When a family loses its primary breadwinner, chaos follows. Bills pile up. Savings dry out. Everyone scrambles just to survive.
That’s exactly what happens when a nonprofit loses its major donor, key grant, or annual fund anchor. Suddenly, the development office goes into panic mode — launching emergency campaigns, begging for help, and “getting creative” just to make payroll.
Some survive. Most don’t.
And yet, the solution has been in plain sight all along: planned giving is fundraising insurance — the quiet protection that keeps your mission standing when everyone else is running for cover.
A recent conversation with Eric Werner, Endowment Strategist at Raymond James, brought this into sharper focus. Institutions like theirs quietly remind nonprofit leaders that long-term financial health isn’t luck — it’s policy, discipline, and planning. Yet most organizations still operate as if next month’s campaign will somehow solve next decade’s problem.
Addicted to Chaos Management
Many nonprofits aren’t just disorganized — they’re addicted to chaos.
The adrenaline of crisis gives them energy. The last-minute fundraising push, the frantic appeal, the “we need this check by Friday” panic — it’s their drug.
And it literally is one: every burst of urgency floods the brain with adrenaline and cortisol, the same hormones that drive a fight-or-flight response. For a while, it feels exhilarating — sharper focus, faster action, that rush of being “needed.”
But like any stimulant, the crash always follows.
Most still operate as if next month's campaign will solve next decade's problem.
Chaos management becomes a lifestyle. It replaces strategy with speed and planning with panic. Staff members feel “busy,” so they mistake motion for progress. Boards praise “hustle” instead of insisting on systems.
And like any addiction, it blinds people to the damage being done. The organization becomes incapable of building reserves, incapable of thinking beyond this quarter, incapable of planning for legacies or endowments.
Meanwhile, disciplined institutions — the ones that treat planned giving as a form of insurance — quietly build permanence. They appear calm, predictable, and professional. Funders love that. Foundations, major donors, and corporate partners prefer investing in organizations that look like they’ll still be here in twenty years.
Those that thrive on chaos? They end up exactly where all addicts do — chasing the next fix.
The Cost of Chaos
Stability Attracts Serious Money
The evidence is stark. In every state across America, 60 to 80 percent of nonprofits that receive government grants could fail to cover their expenses if that funding is frozen or withdrawn.
This isn’t a new crisis — it’s a structural weakness that predates recent events.
The timeline tells the story. During the first six months of the COVID-19 pandemic in 2020, charitable donations declined by more than 20 percent, but government grants soared by over 65 percent, keeping nonprofits afloat. However, that relief was temporary. By 2022, as pandemic funding ended, donations remained flat and nonprofits were left exposed. Throughout 2024, organizations were already experiencing significant government funding instability — grants delayed, awards frozen, priorities shifting. By early 2025, one-third of nonprofits had experienced government funding cuts, freezes, or stop work orders, with about a third of those reporting decreased employees and about a quarter reporting decreased programs.
The numbers reveal an even darker story. According to the National Center for Charitable Statistics, 92 percent of U.S. nonprofits have revenue less than $1 million — they are small by definition. And 30 percent of nonprofits disappear after just 10 years. Many of the rest are trapped in what experts call “permanent begging mode” — chasing one-time checks and posting social media pleas for survival.
Let’s be honest: beggars get street change. Builders get capital. And no one will fund you if you project that you do not care about your future.
But why? The answer isn’t cruelty. It’s neuroscience, psychology, and behavioral economics all pointing the same direction.
Beggars get street change. Builders get capital.
Why Stability Signals Generosity
The Behavioral Economics of Trust
Donors don’t give to organizations in distress — they give to organizations they trust. And trust, it turns out, is engineered by five specific factors.
Dr. Sanjay Bindra, a cardiac electrophysiologist who founded GOSUMEC Foundation USA, conducted extensive research into donor behavior. What he discovered aligned perfectly with behavioral science: people give when the cause aligns with their identity, when the process is frictionless and transparent, and when they feel a personal connection to the outcome.
A nonprofit with a functioning endowment, a legacy program, and disciplined financial policies signals all three. It says: “We’re here for the long haul. Your gift will have impact beyond your lifetime. We manage money like stewards, not like survivors.”
The results are measurable. While the sector average for donor retention hovers around 40–45% with first-time retention below 20% (often below 10%), organizations operating from financial stability and transparency achieve radically different outcomes. Dr. Bindra’s GOSUMEC Foundation, despite being a zero-staff nonprofit, achieved donor retention rates of >90% for recurring givers — and converted >20% of first-time donors to recurring supporters, compared to the sector norm of less than 8 percent.
How? By operating from what Dr. Bindra calls the “Five Principles of Sustainable Giving”:
- Identity-based giving: The donor’s gift reflects who they are.
- Targeted impact: The right gift at the right time.
- Intrinsic motivation: Giving for impact, not recognition.
- Stewardship mindset: Wealth as responsibility.
- Community belonging: Giving strengthens both donor and mission.
Every one of these principles is easier to communicate when your organization isn’t in survival mode.
