For years, many nonprofits have built their budgets around federal grants. They apply, wait, and hope that funding will come through to support their vital programs. But in today’s climate, that model is becoming riskier than ever.

Recently, a major shake-up sent nonprofits into a tailspin. On January 27, 2025, the Office of Management and Budget (OMB) issued a memo temporarily halting all federal grants and loans. The pause was meant to reassess funding in line with new executive orders, but the immediate result? Confusion. Organizations scrambled, trying to figure out what this meant for their programs, employees, and the communities they serve.

By January 29, after legal challenges and public outcry, the memo was rescinded. Crisis averted—at least for now. But this moment served as a wake-up call. Federal funding is not a guarantee. And as policies shift, so does the financial security of organizations that rely on grants to keep the lights on.

If there’s one lesson to take from this, having a sizable amount of your total eggs in the grant basket could put your organization at risk. Now, more than ever, it’s time to rethink fundraising strategies and build a more sustainable future.

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Why Relying on Grants is Riskier Than Ever

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Even before this recent funding pause, grants were already an unpredictable revenue stream. The competition is fierce, the application process is tedious, and once awarded, the funds come with strict conditions. On top of that, grants are often tied to political and economic factors beyond a nonprofit’s control.

Take the Giving USA 2024 report: Individual donors made up 69% of all charitable giving in the U.S., while foundation and government grants combined accounted for a much smaller slice. In other words, everyday people—your supporters—are driving philanthropy, not big institutions.

This is why many forward-thinking nonprofits are shifting their focus toward diversified, donor-driven funding models.

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The Power of Direct Engagement

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When was the last time a grant application sent you a thank-you note? Probably never. But donors? They give because they care about your mission. They want to be part of your impact.

And with social media and messaging platforms, staying connected with supporters is easier than ever. Imagine sending a quick, personal message to a donor, thanking them for their gift, updating them on your latest campaign, or inviting them to an event. Direct messaging—through platforms like Facebook Messenger and Instagram—allow nonprofits to build deeper relationships with supporters, driving both engagement and revenue.

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Here’s why direct messaging is gaining traction in nonprofit fundraising:

• It’s Personal. Unlike mass emails or generic mailers, messaging allows you to speak directly to each supporter in a meaningful way.
• It’s Instant. No waiting for people to check their inbox. Messages reach donors where they already are—on their phones.
• It Drives Action. Whether it’s a donation ask or an event reminder, direct messaging gets quick responses and higher engagement rates.

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How Nonprofits are Winning with Direct MessagingOrganizations that embrace this approach are seeing real results. At GoodUnited, we’ve helped nonprofits use direct messaging to turn social media followers into lifelong supporters. By meeting donors where they already spend time and making it easy to give, these organizations have raised millions in new revenue.The best part? This strategy isn’t just about donations—it’s about building a community of engaged supporters who feel personally connected to your mission.Making the Shift: What You Can Do TodayIf your nonprofit is still heavily reliant on grants, now is the time to take action. Here’s how to start:

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1. Look Beyond Grants. Review your funding sources and start building a strategy that doesn’t hinge on one revenue stream.
2. Focus on Individual Giving. Invest in donor cultivation and relationship-building. Small gifts add up to big impact over time.
3. Embrace Direct Messaging. If you’re not already engaging supporters through social platforms, now’s the time to start.
4. Stay Agile. Keep an eye on policy changes and trends that could impact funding. Flexibility is key to long-term sustainability.

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Nonprofits Are Raising Millions with Direct Messaging

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‍Organizations that embrace direct messaging fundraising are seeing real results. By using GoodUnited, the only purpose built direct messaging fundraising solution, nonprofits have:

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• Increased donor engagement with personal, automated messaging sequences.
• Raised millions in new revenue by making it easier than ever to give.
• Expanded their supporter base by reaching new audiences where they already spend time.

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And the best part? These conversations aren’t just about donations. They’re about building a community of dedicated supporters who feel truly connected to the mission.The Future Belongs to Agile NonprofitsThe last few weeks have made one thing clear: Grants aren’t a sure thing. The organizations that thrive will be the ones that adapt, diversify, and build direct relationships with their supporters.Your nonprofit’s future shouldn’t be left up to policy shifts and government decisions. It should be in the hands of the people who believe in your mission—your donors.And with GoodUnited, that future is stronger than ever.