Take the Risk Assessment Quiz
Despite years of “innovation,” leaders still spend up to half their time chasing dollars. Here’s what’s really behind the perpetual fundraising treadmill—and what it’s costing your mission.
What percentage of your time as a nonprofit leader is spent raising money? The rule of thumb is 25%, although some professionals recommend nonprofit leaders spend up to 50% or more of their time asking for money. In 2022, when I published Managing Your Nonprofit for Resilience, I noted this fundraising burden, the feeling of hands perpetually outstretched, as one of the 50 reasons why running a nonprofit is so hard. In this post, the latest in a series, I update the research and evaluate to what extent circumstances have changed.
Hands Perpetually Outstretched refers to the relentless burden on nonprofit leaders to chase short-term funding. This perpetual fundraising hustle distorts organizational strategy, limits long-term sustainability, and saps a nonprofit’s energy and morale. When leaders feel forced to pursue every grant or donation opportunity, the organization can lose strategic focus and even drift away from its mission.
Constantly shifting focus solely to chase funding or appease external pressures can dilute the organization's core purpose, leading to mission drift. Moreover, the scramble for dollars takes a human toll. Staff and leaders often burn out from the constant need to adjust and pivot to each new funding opportunity.
This reactive cycle is also inefficient. Short-term fixes like one-off emergency appeals or poorly aligned projects can drain resources from building true sustainability. In short, having your “hands perpetually outstretched” for the next donation undermines the very resilience that nonprofits work so hard to achieve.
Since Managing Your Nonprofit for Resilience was published in late 2022, the fundraising environment has evolved in ways that often exacerbate this challenge. Key developments from 2023 into mid-2025 include economic pressures, changing donor behavior, and policy uncertainty.
High inflation in 2022–2023 took a serious bite out of charitable giving. Many nonprofits saw nominal donations rise, yet inflation wiped out these gains. According to the Giving USA 2024 report, total charitable giving fell by 2.1% in 2023 after adjusting for inflation. This followed an even larger inflation-adjusted drop of over 10% in 2022. In practical terms, nonprofits are raising less real funding even as demand for services grows. Middle-class donors, in particular, have been squeezed by rising living costs, leaving less disposable income for charity. While the U.S. economy improved in some areas by 2024, uncertainty remained high. Persistent price increases in 2025 for basics like food and fuel are making donors cautious, and fears of a potential recession or political changes are further dampening giving.
A troubling trend through 2023 and 2024 has been the decline in the number of active donors, especially small-dollar contributors. Research shows nonprofits are now “raising more dollars from fewer donors.” In one study, donor counts dropped over 5% year-over-year while total dollars barely grew. In fact, donors giving $100 or less fell by a staggering 12% through late 2024, accounting for two-thirds of the donor losses. The donation base is shrinking as lower- and middle-income givers pull back, a phenomenon so pronounced that experts warn these donors are “disappearing from the U.S. charitable landscape.” On the other hand, ultra-wealthy “mega donors” have increased their gifts. 2023 saw a surge in mega-donations of over $1 million. In effect, fewer (wealthier) donors are carrying more of the load, which can tempt nonprofits to tailor their strategy to a handful of funders.
This concentration of fundraising is risky and can further distort mission focus. We also see donors becoming more discerning. Many now demand transparency and alignment with their values, researching nonprofits’ impact and ethics before giving.
Generational shifts are at play too; younger donors (Millennials, Gen Z) prioritize tangible impact and tend to give through digital platforms or social causes, while older donors remain a major source of funds. These changes require nonprofits to adapt how they fundraise, but adapting doesn’t mean chasing every trend. It means being strategic about which funding approaches truly match your mission and community.
Finally, as has been well-documented on this blog, since January 20th, the federal government has shifted billions of dollars out of the nonprofit sector. This has left nonprofits chasing fewer dollars, all at a time of increasing demand for services.
By all indications, the “hands perpetually outstretched” challenge is more pressing than ever. The data paints a clear picture: overall charitable giving has not kept pace with inflation for two years running, effectively shrinking nonprofits’ purchasing power and widening the gap between needs and resources.
The donor pool is contracting, with small donors falling away and nonprofits increasingly reliant on a narrow set of wealthy contributors. That concentration heightens the risk of mission drift (“We have to please this big donor or we’ll lose funding”) and leaves organizations vulnerable if any major donor pulls back.
Many nonprofit leaders would agree that the day-to-day strain of fundraising has not eased either; if anything, it’s become more intense as they try to make up for lost ground. Even as some nonprofits raised slightly more money in late 2023, this required greater effort from fewer supporters, with donor retention on a four-year decline.
All of this suggests a worsening cycle: chasing short-term dollars has gotten harder, not easier, in the current climate. In our next post, I will describe countermeasures that nonprofits should take to address this risk.
Risk Alternatives enhances the resilience and sustainability of nonprofits through comprehensive tools, training, and support. For inquiries about conducting a risk inventory or other matters, please contact Risk Alternatives at info@tedbilich.com.