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Nonprofits and the Scarcity Mindset

Nonprofit organizations are on the frontline of fighting hunger, disaster relief, animal welfare and many, many other causes that impact our lives and our communities. Sometimes we feel overwhelmed, and this can lead us to feel like we can never do enough. Another phrase for this feeling is “scarcity mindset,” where we feel that the need for our services is greater than the funds or resources we can raise.

Understanding the Scarcity Mindset

The scarcity mindset refers to a cognitive bias wherein individuals or organizations perceive resources as limited, leading to a fear of shortage and a relentless pursuit of acquiring more. This mindset can manifest in various ways within the nonprofit sector. Nonprofits, driven by their mission to make a positive impact, often face limited funding, time, and personnel resources. Consequently, they may adopt a scarcity mindset that perpetuates feelings of inadequacy, competition for resources, and a fear of failure. Click HERE for reference article.

When an organization is mired in scarcity, leadership tends to be very cautious. The focus is on maintaining rather than growing. Leadership avoids anything that feels like a risk such as adding a new program or serving more people. This risk aversion can limit their ability to adapt to changing circumstances and find sustainable solutions to complex problems.

If we feel like there is never enough (money, time, volunteers, etc.) then we probably feel like someone else (or another agency) has more than we do. This creates competition where there should be cooperation. A culture of scarcity can also undermine the morale of staff and increase burnout.

Employee Morale and Burnout

The scarcity mindset can also impact the well-being of nonprofit staff. Constantly operating under the fear of resource scarcity can create a stressful work environment, affecting employee morale and increasing the risk of burnout. Nonprofits need motivated and passionate individuals to drive their missions forward, and a scarcity mindset can undermine the sense of purpose and fulfillment among employees.

Overcoming the Fear of “Not Enough”

Optimism and innovation are the tools necessary to beat scarcity thinking. This begins with leadership. It is important for nonprofit organizations to focus on building a culture of abundance and generosity. This can involve setting long-term goals and planning for the future, as well as being open to new ideas and taking calculated risks. Your executive director and your leadership team set the example by supporting creative solutions and being positive about the work that needs to be done.

Collaboration and Networking

Nonprofits often operate in collaboration with other organizations, leveraging partnerships and networks to achieve common goals. However, the scarcity mindset can breed a sense of competition rather than cooperation. Nonprofits may become hesitant to collaborate, fearing that sharing resources or information may jeopardize their own position.

As the fundraiser you can show how to diversify funding resources and identify new partnerships. This isn’t just good business, it’s a best practice for nonprofits. Another positive step is to collaborate. By sharing expertise and resources, nonprofits can tackle challenges collectively and really make a difference in their community.

By adopting an abundance mindset, nonprofit organizations can better position themselves to achieve their mission and make a positive impact in their communities.


Michelle Crim, CFRE

Dynamic Development Strategies can help. We offer coaching, grant writing, and fundraising services for our nonprofit clients. We specialize in small to mid-size organizations because we understand your challenges. Please contact us for more information.

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