If you’re a small nonprofit just starting to pursue grants, there’s often an expectation that grants should start bringing in money quickly. After all the work you put in to get “grant-ready” – securing your 501(c)(3) status, getting a Board-approved budget, and even committing the resources to finally have your financials audited – you and your Board are eager to see those grant dollars starting coming in.
Sector-wide data shows that private foundations on the whole have between a 10-30% success rate for grant applicants. That’s not too bad, right? Put out 10 grant applications and potentially get 3 funded?
Not so fast. Drilling down into that data we can see that new nonprofits face some major obstacles to being part of any successful pool of grant applicants. In fact, only 10-25% of new nonprofit organizations have secured a grant after several years, with the average organization taking more than two years to secure its first grant.
So what does this mean for your organization? It means you need to reframe how you define success in year one of pursuing grants. Here is what to expect in year one and how to stay focused on what actually matters (hint: it’s not revenue!).
Rethinking your grant strategy in year one
If you are within your first year of pursuing grants, I recommend thinking of them as a nice-to-have, not a must-have. In an ideal world, I would recommend that you do not even include grant revenue in your first-year budget (head explodes).
Wait, what? You have a Board that expects results, and you have made time and financial investments specifically to pursue grants. You have expectations of yourself to show that your strategy to pursue grants is working. And here I am telling you not to project any grants revenue?
Listen: I get it. Telling your Board that you’re not projecting any grant revenue can feel like a nonstarter. But even if you do include grants in your budget, one thing is critical: Your expectations should be extremely conservative.
What your first year is actually for
Instead of focusing on revenue, think of your first year of pursuing grants as the “getting to know you” phase of foundation fundraising. This is your start-up period. Your job is not to win as many grants as possible. Your job is to:
- Introduce your organization to a small group of foundations that are closely aligned with your mission
- Clearly communicate your mission and programs
- Begin building familiarity and trust
- Follow up thoughtfully when requests are declined
- Above all, be consistent
While there are foundations out there that specifically seek to fund small, start-up nonprofits (shout out to The Lenny Zakim Fund here in Boston) most foundations tend to fund organizations they recognize and trust. They want to know that a nonprofit applicant can deliver on the outcomes they have outlined in their application. And if they don’t know you, or don’t see other foundations investing in your work, you are at a significant disadvantage … for now.
Expect rejection—and use it
During this first 12 months, you will likely hear “no.” A lot. That’s not a sign that you’re doing something wrong! It’s just a sign that you’re early in the process and are well within the introductory phase of pursuing grants.
A healthy mindset in the first year of pursuing grants is to expect rejection. To use that rejection as a way to continue the conversation with a foundation that is just hearing about your work for the first time (see our article on What To Do if Your Grant Application is Declined). During this period, if you can shift your mindset and think about success not as grants dollars but as positive touchpoints, you will make major strides towards winning grants over the long-term. And you will learn from every declined application how to improve your case for support.
Why this approach actually works
If you can stay in the process for a full year, you put yourself in a completely different position moving forward. By year two, you have:
- Introduced your organization to multiple funders (and hopefully have actual points of contact at those foundations)
- Built real application experience and improved your case for support
- Positioned yourself to reapply with a much stronger likelihood of success
You are no longer starting from scratch. And that alone puts you ahead of most organizations pursuing foundation grants.
What to tell your Board
This is often the hardest part. Instead of positioning grants as a quick revenue solution, talk with your Board honestly and set expectations early. Lines like this will help ground you and your Board:
- “Year one is about building the foundation for long-term grant funding.”
- “We are prioritizing consistency, relationship-building, and learning the process so that we can generate more reliable revenue in future years.”
Together with your Board, you can move from thinking about grants as a short-term gamble to a long-term winning strategy.
Final thought
Grants can – and should – absolutely become a meaningful and sustainable source of revenue for your organization. But they don’t work well under pressure to perform immediately. If you treat your first year as an investment, you give yourself the space to build something that actually lasts.
About Page Consulting Group
Page Consulting Group helps nonprofits secure foundation funding through a proven three-phase process grounded in research, strategy, and execution.
We bring senior-level expertise and real client experience to help small and mid-sized nonprofits build grant approaches that are clear, focused, and sustainable.