As many nonprofits brace for increased competition and shifting priorities in federal funding, the need for sustainable alternatives has never been clearer. At the 2025 Kentucky Grant Professionals Association (KY GPA) Statewide Conference in Elizabethtown, I met Phil Johncock and discovered one of his books that felt especially timely: Diversify Nonprofit Sustainability with 20 Approved IRS Revenue Sources. It was a powerful reminder of something many of us in the nonprofit world know but often struggle to prioritize, relying solely on federal grants is risky and limiting.

In my roles with the Kentucky Grant Professionals Association and Grant Ready Kentucky, I work alongside nonprofits across the Commonwealth that are deeply mission-driven. Many are doing vital work in their communities, but they also face chronic uncertainty because their budgets hinge on federal grant cycles. When a funding opportunity does not come through, or when national priorities shift, programs stall and staff positions hang in the balance.

Federal grants are valuable tools, without a doubt. But they are not a comprehensive solution for long-term sustainability. They often come with narrow scopes, heavy compliance requirements, and timelines that do not always match real-world needs. As Johncock outlines in his book, sustainable nonprofits diversify their revenue with funding streams that align with their mission, capacity, and the communities they serve.

There are more possibilities than many realize. Fee-for-service programs can expand your reach while generating income. Sponsorships from local businesses or civic groups can support events or campaigns. Private foundations, community foundations, and corporate foundations often provide more flexibility than federal sources and are more likely to invest in locally grounded work. Some nonprofits find success through raffles, charity gaming, or special events. These not only raise funds, they also build relationships and community awareness. Others may have the opportunity to sell unused assets or create earned income ventures that support their core work while staying true to their mission.

These approaches are not just theoretical. I once spoke with a grassroots organization that wanted to transform a vacant lot into a new community park. Rather than beginning with a grant application, we talked about ways to engage the neighborhood directly. I suggested they host a casual cookout on the lot itself, not just to bring people together, but to raise awareness about the vision. We discussed placing a large fundraising thermometer on-site so the public could see progress in real time. Since the organization did not yet have a strong social media presence, I encouraged them to start building one to share updates, celebrate early donors, showcase renderings of the future park, and generate excitement. These efforts not only kept costs low, but they also created meaningful opportunities for community ownership and connection.

In cases like this, private or community foundation funding might still play a role in closing the gap. But with the upfront community investment and visible momentum, the project becomes far more compelling to potential funders.

Certainly, not every nonprofit should pursue every revenue strategy. Sustainability is not about doing everything; it is about doing what fits. The goal is to find the right combination of funding streams that reinforces your mission, engages your supporters, and gives your organization the stability it needs to thrive.

If you are a nonprofit leader reading this, I encourage you to take stock of your current funding mix. Are there opportunities you have overlooked? Are there conversations you need to start, with your board, your staff, or your community, about trying something new? If you are not sure where to begin, start by mapping out your current revenue sources. Identify one area where you could experiment this year. Even a small step can build momentum.

At Grant Ready Kentucky, we support nonprofits in thinking beyond the next grant cycle. We work with organizations to explore creative, mission-aligned funding strategies that build resilience and support long-term impact. Our goal is to help you find the right path for your work and walk it with confidence.

Let this be a starting point. Sustainability is a journey, and you do not have to walk it alone.

Disclaimer: This blog post is for general informational purposes only and does not constitute legal or tax advice. Before pursuing any new funding stream, especially those that involve earned income, asset sales, or gaming activities, nonprofits should consult a qualified tax professional who specializes in nonprofit law. Doing so helps ensure compliance with IRS guidelines and protects your organization's tax-exempt status from unintended consequences related to unrelated business income or other regulatory issues.