Nonprofit Funders Want Systems Not Stories: Start Building Real Capacity

If your nonprofit is staring at a funding gap in 2026: your money problem may actually be a structure problem. Host Julia C. Patrick welcomes Dr. Sharon Elefant of The Nonprofit Plug to talk about why grants and big gifts don’t “save” organizations when the foundation underneath is shaky—things like weak financial controls, unclear governance, founder-centric operations, burnout, and stalled growth.

Dr. Elefant frames it in plain language: when infrastructure is messy, even good funding becomes risky. She shares a real example of a funder walking into a site and asking, “What would you do with $100,000?”—and the leader couldn’t answer beyond “I need a million.” That moment exposes a common challenge: passion without business readiness. As Dr. Elefant puts it, “Funders don’t fund passion. They fund systems… impact… data… proven methodologies.” The practical shift starts with smaller, sharper thinking: her team asks clients, “What would you do with $5,000?” so leaders can articulate spending with purpose and credibility.

The duo then connects the dots to the daily realities nonprofit leaders face—grant reporting, accounting requirements, staffing ramps, and the inevitable pressure of post-award management, reminding viewers that grant dollars aren’t free; they demand operational strength. Together, they push the conversation toward healthier revenue design: Dr. Elefant suggests keeping grants to a manageable slice (she’s comfortable around 25%) and building the remaining 75% through stronger revenue streams like major donors, sponsorships, partnerships, and especially program service revenue. She normalizes earned income with examples nonprofits already recognize—hospitals, daycares, universities—and shows how fees can expand access through sliding scales and subsidized services.

The episode lands on relationships and board performance: cultivate funders like humans, ask them what they want, and bring mindset training to the boardroom with clear expectations, accountability, and the courage to treat board service like real work. Sustainable funding follows sustainable operations!

00:00:00 Welcome to 2026 and today’s funding reality check
00:01:32 What The Nonprofit Plug does
00:03:18 Why funding problems are structural problems
00:04:46 The $100,000 question leaders struggle to answer
00:06:40 The $5,000 question that builds real clarity
00:09:22 Why grants are episodic and can’t create sustainability
00:11:38 A realistic grant percentage and smarter revenue balance
00:12:13 Program service revenue explained and why it’s ethical
00:14:24 Contracts with schools and government as revenue pathways
00:18:17 What funders want now trust outcomes survival
00:20:48 Funder cultivation relationship building that wins
00:24:36 Getting boards to shift mindset and raise expectations

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