Creative Leaders Find Ways to Replace Lost Revenue
Among their strategies: adding earned income and pursuing corporate partners.
By Stephanie Beasley
Senior Writer and Fellowship Director
June 9, 2026 | Read Time: 8 minutes
For decades, Harlem United built its mission around caring for people living with HIV and AIDS, growing from a grassroots organization in the 1990s into a multifaceted health and housing provider in New York City with revenues approaching $35 million today. For the often-marginalized and low-income people it serves, housing has always been a pressing need and one the group has been working hard to provide through contracts with the city.
That is why the recent decision to withdraw from four city housing contracts has been so hard for Jacquelyn Kilmer, who has led the group for more than a decade. Harlem United closed two large supportive housing programs for which the group leased individual apartments throughout the city and let two shelter contracts expire. The decision was driven by a longstanding problem: The contracts didn’t cover the costs of providing the services.
At a time when government grants are disappearing and fundraising can be erratic, the group could no longer subsidize rent, overhead, and administrative expenses. “Ultimately, in order to keep those contracts from continuing to drag on the rest of the finances of the agency, we made the decision to transition out of them,” Kilmer says.
Nonprofits across the country are making similar bottom-line and sometimes heartbreaking decisions. About 66 percent of nonprofit leaders nationwide say they’re concerned about their organization’s financial stability, according to a recent Center for Effective Philanthropy survey. Thirty-nine percent reported budget deficits in fiscal 2025. The data shows many groups are stepping up fundraising with a focus on diversifying revenue while also cutting costs through layoffs, service reductions, or tapping reserve funds.
The organizations most likely to endure, experts say, are those reinventing how they bring in money by boosting or adding earned income, pursuing private capital or corporate partners, or building a mix of major gifts, digital fundraising, and recurring monthly support.
Leaders must increasingly consider shrinking, restructuring, or walking away from money-losing programs to protect their core missions, says Onuka Ibe, managing partner at La Piana Consulting, a firm that works with nonprofits.
“More and more boards and staff teams are having conversations about what they say no to,” he says. “There’s been this expectation that nonprofits are only successful if they’re growing and scaling, and I think people are starting to challenge that and not take on work that stretches their capabilities and pulls away from their core strength.”
In addition to ending contracts and avoiding taking on any new work that could carry even a modest deficit, Harlem United has had to lay off some staff in executive and management positions. And it is prioritizing revenue-generating health services like primary care and behavioral health. The group also worked with the Nonprofit Finance Fund to refinance an approximately $7.5 million loan, a move expected to save about $100,000 a year in interest, which Kilmer says will go directly toward operations during a precarious time. There is uncertainty about the renewal of federal contracts and also the recognition that few of the contracts — federal, state, or city — fully cover operating and overhead costs, Kilmer says. New York City rent has increased significantly in recent years, and generally, contract funding has not increased to match rent prices, she says.
Nonprofits should not have to absorb unsustainable losses to serve the public good, says Aisha Benson, Nonprofit Finance Fund’s CEO. “Harlem United did what was best for the organization, for its longer-term sustainability, so that they could best serve their clients.”
Resilience and Reinvention
While financial shocks have been widespread, few nonprofits have been as deeply hit by government funding cuts as global-aid groups. From 2024 to 2025, U.S. commitments to new spending on humanitarian aid fell from more than $9 billion to just over $3 billion, according to recent data released by the Center for Global Development think tank.
The problems are so dire and widespread that in April, InterAction, a U.S.-based membership group for international NGOs, invited leaders to Washington, D.C., to strategize ways to replace lost funding.
This is an inflection point, says Tom Hart, president and CEO of InterAction. Abrupt cuts over the past year delivered a “real negative shock” to nonprofits, he says, triggering widespread staff layoffs, country office closures, and program contractions. Yet Hart emphasized that the sector has shown notable resilience, with few outright closures, largely because many organizations had diversified funding streams during years of robust development assistance from governments.
The April meeting was co-hosted by Beyond Grants, an initiative created for NGOs in response to aid cuts. Leaders discussed various financing models such as impact bonds, below-market investment funds, shared services, and deeper partnerships with the private sector, he says.
Nonprofits must learn to speak the language of finance and impact, Hart says. That may require building new business relationships and sometimes hiring new talent with experience in investing and business. While nonprofit salaries cannot compete with the private sector, Hart believes it is possible to attract mission-driven professionals as well as investors willing to accept modest financial returns paired with measurable social impact.
Hart also sees promise in collaborations such as groups sharing services that reduce costs for multiple nonprofits while generating modest revenue and value for private-sector partners.
Despite the common wisdom that nonprofits should always look for diverse sources of income, in practice they rarely follow that advice, says financial expert Michael Fern. A recent analysis of IRS 990 forms for 96,000 nonprofits that generate more than $1 million in annual revenue found more than half of nonprofits rely on a single revenue stream for more than 85 percent of their income. The analysis was conducted by SciRise, an AI-driven platform Fern created. “Ideally, you would want four or five different service lines or products so that if there’s turmoil in one area, you’re not fully exposed,” Fern says. He hopes to help remedy that by working with Beyond Grants and InterAction to develop data that will help groups identify opportunities for revenue diversification.
An Example of What’s Possible
Barron Segar became president and CEO of World Food Program USA in January 2020, just months before widespread pandemic shutdowns. Segar, who had a career in banking and finance, was hired explicitly to grow the group’s reach with the private sector and major donors. But the pandemic sharply increased food insecurity worldwide, pushing WFP USA to expand its operations. At the time, it had annual revenue of about $19 million. To address such vast needs, it had to bring in much more. This year, the organization expects to surpass $140 million in revenue — striking growth in an era when many nonprofits are struggling to stay afloat.
World Food Program USA has found success by working with U.S. donors, corporations, foundations, and faith-based partners to fund emergency food aid and long-term nutrition programs in conflict zones and climate‑vulnerable regions. Segar credits its success to an unrelenting focus on relationships and discipline around fundraising.
Nonprofits have shown resilience largely because they built diversified funding streams during years of robust government support.
“Programs do not exist without resources,” he says, arguing that CEOs must be visible and personally engaged with donors rather than delegating fundraising entirely to development staff. Segar regularly travels to meet major supporters, from individual donors to global partners, and is known for returning donor calls within hours. That approach has paid off. Segar pointed to Islamic Relief USA, whose annual giving to World Food Program USA grew from about $500,000 to a $25 million multiyear partnership after years of close collaboration.
But diversification has also been essential, Segar says. WFP USA has expanded digital fundraising, invested in Gen Z engagement through its Zero Hunger Generation initiative and strengthened its board with executives skilled in finance, technology, and strategy. Monthly giving has also surged, with roughly 40 percent of digital donors enrolling as recurring contributors, which is a “staggering” and unusually high conversion rate, Segar says.
The nonprofit sector’s survival will depend less on squeezing more from the same government and foundation pipelines and more on building new, durable streams of support. One big potential source of revenue: donor-advised funds, which have more than $326 billion in assets, Segar notes. DAFs represent large, untapped potential, and activating that money should be part of diversification efforts, he says.
And it is vital that nonprofit leaders put fundraising at the center of the job by investing in digital and recurring giving, cultivating corporate and faith-based partners, and exploring earned revenue and finance tools that can cushion the next shock, he says.
“My expectation is that all CEOs going forward are going to be operating in an environment with some level of chaos and disruption,” he says. “It is the new normal.”
