Anatomy of a No: Grant Makers Can’t Fund It All

In a recent post, I touched on how difficult grant making can be. Investing in nonprofit organizations takes a strategic eye, a commitment to partnership building and an enormous amount of consideration, time and energy. Today, I’d like to talk about another aspect of grant making that can be incredibly challenging for both grant makers and nonprofit organizations – saying no.

Generally, there are four situations where I say no to a potential grantee organization. I’ve outlined these situations below and have also included a short list of typical reasons a grantee might hear “no” at each of these stages.

Stage 1 – Cold Calls

Nonprofit development officers regularly reach out to corporate responsibility leaders and foundation officers as prospects. It’s not atypical for foundations and corporations to say no at this stage.

Potential reasons for a “no” at this stage:

  • A request at this stage is often declined because it is out of the company or foundation’s giving guidelines. My company has three areas of focus – environment, STEM education and health and safety. If a fundraiser calls me from a theater or music organization, my answer will always be no. As much as I care about those causes personally, they will never fit within my company’s guidelines.
  • Your organization may be geographically undesirable for the company or foundation. My company’s Americas headquarters are in downtown Chicago. This is also where I work. But of the 20,000 or so employees in the USA, less than 300 of them work in this office and even less than that live in Chicago proper. For this reason, a majority of the organizations we fund that are based in Chicago actually provide services in nearby Northwest Indiana, where a majority of our employees live and work. So while a fundraiser may see a Chicago based company and fit within our guidelines, it’s possible they would not fit our guidelines based solely on the areas of Chicagoland they serve.
  • I won’t lie to you, delivery means a lot at this stage. If a fundraiser hounds me via email or phone or is disrespectful or overly pushy when we do connect, it’s very difficult to want to move you to the next stage in our process. Grant making is relationship building, not selling. If someone is clearly selling me rather than finding a true fit for a potential partnership, it’s unlikely you’ll continue in our process.

Stage 2 – Fact Finding Meeting

For an organization who may fit my company’s giving guidelines, I will often begin our relationship with a fact finding phone call. I want to learn about your organization and tell you more about what my company does and how we invest in organizations and programs. Our company, like many others, does not accept unsolicited grant requests. So following that initial phone call, my team and I make a decision on whether to invite the organization to apply for a grant. This is another situation where I could say no to a potential grantee.

Potential reasons for a “no” at this stage:

  • I like you, but others on my team or my leadership doesn’t. That may sound blunt, but it can be the truth. No matter how much the head of CR likes an organization, there are still multiple levels of approval required. Boards of Directors, CEOs, employee committees, the list goes on. No matter how well you think that meeting went, winning over one or two people isn’t enough.
  • Budgets. Some organizations set their budgets at very specific times of year and then stick only to those allocations. Therefore, if you’re pitching at the wrong time, you might hear a no. Additionally, a corporation might have a difficult quarter and decide to hold off on grant making until things look better. When working with corporations, you are a slave to the business environment in many ways. If this is the reason for a no, take it in stride. Budgets always look up at some point!
  • You couldn’t answer the hard questions. When you enter a meeting with a potential funders, know your numbers. What is your budget? How much did you spend last year? How many beneficiaries? How do you track success? We aren’t just handing out checks because we think you’re nice. You have to show us that you know how to do your job well.

Stage 3 – Post Grant Application

After we invite an organization to apply for a grant, we may choose not to approve that grant or it may be declined by our Board of Directors. This is absolutely the most difficult “no” to give. At this point, an organization has gone through the grant writing process and has high hopes for a grant. Saying no now is difficult, sometimes even heartbreaking.

Potential reasons for a “no” at this stage:

  • Numbers, numbers, numbers. We don’t ask you to upload your 990’s and other key financial documents as a formality. We actually read them. And if your numbers don’t add up, you’ll often hear a number of questions and potentially “no.” Have you had years of deficit? Or on the contrary, are you ridiculously over funded? We look for red flags in every financial document.
  • You missed deadlines or didn’t complete our grant application fully. Plain and simple, if an organization doesn’t take the time to upload a budget, I don’t have the time to fund you. We recognize grant writing is hard and time consuming, but you have to jump through the hoops to get to the end of the course. That’s just the way it works.
  • See the above mention in budget – same rules apply here .

Stage 4 – Renewal

In nonprofit development, you’d like to think a foot in the door is guaranteed continual funding. Unfortunately, that’s not always true. After you’ve received a grant, the next stage where you might hear “no” is at renewal time.

Potential reasons for a “no” at this stage:

  • Did you steward the grant effectively? No funder wants to hear from a partner only at renewal time. We want to know what is happening throughout the year. Did our employees have a volunteer opportunity? Did you tell me about successes or setbacks in the program? I don’t want to be surprised by your grant report. Communicate early and often throughout the cycle of a grant.
  • Did you deliver on your grant’s promises? If you said you would serve 1,000 beneficiaries and you serve 100, there are major questions that need to be answered. If you didn’t deliver on what you promised, you must have a strong reason why and you should have communicated that fact throughout the year, not just at renewal time.
  • Have you experienced staff turnover that has negatively affected your relationship with the funder? Recently, a nonprofit I worked with went through a major leadership transition and didn’t inform me or anyone else in my company until their grant was up for renewal. Imagine our surprise when a completely different person was calling us and we had no idea what was going on. Funders want to be informed, they want to know what’s happening with your organization. Stay open even if the news isn’t good.

Each of these situations is difficult in their own right, for the funder an the potential grantee. Saying no isn’t easy on our end either. Even organizations with significant financial issues are trying their best to do great work in the social sector. Funders know that. You have to put yourself in our shoes. We can’t try to “boil the ocean” and fund every great nonprofit on the planet. That wouldn’t work for anyone.

Above all, when you hear “no” from a funder, don’t be discouraged by it. Recognize it, ask for feedback, learn the real reasons for the answer you’ve received, and move on. There will be another funder. And perhaps there will be another opportunity with that funder. Take the time to see these things as strategic learning opportunities and you will go far.

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