearly a decade—was delayed again. Payroll was five days away and they’d already paused programs twice. The board kept sending “quick check-in?” emails she absolutely did not have the emotional bandwidth for.
She looked out the window to their parking lot and sighed, “We’re doing good work, but all of this feels so fragile. It feels like we’re constantly a few weeks away from closing our doors.”
If you work at a community-based organization, you’ve probably felt the same way. Federal dollars once felt like the safest bet, but now the ground shifts constantly. Priorities change, programs disappear, and suddenly you can’t use the very words that describe your clients in a grant application. Even the most successful programs can feel like they’re one lost grant away from crisis.
When it comes to attracting non-federal funders, evaluation has become a differentiator. Foundations, corporate partners, and major donors increasingly expect to see not just “we served 500 people,” but evidence of change: What shifted, for whom, and why it matters.
Your data and evaluation practices are the strongest bridge to more diversified, more stable funding.
Good Data Is Persuasive, Relatable, and Fundable
Most nonprofits collect data, but very few use it in a way that makes a funder lean in. Thoughtful evaluation practices help you speak everyone’s language.
Foundations want outcomes and equity. Corporate partners want measurable reach and community relevance. Government agencies want compliance and evidence; individual donors want human stories grounded in trustworthy numbers.
When your data is intentional and aligned with your mission, it becomes one of your most persuasive funding tools.
What Funding Diversification Looks Like In Practice
Let’s walk through a hypothetical nonprofit with perfectly diversified funding: Community Roots Collective (CRC), which works to improve food access and health in a midwestern city.
CRC’s annual budget is $3 million. A healthy, diversified funding structure might look like:
- 25% Federal / State grants
- e.g., USDA grants for nutrition education; a state health department contract for food access work.
- e.g., USDA grants for nutrition education; a state health department contract for food access work.
- 30% Private foundation grants
- Local and regional funders focused on health equity, food systems, and racial justice.
- Local and regional funders focused on health equity, food systems, and racial justice.
- 15% Corporate partnerships and sponsorships
- Grocery chains, regional banks, and health systems sponsoring programs, events, and a mobile market.
- Grocery chains, regional banks, and health systems sponsoring programs, events, and a mobile market.
- 20% Individual giving
- Monthly donors, mid-level gifts, and a few major donors.
- Monthly donors, mid-level gifts, and a few major donors.
- 10% Earned revenue
- Sliding-scale community cooking classes, consulting with other communities on how to build similar food access coalitions, and a small catering arm that hires program graduates.
- Sliding-scale community cooking classes, consulting with other communities on how to build similar food access coalitions, and a small catering arm that hires program graduates.
Notice: they still have government money, but it’s no longer the single point of failure. If a federal grant changes priorities, the organization is bruised, not broken.
How Good Data Gets Them There
CRC doesn’t magically wake up with that mix. They use data and evaluation at every step:
Evaluating current practices
They audit what they’re already collecting: attendance, demographics, food box distribution, pre/post surveys, maybe a few stories. They compare that to what different funders want to see: health outcomes, food insecurity measures, neighborhood impact, and systems-level change.
Using a framework like the one in our monitoring and evaluation for strategic planning post, they map current measures to long-term goals and see what’s missing.
Upgrading their data model
They decide to track:
Short-term: knowledge of nutrition, self-reported stress around food, number of healthy meals cooked per week.
Medium-term: changes in food insecurity scores, reduced reliance on emergency food, improved self-reported health.
Systems: number of policy changes supported (e.g., city support for mobile markets), new institutional partners, neighborhood-level data trends.
Tailoring the “story” to different funders
For a health foundation, they highlight reduced food insecurity scores and improved self-reported health, with strong data visualizations. For a corporate grocery partner, they show how many residents gained access to fresh produce within a one-mile radius and how many are now shopping at local stores.
And for individual donors, they build a simple one-page “Your gift at work” with a mix of three key numbers plus one participant story.
Using data to support earned revenue
When CRC sells a consulting package to another city, they can confidently say, “In three years, we helped reduce household food insecurity in our primary neighborhoods by X%, while building a coalition of 40+ partners.” That’s proof of concept, and a pretty good idea of what other municipalities will pay for.
This is the loop: better data → clearer evidence → more compelling case → more diverse funding → more stability → more room to keep improving.
Funding Sources You Might Not Have Explored Yet
- Mission-aligned earned revenue: training, workshops, curricula, or technical assistance based on your expertise.
- Corporate partnerships: data-backed community impact is increasingly important in environmental, social, and governance strategies as well as corporate social responsibility strategies – see Edelman’s Trust Barometer for trends. There’s a reason you see all those corporate logos at the bottom of every non-profit’s website!
- Planned giving and asset-based gifts: endowments, bequests, and Donor-advised funds provide vital stability, predictable revenue, and resilience, allowing nonprofits to plan beyond immediate needs
- Pooled funds/giving circles: groups like Philanthropy Together prioritize shared measurement and clear outcomes.
- Impact-minded investors: Community Development Financial Institution and Program-Related Investments often support social enterprises backed by measurable results.
All of these pathways get easier when you can clearly articulate and demonstrate your impact.
Getting Your Organization Funding-Ready Without Overhauling Everything
Here’s how you can start to get your organization funding ready:
- Audit what you already collect and stop gathering data no one uses.
- Choose 3–5 core outcomes that matter to both your mission and funders.
- Standardize your collection process so staff know why each metric matters.
- Create funder-friendly data products, like a one-page snapshot or short outcomes deck.
- Watch what funders ask about—their questions reveal what should be highlighted.
The nonprofits that thrive—especially as federal funding becomes less predictable—aren’t the ones chasing the biggest single grant. They’re the ones weaving together a more resilient, more diverse funding ecosystem built on good data, strong evaluation, and honest storytelling.
When you can clearly show how your work changes lives and why your approach matters, you attract better-aligned funders who stick around. If you want support building a data system that works and a funding story that resonates, we’d love to help!