Five questions every NGO board should ask before the next grant cycle
Most NGO boards focus on familiar accounting questions: how much money did we raise, what does our grant pipeline look like, and does our budget balance? But these questions only tell us how we’re doing right now; they don’t show whether our organization could weather an unexpected crisis.
In the U.S., nonprofit boards are expected to monitor finances by reviewing budgets, audits, cash flow, and donors' wishes. For example, BoardSource's board self-assessment includes eight items about financial oversight, but none ask where our funding really comes from.[1] The Independent Sector's 33 principles come closest. Still, even there, the idea of looking at our overall revenue mix only comes up when launching a new type of earned income, not as a regular responsibility.[2] This system wasn't created to spot the kind of weakness the 2025 USAID funding cut revealed: just one funder leaving can push a working organization straight into crisis. The five questions below are about our organization's structure — not just fundraising — and you won't find them on a typical board self-assessment.
What percentage of our total revenue comes from sources other than grants and donations?
Among 501(c)(3) filing Form 990 filers, program service revenue is 69.64 percent of total revenue in tax year 2022[3]. That figure is dominated by hospitals billing insurance and universities collecting tuition, categories most development organizations lack. The Urban Institute's 2025 survey of public charities, excluding hospitals, universities, and congregations, found a mix of nothing like the aggregate IRS number: 50 percent private funding, 28 percent government, and 18 percent earned income.[4]
This is a big-picture question: do we rely more on earned income or on donations and grants, and what would it mean for us if a major supporter left? If the board can't answer this in one meeting, it probably hasn't addressed the issue yet.
Have we conducted an asset inventory, mapping what our expertise, data, networks, and intellectual property are worth in commercial markets?
“I found no widely adopted, peer-reviewed methodology for conducting this kind of nonprofit asset inventory; one of the few purpose-built frameworks I identified is Community Wealth Ventures' 2001 Mapping Your Assets workbook.[5]. That absence is diagnostic: intangible assets reported are 0.5 percent of the aggregate nonprofit balance sheet, and royalties, the narrowest proxy for monetized intellectual property, are 0.19 percent of sector revenue[6]. Organizations that have mapped their assets look different: Marine Stewardship Council draws 93.6 percent of income from logo licensing[7], and Sesame Workshop generated 64.1 percent of its FY2025 operating revenue from distribution fees, royalties, and licensing.[8]
No one says we must make money from our intellectual property, but if the board doesn't even know what we have, it can't make an informed decision. Most boards have never had this conversation.
Does our leadership team include at least one person who has built revenue in non-philanthropic contexts?
The evidence on whether this matters is thinner than it looks. The Nonprofit Leadership Alliance found 32 percent of nonprofit leaders had private-sector experience, based on LinkedIn profiles across twelve national organizations.[9] Bridgespan found 42 percent of chief executives at larger nonprofits had significant private-sector management experience, and 73 percent of hiring organizations valued it.[10] A 2016 dissertation testing whether private-sector experience predicted financial performance, including revenue diversification, found no statistically significant association.[11]
We don't actually know if this experience makes a difference. Still, the real question is practical: does anyone on our leadership team have firsthand experience building the kinds of revenue streams we now need? There's a big difference between wishing for a skill and actually having it on the team.
If our largest funder left tomorrow, what would this organization look like in three years?
This question got very real in 2025. According to the Nonprofit Finance Fund 2025 survey, 52 percent of respondents had three months or less cash on hand, and over a third ended 2024 with a deficit, the highest in a decade.[12] The Urban Institute found that nonprofits hit by government funding cuts relied on government money for 42% of their revenue, compared to 28% sector-wide.[13] Candid estimated that about 19% of organizations receiving government grants — more than 14,000 nonprofits — would have three months or less of cash runway if those grants disappeared.[14] Then, funding dried up. The Center for Global Development estimated that 86% of USAID's nearly 6,200 awards had been terminated by August 1, 2025,[15] and federal grants to charities dropped 38% in a matter of months.[16] For boards, the lesson is less about predicting which funder will leave than understanding in advance what its departure would do to staffing, programs, reserves, and the organization's operating model.
When was the last time our strategic plan treated revenue architecture as a design challenge rather than a fundraising target?
Bridgespan warns that "diversification is good" can function as a slogan substituting for an actual funding strategy.[17] A 2024 Bridgespan and Stanford Social Innovation Review study of 297 nonprofits that scaled past $50 million found more than 90 percent had a dominant category of at least 60 percent, and 269 of the 297 averaged 90 percent concentration in one category.[18] Concentration, not diversification for its own sake, is the empirical path to scale, among the large U.S. nonprofits Bridgespan studied.
What separates a resilient organization from a fragile one is whether the board actively chose and managed its mix of revenue sources — with clear reserves and exit strategies — or just accepted the mix it inherited. Thinking about revenue architecture means designing our income sources as carefully as we design our program strategy: deciding which to build, which to let go, and planning for what we'd do if our biggest source disappeared.
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Grants did not create the design flaw. The sector built governance infrastructure to oversee fundraising performance without governing revenue architecture. Boards were given budgets to approve and audits to review, but nobody gave them a
mandate to ask where the money comes from, what happens when it stops, or what the organization is worth to markets it has never tried to sell to.
The next board meeting that closes without asking any of these five has already answered a sixth question nobody is asking: whether this board governs the organization or watches external circumstances govern the organization.
Endonotes
[1]BoardSource, "Board Self-Assessment Sample Report," 2024.
[2]Independent Sector, "Principles for Good Governance and Ethical Practice," 2015. See Principle 19.
[3]Internal Revenue Service, Statistics of Income, Form 990 Table 1, Tax Year 2022, data file.
[4]Urban Institute, "How Government Funding Disruptions Affected Nonprofits in Early 2025," October 2025.
[5]Community Wealth Ventures, "Mapping Your Assets" workbook, 2001.
[6]Internal Revenue Service, Statistics of Income, Form 990 Table 1, Tax Year 2022, data file.
[7]Marine Stewardship Council, "Annual Report 2024-25," 2025.
[8]Sesame Workshop, FY2025 audited consolidated financial statements, 2025.
[9]Nonprofit Leadership Alliance, "CEO Research: Initial Release," 2017.
[10]Bridgespan, "Finding Leaders for America’s Nonprofits," 2009.
[11]Karen L. Tune, doctoral dissertation, University of San Diego, 2016.
[12]Nonprofit Finance Fund, "2025 State of the Nonprofit Sector Survey Report," 2025.
[13]Urban Institute, "How Government Funding Disruptions Affected Nonprofits in Early 2025," October 2025.
[15]Center for Global Development, "Analyzing USAID Program Disruptions: Implications for PEPFAR Programming and Beneficiaries," 2025.
[16]Chronicle of Philanthropy, "Federal Grants to Everyday Charities Fell 38% in Trump’s First Months," 2026.
[17]Bridgespan, "Finding Your Nonprofit’s Funding Strategy,".
[18]Bridgespan and Stanford Social Innovation Review, "What It Really Takes to Scale a Nonprofit," 2024.
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