The New Funding Rush: Why Measuring and Communicating Impact Matters More Than Ever

The nonprofit sector is in the middle of what Instrumentl calls “The New Funding Rush.” Their recent report reveals that 85 percent of nonprofits are feeling the effects of federal funding changes, and more than 90 percent are adjusting their strategies. Organizations are applying for more grants, pursuing new funding sources, and working hard to stay ahead of uncertainty.

This reshuffling of the funding landscape is both a challenge and an opportunity. As more organizations pivot from federal to private and corporate grants, competition for those dollars is intensifying. The nonprofits that will stand out are those that can demonstrate clear, measurable outcomes.

At SureImpact, we see every day how data-driven organizations are better positioned to adapt. When funding shifts occur, they have the tools to show results, communicate value to funders, and make confident decisions about where to focus their limited time and resources.

A Sector in Motion

Instrumentl’s report paints a picture of a sector under pressure but not standing still. Half of nonprofits surveyed have lost federal funding entirely. Many others are experiencing delayed payments, reduced staff capacity, and canceled opportunities.

Even those that have not lost funding are preparing for disruption. The vast majority are taking action. Only 8 percent of organizations reported making no changes at all.

In response, nonprofits are embracing two main strategies:

1. Diversifying their grant portfolios toward private and corporate sources.

2. Submitting more applications overall to fill the gaps left by shrinking federal funds.

   
   

Both moves make sense in the short term. Yet both also increase workload and competition. To keep up, organizations need more than just more applications. They need evidence of effectiveness.

The Shift to Private and Corporate Funding

According to the report, 82 percent of nonprofits are expanding into private and corporate grant opportunities. This is the single most common adaptation strategy among organizations hit hardest by funding losses.

Private foundations and corporations bring new opportunities, but they also expect strong proof of results. Federal grants often emphasize compliance and process. Private funders tend to focus on outcomes and stories of change.

This means that the same approach that worked in federal grant applications may not work in this new environment. Funders want to know:

• How many people are being served?

• What is changing for those individuals or communities?

• How do you know your programs are making a difference?

These questions cannot be answered anecdotally. They require data that is collected consistently and tied to outcomes that reflect the mission.

When organizations have systems in place to measure outcomes, they can answer these questions with confidence. They can also show how their results compare to peers and demonstrate a return on investment for funders who must choose among many qualified applicants.

More Applications, More Competition

The second trend from the Instrumentl report is a dramatic increase in application volume. Two-thirds of organizations are submitting more proposals than before, and nearly one-third of those that lost federal funding are applying to even more grants than originally planned.

This surge makes sense. Many teams are trying to replace one large federal grant with multiple smaller private ones. But each new proposal represents staff time, narrative development, data collection, and post-award reporting.

As the number of applications grows, so does the competition. Private funders are now fielding more proposals than ever before. As one respondent in the report noted, “The number of grantees applying for grants from private organizations has been increasing exponentially.”

To rise above the crowd, organizations must move beyond volume and focus on quality. The most competitive proposals share a clear theory of change supported by outcome data. They do not simply describe activities; they prove that those activities lead to measurable results.

Why Measurable Impact Is the Differentiator

When funders receive dozens or even hundreds of proposals, impact data helps them make confident decisions. They want to invest in organizations that can demonstrate that their programs work.

Measurable impact is more than a reporting requirement. It is a communication tool that builds trust and credibility. It shows that an organization:

• Understands its goals and intended outcomes.

• Tracks progress toward those goals using reliable data.

• Uses results to improve and refine its approach over time.

This level of insight reassures funders that their investments will create tangible change. It also helps organizations make better internal decisions about which programs to grow, replicate, or reimagine.

In our work at SureImpact, we often see that the organizations most confident in their funding strategies are those with the clearest data. They can articulate their results in both quantitative and human terms. They can say not just how many people they served, but how those people’s lives changed.

The Capacity Challenge

Instrumentl’s report highlights another tension: nonprofits are being asked to do more with the same or fewer resources. Staff are stretched thin, and burnout is common. Writing more applications can fill immediate gaps but can also create strain across teams.

Data can help here, too. With a clear understanding of which programs deliver the highest outcomes relative to investment, leaders can allocate their time more strategically. Rather than applying for every available opportunity, they can target funders whose priorities align closely with their strongest results.

In other words, impact data can guide not only storytelling but strategy. It allows teams to focus on the most promising opportunities instead of spreading their efforts too thin.

Beyond Grants: Building a More Resilient Funding Mix

The report also shows that nonprofits are branching out beyond grants altogether. One-third are pursuing donor-advised funds, 36 percent are growing earned revenue, and 43 percent are launching new campaigns or events.

This creativity is encouraging. It shows that nonprofits are not waiting passively for stability to return. They are building resilience through innovation and diversification.

Still, every new funding source comes with its own expectations and accountability measures. Whether it is a corporate grant, a major donor gift, or an earned revenue venture, funders and partners want to see results. The ability to show measurable outcomes becomes the common thread across all revenue streams.

The Way Forward: Data as a Strategic Asset

Federal funding instability is unlikely to fade quickly. Policy priorities will continue to shift, and budget changes will ripple through the sector. At the same time, the private and corporate grant space will become more crowded.

For nonprofits preparing for 2026 and beyond, the ability to collect, analyze, and communicate impact data will determine who thrives.

A few key actions can help organizations prepare:

1. Define clear outcomes.

Decide what success looks like for each program. Be specific and measurable.

2. Standardize data collection.

Create consistent methods so that data from different programs or partners can be compared and combined.

3. Use data to tell a story.

Numbers matter, but they mean more when paired with stories of individual lives changed. Combine quantitative and qualitative evidence.

4. Share data transparently.

Funders appreciate honesty. Sharing both progress and areas for improvement shows maturity and builds trust.

5. Align funding strategy with impact.

Use outcome data to decide which grants to pursue. Target funders who share your vision and priorities.

These practices turn data from a burden into a strategic advantage. They allow organizations to compete more effectively in a crowded funding environment and to adapt quickly when the landscape shifts again.

A Moment for Reflection and Action

Instrumentl’s report makes it clear that the grant landscape is changing rapidly. Many nonprofits are feeling uncertain, yet there is also a sense of determination. Leaders are experimenting, building new partnerships, and seeking new ways to sustain their missions.

This moment calls for clarity. Data provides that clarity. It helps leaders see which efforts are working, communicate results to funders, and make decisions rooted in evidence rather than guesswork.

The organizations that succeed in the next chapter of this funding environment will be those that pair adaptability with accountability. They will be able to demonstrate impact in ways that resonate with funders, partners, and communities alike.

At SureImpact, we believe that data is not just about compliance. It is about confidence. When you know the outcomes of your work, you can approach funders, partners, and the future with assurance that your mission is making a measurable difference.

Download our Ultimate Guide to Impact Measurement to learn more.