Why Do Nonprofit Funders "Sunset" Giving Priorities?
First things first, let’s understand what “sunsetting” is. When you are awarded grant dollars and officially go into an agreement with a funder, your organization is placed under a program or priority of the foundation which reflects their funding initiatives for that particular period of time.
Sunsetting means that the funder is discontinuing the funding of a specific program area or priority. It doesn’t automatically mean that they won’t return to funding that area of purpose, but it does mean that, for the time being, they’ve switched gears. This does and will happen as long as you’re in nonprofit work, let alone fundraising.
Photo by Joslyn Pickens
“Funding partners are not all the same. They can be a major individual donor, a grant-making institution (foundation), or they could be a fiscal sponsor (company/corporation). ”
Either way, it’s always exciting to establish an ongoing major partner who believes in your mission and wants to see it thrive. The reality is that these resources will face some difficult circumstances eventually. Some reasons for this are as follows:
Fund Availability: Running low on allocated dollars to that program can always be a major issue. Think of COVID-19. Most funding partners have reallocated dollars to create unrestricted relief funds during the pandemic, which means those dollars they would’ve allocated next season are probably not going to be there.
Diversification: The donor, board, and/or executive staff could decide that they need to continue to create and cultivate new partnerships. This is so that they are not operating “exclusively” or perceived as denying access to grassroot or other priority-aligned nonprofits.
This topic has become popular over the last five plus years and continues to gain attention as foundations (specifically) are placed under the spotlight for required allocation of assets (5%) and the expectation for more funds to be awarded each year.
Strategic Planning Processes: Every five to ten years, organizations go through this. Sometimes they find that based on constituent experience, geography of target audience, community partners, donors, etc., they need to move the needle on other initiatives that are more aligned with current issues.
This sometimes means shifting grant-making or sponsorship priorities to meet the needs of today and not “20 years ago”. This is due to many funding partners creating a space where they can include and encourage diverse perspectives to “lean in” to the conversations they’re having about funding and where it’s needed most.
Any questions about this or any other nonprofit fundraising topics? Comment below or visit me online at www.gratefultograssroot.com and shoot me a message!
