If you’re running a small nonprofit and are pursuing grants, you’ve probably heard some version of this advice: “Just get into a grants database, find a list of funders, and start applying!” That approach was never especially effective, and it’s becoming less viable by the day.
Foundation funding has gotten more competitive. Candid has been reporting on growing financial pressure across the nonprofit sector, which is pushing more organizations to pursue the same limited pool of funding. Meanwhile, most foundations haven’t increased their staff or grantmaking budgets to match that demand. You can see where this is going.
We’re seeing this play out in real time. A well-known local foundation here in Boston, that in the past had been open to new applicants, recently moved to an invitation-only process after receiving 200 concept letters for just 12 to 15 grants in their latest round of funding. Funders like this are being forced to make dramatic changes to their processes so that they can sift through the overwhelming number of applicants.
What is happening with this local foundation is not an isolated change. With government funding dramatically down, the pressure on private philanthropy to fill the gap is up. This means more nonprofits are applying for foundation grants, increasing the overall pool of competition. It’s no surprise to see Candid reporting that nearly 60% of nonprofit leaders say it’s been harder to secure foundation grants.
If you’re still treating grants as a numbers game (more applications = more funding), it’s worth rethinking your approach. A more focused strategy starts with how you identify funders, which is why we spend so much time with clients on prospect research before anything gets written (see here for tips on how to find funders efficiently and effectively). The goal is not more grants, but the right grants to the right funders.
AI is Changing the Game, But Not in the Way People Think.
The increased number of grant applications is not just being driven by need, but by newly available tools, mainly AI. My colleague, Nicole Castillo, wrote recently about how AI is creating a new kind of digital divide in the nonprofit sector. What we’re seeing on the grants side lines up with that.
AI is making it easier to produce a grant proposal with far less time. That’s not a bad thing. But it’s important to recognize that with more nonprofits empowered to use these tools, the overall pool of applicants is likely to increase across the board.
If you are one of those organizations using AI to create content for grant applications, exercise extreme caution (see our Four Grant Writing Traps of Small Nonprofits article for a more in-depth look at the use of AI for grants). Just like with the overuse of grants databases to generate a long list of foundation prospects, AI may empower you to apply for more grants, but it won’t necessarily increase your chances of success – and could even harm you. Your application may quickly slip into the pile of generic-sounding content (that reviewers can easily recognize as AI-generated) and don’t necessarily reflect the unique voice and story of your organization.
The key takeaway here is: acknowledge the increase in competition for grant funding, and look for ways to stand out from the pack. Building a great case for support – a 3-5 page document that addresses core grant application questions such as mission, vision, program descriptions, and key strategic priorities – to rely upon for content is an important step in strengthening all of your grant applications.
But there’s another key component that is often overlooked: outreach.
Outreach is More Important Than Ever
There’s still a tendency to think of outreach as something extra. Of all the great procrastination buckets of grant writing, outreach is right at the top of the charts in terms of things you’ll “get around to” later. Listen, we get it. As a team of introverted grant writers, we know it’s pretty easy to find an excuse not to pick up the phone or write an awkward email.
Unfortunately, if you want to stand out, the days of hiding and hoping the outreach will just happen (or that it doesn’t really matter) are over.
Outreach needs to be integrated into your entire grants process. What exactly do we mean by that? Think of outreach in three key stages:
1. Pre-application: At a minimum, you should be reaching out to prospective foundations about a month before a grant application deadline. Six to eight weeks is even better. The goal isn’t to pitch a grant application concept or overcomplicate things. It’s to introduce your organization, share a bit about your work, and get a sense of whether the alignment between your organization’s mission and programs and the priorities of the foundation is actually there. That alone can save you a significant amount of time.
When the fit is there, those early conversations give you something you won’t get from guidelines alone. You start to understand what the funder is really focused on right now, what they’re seeing too much of, and how your work might come across. That context tends to show up in the proposal, even if it’s subtle, and it can make a real difference.
And If there isn’t alignment, it’s far better to find that out early than after you’ve invested hours into an application.
2. Application: As we noted above, take the time to build a great case for support for your organization so that every application process is streamlined and your unique voice and story comes through to the donor. Utilize AI to help hone and tailor your message to a specific funder, but not as the engine to create new content. Your grant application is still the most important piece of all your communications to a prospective foundation donor, so don’t shortcut it.
3. Post-application: Not every first application is going to get funded. In fact, usually it won’t! But if you’ve had even a brief exchange with a program officer, or introduced your work ahead of time, you’re not starting from zero the next time around. You’re continuing something that already exists, even if it’s just a small connection. Remember that if you are a small nonprofit and are just getting started with grants, your first year of grant applications isn’t about revenue. Year one is your “getting to know you” year of building foundation relationships.
One of the most consistent missed opportunities we see is what happens after a grant is declined. Getting into the world of grants means that you have to learn to embrace rejection (isn’t this one of the most important life skills too?) and even, dare I say, expect it.
Foundations are inherently conservative philanthropic organizations. They are generally seeking to make grants to advance their own mission and want to see a “return” on their investment based on the outcomes nonprofits present and report upon. This means that small nonprofits, or those applying for the first time, are unlikely to get funded right away. You have to be willing to play the long game if you want to be successful.
A lot of organizations just move on after having a grant application rejected and never take the opportunity to learn why. A short follow-up can go a long way (see here for more specific instructions on What to Do if Your Grant Application is Declined). Sometimes you’ll get useful feedback. Many times you won’t. But even a brief email or phone call keeps the door open and signals that you’re interested in improving and staying in touch. Start getting in the habit of doing this for every application and over time, it will add up.
If your grant application is awarded, be sure you closely read the terms of the grant award and ensure you are aware of any reporting requirements. Nothing destroys a great relationship with a donor faster than forgetting a report deadline, or having to fess up that you didn’t meet the goals you set out to achieve.
Make sure to track any outcomes that you stated in your grant application and check in on your progress throughout the year. Share small wins with the donor outside of the reporting process and, if you are not on track to meet your goals, reach out for a conversation way ahead of any report deadlines. Foundations tend to respond well to nonprofits who proactively discuss inevitable challenges with them early on, and sometimes they can even help present solutions. The key with all of this is open communication with the donor.
But whether you are awarded or declined, if you sense from your outreach to the donor that there is potential alignment between your organizations, get creative about other touchpoints – such as a quarterly newsletter, a feature in a local media outlet, or a successful event – to share with the program officer so that not all of your communication is coming in the form of an “ask”.
The Bottom Line
There are more applicants now. More competition. More proposals that are decently well-written but increasingly similar.
In that environment, outreach isn’t a nice addition to your grants process. It’s part of how you make the process work.
It helps you focus your time, strengthen your applications, and start to build the kind of familiarity that makes it easier for a funder to say yes.
And for small or lesser-known organizations in particular, that can be the difference between being considered and being overlooked.