How Strong Banking Relationships Can Guide Nonprofits Through Uncertain Times

The first six months of 2025 have been an anxious time for nonprofits across the country. Many charities have had to grapple with the threat of federal funding cuts, which are now becoming reality. Others are seeing once-dependable donors shift their giving or cut back, altogether.

Regardless of where their revenue came from in years past, many nonprofits are taking a hard look at their budgets, programs and staffing to see where they can find any extra money.

The team at Crescent Cove, a Brooklyn Center-based home that provides respite and end-of-life care for children with life-limiting conditions and their families, says their revenue is already down about 12 percent compared to one year ago. About one quarter of its revenue comes in through Medicaid reimbursement waivers from qualifying families.

Jenny Floria, the communications and engagement director at Crescent Cove, says she’s seeing the most pullback from foundation giving and private donors. That money makes up about three-quarters of the nonprofit’s revenue.

“Some of our donors have let us know that they’re reducing their support to us this year because they also support other nonprofits who did see federal funding cuts,” explains Floria. “Those nonprofits are in dire need and could be shutting their doors. So, they have put more of their effort towards those nonprofits and less towards us.”

The Minnesota Milk Bank for Babies (MMBB) is also taking a hard look at where its revenue is coming from. While it does generate income through donated breast milk sold to hospitals and outpatient distribution sites, it still relies on grants and foundational giving for a share of its annual budget, particularly for its Community Care Fund. This funds Bridge Bag programs for families in financial need providing a short-term supply of donor milk.

MMBB also wrapped up its first capital campaign last year, which helped it move to a larger facility in Roseville.

“Several organizations have turned down our requests because they’re not funding anything new,” she says. “Others have told us they’re moving to a two-year giving cycle, which means we can’t apply for new money until two years from now.”

Still Assessing the Impacts

Mary Stoick, senior vice president and director of tax credit lending at Sunrise Banks, says many of her nonprofit customers are still trying to figure out the full impact of these funding gaps.

“They’re having to revisit how their budgets line up against their operational expenses, staffing costs and physical footprint,” Stoick says. “And they’re having to make some tough decisions pretty quickly because they don’t have time to raise a lot of money.”

Some nonprofits, like the Science Museum of Minnesota, have already resorted to layoffs. Others are starting to pull back on programs and services.

“But that is not a great proposition because that is supposed to be our rainy-day fund,” she says. “We don’t want to have to tap into that just for operating dollars.”

Dech says MMBB just renewed a line of credit through Sunrise Banks. She says it can be used for immediate expenses, such as equipment repairs or to cover temporary gaps in program funding. Her team can’t always wait around for grant money because the timing can be unpredictable.

“The line of credit has been a really helpful tool for us,” she says.

Stoick says she has had to have some very direct conversations with her customers who are experiencing funding shortfalls. But she adds it’s important to show a certain level of understanding in these situations.

“A good bank is going to be direct, real and honest with you,” she says. “These conversations can be hard and painful, but there’s a critical need to acknowledge the humanity of the situation. We’re all just humans trying to solve big, tough human problems in the world.”

Tough financial times can also lead to new and creative funding ideas for nonprofits.

After contracting a part-time development specialist, MMBB plans to hire a new staff member to focus on development and communications.

“Because we have relied so much on grants and foundation funding, we have to focus on adding different types of fundraising and ways to build institutional support,” Dech says.

Crescent Cove is benefiting from four partnership fundraisers between August 1 and September 30. This includes a “Cards 4 Kids” game day at a Calvary Church in Golden Valley, a “Corks for a Cause” vineyard event at Everly Farms in Minnetrista and receiving sale proceeds from an exclusive ice cream flavor produced by A to Z Creamery in Hopkins.

Strong Banking Relationships

“It feels great to have a partner that has a lot of tools in the toolbox,” she explains. “We’re not funding experts. But our banking partners are, and they’re bringing solutions to us that help us.”

Stoick says that even if she can’t directly help one of her customers in a tough financial situation, she can refer them to other organizations, like Propel Nonprofits, who may be able to provide that support.

“Working with a banker that can ask the right questions and be a good, targeted resource is another way that you know your banking relationship really matters for a non-profit,” she says.

Dech says she’s grateful for the guidance and support her team at MMBB has received from Sunrise Banks.

“Our founders looked in many different areas,” she says. “Sunrise Banks was the only one who opened their doors and resources that allowed our nonprofit to get started.”

Bryan Toft is the Chief Revenue Officer at Sunrise Banks.