Your Funding Was Cut or Is Ending

Five steps for the first 30 days after a stop-work order, a termination or a grant that will not be renewed.

WhatsAppEmail
  1. Step 1: Read the notice and stop what it tells you to stop

    Note the effective date, which costs are still allowed and what you must report. Keep spending on anything the notice stops at zero from that date.

    Topic: Grants Management and Compliance
  2. Step 2: Work out your cash position

    Forecast cash week by week for the next three months, including costs you owe even if the work stops, such as rent, severance and final audits.

    Topic: Finance and Budgeting
  3. Step 3: Look after staff and the people you serve

    Plan notice, severance and a responsible handover or exit for program participants before announcing anything.

    Topic: Organization: Governance, People and Operations
  4. Step 4: Close out properly

    Submit final financial and program reports, settle what you owe, return or dispose of equipment as the agreement says and keep your records.

    Topic: Grants Management and Compliance
  5. Step 5: Start rebuilding your funding mix

    List the funders you could reach in the next six months and one source of unrestricted money you could grow.

    Topic: Proposals and Fundraising

What This Covers

This page is for directors and finance or program leads at nonprofits whose funding has just been cut, suspended or terminated. It starts with the first days: reading the notice, protecting staff, telling partners. It moves on to closing out the award properly, and ends with the slower work of reducing your dependence on any single funder.

Start Here

Do these first, roughly in this order.

Key Concepts

  • Termination notice: a formal message from a funder ending an award before its scheduled completion.
  • Stop-work order: a formal directive to suspend all or part of a project immediately, typically used under contracts.
  • Close-out: the final step of an award, confirming that activities are complete, funds accounted for and reports submitted.
  • Furlough: a temporary cut in hours or unpaid break, with staff expected back soon.
  • Layoff: an end to the employment relationship, generally the better choice when no end to the disruption is in sight.
  • Redundancy (the term in some countries): a form of dismissal used when you can no longer afford roles or have restructured them away.
  • Reserves: unrestricted funds that management and the board may use as they choose, unlike restricted program money.
  • Financial diversification: widening your sources so a shock is less likely to hit all of them.

Templates

AI for This Topic

An assistant can produce a first draft of a final progress report from your project notes (the funder report playbook shows how), prepare a questions and answers sheet for managers running consultation meetings, or brainstorm earned income ideas from the role you play in your community.

Check every line of the output against your real results before using it.

Something else?