Grants are Tougher Than Ever: Seven Tips to Survive a Grant Drought

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By Dana Schuler Drummond, MA, CFRE, GPC

August 2025

Bottom line: Grant seeking is tougher today than at any time in my 35-year career. While this doesn’t make grant seeking impossible, nonprofits must have realistic expectations, maintain a dedication to best practices, and be willing to invest in a diverse funding strategy.

Since I began working in the nonprofit world, I’ve survived the 1988 recession, the 2008 housing market collapse and recession, and the COVID-19 pandemic.

Despite the unique challenges of each era, I’ve maintained optimism that nonprofits can continue seeking and securing grants.

This year, grant seeking is more difficult and competitive than ever. Here’s why – and seven things you can do to survive.

Why? 

We have a “perfect storm” of barriers:

·         More nonprofits – In 1980, there were only 32,000 nonprofits in the US. By 1995, there were 514,000. Today, there are nearly two million nonprofits competing for funding.[i]

·         Increase in Donor-Advised Funds (DAFs): DAFs are the fastest growing philanthropic tool in the nation.[ii] Because these funds are housed within another organization (a community foundation or wealth management firm) nonprofits can’t easily research the fund. DAFs are also not required to make charitable gifts within a certain time period, unlike private foundations.

·         The end of ARPA – The $1.9 trillion in ARPA funds have to be spent by 2026[iii], meaning grant opportunities tied to ARPA have mostly been exhausted.

·         Legislative and Administrative Chaos – The OBB law passed in August 2025 is estimated, among other issues, to create a $7 billion net loss in giving to nonprofits over the next decade.[iv]

·         Uncertain economy – the US Economic Policy Uncertainty Index[v] is at a record high. Individuals, families, and corporations are giving less – both in money and in volunteer time. This leaves nonprofits unable to meet their budgets.

·         Market Tension – Markets have rebounded since a stock drop earlier this year, but foundations and donor-advised funds give based on the performance of their investments. When markets are volatile, foundations may give only the bare minimum of 5% (averaged over five years). Some foundations are even pausing their grant making for a few years.

·         Government Cuts – Many government grant programs have been discontinued. In fact, there are some grants for which funds have already been allocated have been postponed or frozen. The volatility of Executive Orders and responding Court Orders[vi] means nonprofit funding opportunities and policies can change on a daily basis. When nonprofits lose federal funds, they turn to private grantors and individuals – sectors that are also giving less.

·         The impact of AI – Recently, a foundation representative in my area reported they had received TWICE as many requests than ever before – and that a majority of proposals were obviously written by AI.

While the appropriate use of AI in grant seeking is still being defined, thoughtless use of this tool may flood donors with requests. This slows down the work of foundations in reviewing proposals and distributing grants.  

·         Reduced Individual Donations and Volunteerism. Individual giving, which accounts for 67% of all philanthropic donations, is at its lowest level in years. Volunteerism (donated time) has also never rebounded after COVID.[vii]

·         Increased need – Homelessness, reduced Medicaid availability, less funding for education, global cuts to USAID, and the fluctuating economy all lead to increases in basic human needs such as housing, food, medical care, and social services. Nonprofit organizations are expected to be the world’s social safety net – and that takes money.

Here are seven key actions you can take to bolster your success and survive this era:

1.    Set realistic expectations. Depending on the population you serve and the mission of your organization, it may be tough to raise a lot of money in the next few years. Focus on your mission-centered programming and, if possible, avoid any new initiatives that may not be sustainable.

2.    Bump up your stewardship. Make sure donors hear from you regularly – not just when you are asking for more money.

Even grantors who don’t require a report may want to hear how their investment has made a difference. If you aren’t already spending time in stewardship, here are some easy ways to start:

·         A phone call from a board member or key staffer – just to touch base – is a great way to provide concierge-level stewardship to your grantors.

·         In today’s automated world, a hand-written thank you note (snail-mailed) stands out. Remember to include photos!

·         Even better, a note from a program participant describing how your nonprofit helped them will keep your nonprofit front-of-mind for donors.

3.    Increase the quality of your grants. If you aren’t doing it now, learn how to tell your organization’s story succinctly, using compelling narratives combined with objective data.

Update your organizational information – governance documents, profiles of key staff, and demographic information on your target population. What problems are you solving for those you serve and how does your work make the world a better place?

Don’t just ASSUME funders will understand the value of your work. Find objective examples that illustrate how important your mission is.

4.    Increase the quantity of your grants. Research shows that organizations who submit at least 20 grant applications each year are practically guaranteed to get at least one.

You shouldn’t use a shotgun approach to grants – writing one proposal and sending it to every funder in your area is a terrible idea.

Instead, commit yourself to researching and identifying at least 20 prospective grantors, then thoughtfully prepare appropriate proposals to garner results.

5.    Diversify your funding pie. Grants are only one way to raise money. The organization may have to rely more heavily on major donors, annual campaigns, events, or other fundraising to fill the gaps.

Nonprofit leaders must look at their funding pie chart and determine how to increase funding sources. Grant professionals who want to keep contributing to the organization’s success may want to help with these other efforts.

6.    Remember, fundraising is all about relationships, and grants are a form of fundraising. Cultivation and stewardship have never been more important than right now.

Thriving nonprofits have leaders who know how to maintain relationships with current stakeholders and build relationships with prospective donors.

7.    Get organized! Grant Holster is the perfect, no-frills way to keep your deadlines and grant information organized and at your fingertips.  No matter what tracking system you use, it is vital that you have an excellent system for maintaining your grant data.

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Dana Schuler Drummond is owner of Sharpshooter, a firm that has helped its nonprofit clients secure more than $90 million in grants over the last five years.

She is also founding president of the OK Chapter of the Grant Professionals Association. She was the first Oklahoman to achieve dual certification in grant seeking and fund raising.

Grant Holster is the first system designed for grant professionals BY a grant professional. Owned and designed by Dana, hundreds of grant professionals use Grant Holster every day to manage their deadlines and grant-seeking data.

[i] IRS data

[ii] Candid Insights

[iii] National Association of Counties

[iv] Market Watch

[v] Economic Policy Uncertainty Index

[vi] Thompson Grants; National Council of Nonprofits

[vii] National Council of Nonprofits