The Nonprofit Legitimacy Crisis and How to Fix It

Last spring, York County Shelter Programs, a Maine nonprofit that steadfastly served the region’s most vulnerable population for 45 years, made a devastating announcement. Despite running York County’s largest food pantry and operating multiple homeless, family, and emergency shelters, the organization was suspending operations due to lack of funding.

Reduced demand didn’t cause the closure. Homelessness and food insecurity remained urgent community needs. There was no scandal or mismanagement, either. The organization simply couldn’t bridge the gap between what it cost to operate and what it received in support.

“We haven’t been able to keep pace with income,” explained the organization’s board spokesperson Kelli Deveaux to CBS 13 News. Twenty staff members lost their jobs, and vulnerable residents faced displacement with just one week’s notice. The math was stark: Emergency shelters received $7 a night per bed in state funding, but it costs $102 a night to operate that bed. That’s a nearly 15-fold gap that made sustainable operations impossible.

The closure of York County Shelter Programs represents a broader legitimacy crisis in the nonprofit sector that’s occurring precisely when organizations must do more with less. While federal funding cuts are certainly difficult to navigate, the situation is particularly dire because too many nonprofits lack the brand visibility to rally donors, prove their value, and ultimately cushion the blow of those cuts.

A Blind Spot

The nonprofit sector touches one in four Americans and employs 12 million people but still operates in the blind spot of national consciousness. When a bank falters, for example, politicians and the public debate regulation. When a nonprofit collapses, they debate whether it should exist at all.

In truth, government funding has been erratic for years — from slashed social spending in the 1980s to cuts stemming from the 2008 financial crisis. Private philanthropy has never been able to make up the difference.

So what now?

To weather this storm, the sector must fundamentally rethink how it operates. That means investing in a chronically undervalued piece of infrastructure: brand. Why care about something so seemingly mundane while the sector faces an existential crisis? Because brand isn’t just a logo or marketing fluff. It’s a nonprofit’s reputation, visibility, and values, which together promote the trust people place in its work. Over time, that trust earns the nonprofit flexibility, giving it room to pivot, take risks, and show up in crises.

But here’s what’s bizarre about the nonprofit sector: It’s the only field where being unknown is acceptable. Startup businesses are told to spend up to 30 percent of revenue on marketing. AI startup Cluely spent 200 percent of total revenue on marketing and was praised as “the next generation of startups.” Politicians hire communications teams before they’ve even confirmed their policy platform. But suggest that a nonprofit invest in brand development and suddenly you’re accused of stealing from shelter puppies.

The result is a sectoral divide in which for-profits don’t think twice about launching fancy branding campaigns while nonprofits are expected to survive on Canva templates and guilt. Nearly 40 percent of nonprofits have no advertising budget at all, and those that do spend a median of just 0.12 percent of their total expenses on advertising.

Treating brand as optional is like political candidates treating name recognition as discretionary. They might have the best policies, but if voters don’t know who they are, they’ll lose.

Nonprofits could have survived this underinvestment 10 or 15 years ago, but the attention economy now dominates. Brand value is one of the few assets nonprofits fully control. Yet they’re often too embedded in their work to realize how invisible they are — a worrisome trend as digital spaces increasingly become the primary public square.

What Branding Can and Can’t Do

I should pause here because it’s easy to make branding sound like a silver bullet. Admittedly, even if an organization nails donor messaging, posts consistently, and appears in the right spaces, dollars may not automatically roll in. I’ve seen nonprofits invest in marketing and social engagement, but the funding still doesn’t come. As York County Shelter Programs proves, the work can be urgent and necessary and still not align with what donors and foundations want to fund. That’s not a moral judgment, but the maddening reality of how the sector works.

Branding still matters, though. Imagine walking down a street of shops. Some have incredible window displays — warm light spilling out and artful, eye-catching arrangements. But inside, there’s nothing you want. Other shops, though, can look unremarkable from the outside, or even a little run-\down. But when you step in, you’re floored by the quality of the goods.

Nonprofits are often that second shop. They have the valuable goods — the programs, relationships, and results — but the window dressing doesn’t convey that. Brand, when done well, ensures the outside matches the inside. It doesn’t guarantee survival but gives an organization the best shot at being seen and chosen. Without it, nonprofits are left hoping someone wanders in by accident.

2 Realities

The power of digital brand building became painfully obvious during both the pandemic and the 2024 election, when online narrative mattered just as much, and sometimes more, than on-the-ground realities.

World Central Kitchen and Mutual Aid NYC, for example, became household names during COVID-19, not because they had the biggest budgets but because they understood how to appear in digital spaces while working in physical places. They participated in online conversations, shared real-time updates, and earned trust through transparency. Meanwhile, nonprofits with decades of good work remained invisible because they operated as if 2010’s communication strategies worked for today’s attention economy.

Nonprofits must navigate two realities simultaneously: They must work in communities while establishing their presence online, where public discourse increasingly happens and where legitimacy gets constructed and contested in real-time. The organizations that understand this dual reality show up strategically online, not just broadcasting post-event updates but actively participating in important conversations.

Who Controls the Story?

Nonprofits can start forming their brand strategy by answering two questions:

What story do people tell about our organization when we aren’t in the room? This shifts the focus to reputation building, forcing nonprofits to think about how their work spreads in people’s conversations and on social media. To answer this question, monitor how your organization is mentioned online and ask supporters to describe it in their own words. Reddit and Google reviews are great places to start. Those insights become the foundation for stronger branding because they reveal the story people believe, not just the one you’re trying to tell.

Why would someone choose our nonprofit over doing nothing? People’s time and attention are limited. They scroll past, click away, and ultimately forget. To break through the noise, your organization needs to clearly convey its unique value. Take a close at your homepage and social media profiles. If a stranger can’t instantly tell what problem you solve and for whom, strip everything back to your core message. In other words, viewers should be able to answer what specific gap your community would need to fill if you disappeared tomorrow.

To build institutional resilience, the sector needs to stop treating brand as auxiliary and start seeing it as necessary to creating real power. Everyone from program staff to board members should get on board, helping shape public understanding of who a nonprofit is and why it matters.

This year proves that we can’t control financial markets, policy, or the cost of eggs. But we can control narrative. Nonprofits have spent decades learning to deliver high-quality services. Now they must learn to deliver high-quality signals. That’s not shallow marketing — it’s smart strategy.

Editor’s Note: A version of this piece originally appeared on the author’s Substack.