These principles echo what we’ve explored in “Small and Mighty” — that smaller organizations aren’t limited by size, only by mindset. When you operate from strength instead of scarcity, donors respond with loyalty, not sympathy.
(*source)
Endowed nonprofits can shoot a little higher, go a little higher because they're not worried as much about revenue month to month.
The Financial Backbone: Endowment Management
Of course, insurance is only as valuable as the way it’s managed. A family that inherits life insurance must still budget and invest wisely — or the benefit disappears.
Nonprofits are no different. Once those legacy gifts arrive, that “fundraising insurance” must be managed with purpose and discipline. That’s where endowment management becomes critical — the practice of turning gifts into permanent income.
A strong endowment policy should include:
- Clear investment guidelines and governance (an Investment Policy Statement)
- A sustainable annual draw rate — typically 4–5%
- Transparent reporting to donors and boards
As Eric Werner, Endowment Strategist at Raymond James, explains:
“Traditionally, it has been recommended that an organization’s endowment should be roughly two to three times its annual budget. For instance, if your budget is $2 million, your endowment should ideally range between $4 million and $6 million.
But determining the ideal endowment size has become more complex due to rising operating costs, employee benefits, inflation, and potential federal funding cuts. Benchmarking against peer and competitive organizations is essential to set realistic endowment targets.”
Expert Insight: The Scale of Opportunity
Firms such as Raymond James, SSGA (State Street Global Advisors), and PNC Institutional Asset Management all emphasize the same fundamentals of endowment strength:
- Diversification for long-term growth
- Discipline in withdrawals
- Transparency in oversight
As Werner adds, “An endowment isn’t just an account — it’s a promise.”
The data underscores the opportunity ahead. According to Cerulli Associates via Raymond James research, we’ll see about $124 trillion in wealth transfer between 2024 and 2048, with $18.4 trillion projected for charitable giving. The nonprofits prepared to capture and manage that wealth — with endowments, transparency, and strategic planning already in place — will define the next generation of philanthropy.
Those still chasing crisis-to-crisis? They’ll be left behind.
Planned Giving + Endowment = Real Independence
Planned giving feeds your endowment; endowment management preserves it. Together, they form the nonprofit version of generational wealth — financial independence that outlasts any donor, staff, or administration.
The organizations that thrive through economic cycles aren’t the ones that shout the loudest. They’re the ones that quietly built reserves, invested in trust, and stopped living like beggars.
They didn’t wait for permission or pity. They built fundraising insurance.
As Dr. Bindra discovered in his GIVE Study research: Nonprofits that adopt a legacy-first mindset from inception — regardless of their age or current size — outperform those waiting for scale. The framework works because it shifts the psychological story from scarcity to permanence, from urgency to stewardship.
Small nonprofits don’t have to stay small financially — but they do have to think big about their mission’s longevity. That’s what endowments do. They announce to the world: “We’re not going anywhere.”
The Takeaway
You wouldn’t run your household without life insurance. You wouldn’t run your business without liability coverage. So why run your nonprofit without fundraising insurance?
It’s not idealism — it’s survival. And survival, in today’s economy, is the most moral thing a mission can do.
As explored in “When Ancient Wisdom Meets Modern Giving”, generosity has always been about legacy — a moral commitment to continuity, not convenience. Planned giving simply translates that ancient truth into modern structure.
If your organization doesn’t yet have fundraising insurance, start today. We can help you establish a foundation for long-term stability while you focus on today’s goals.
In fundraising, emotion gets attention. Discipline gets results. Stability gets both.
Sources & References
Quoted with permission from Eric Werner, Endowment Strategist at Raymond James (2025 correspondence).
Primary Research & Data
- National Center for Charitable Statistics (NCCS) — Nonprofit size and closure rate data via Philanthropy.org
- Urban Institute — Form 990 analysis and government funding vulnerability data (2024–2025)
- Cerulli Associates — Wealth transfer forecasts (via Raymond James)
- Dr. Sanjay Bindra — GIVE Study on zero-staff nonprofit donor retention and behavioral philanthropy framework
- Center for Effective Philanthropy (CEP) — Endowment research and foundation leader insights
Detailed Sources
- Urban Institute (April 2025) — Government Funding Cuts Put Nonprofits at Risk across the Nation
- Chronicle of Philanthropy (August 2023) — Government Grants Were Key for Nonprofits During Early Covid Crisis
- The Conversation (May 2024) — Government support was key for thousands of US nonprofits battered by COVID-19’s early costs
- The Conversation (November 2025) — 1 in 3 US nonprofits that serve communities lost government funding in early 2025
- Philanthropy.org — Small and Mighty: How Dr. Sanjay Bindra Built a Zero-Staff Nonprofit That Changed the Game
- Philanthropy.org — When Ancient Wisdom Meets Modern Giving
- Center for Effective Philanthropy — Endowments are Great — But Sustainability and Autonomy are the Greater Good
All statistics, data points, and research findings in this article are sourced from the references above and represent peer-reviewed research, IRS Form 990 analysis, and direct institutional correspondence.
