Foundation Grants Are Harder to Win This Year: How to Compete When Requests Are Up

The proposal was strong. The program is proven. The funder had given before. And the answer was still no, with a note about an unusually competitive cycle.

If that has happened to your organization this year, it is not a verdict on your work. The Center for Effective Philanthropy's State of Nonprofits 2026 report found that 57 percent of nonprofit CEOs say it has been harder to secure foundation grants since January 2025, and 44 percent report reduced funding from foundations in that time. Requests are up, and the money has not kept pace. Here is what changed, and what the organizations still winning grants are doing differently.

Why foundation grants got harder

Two things happened at once. Government funding was cut or delayed for many organizations, and those organizations turned to foundations and to the same individual donors everyone else depends on. Foundations responded: in CEP's research, most foundation leaders reported increased demand, and many increased payouts or opened rapid-response funds. But a foundation that receives twice the requests with a modest increase in grant dollars still says no more often than it used to. One nonprofit leader in the CEP report put it plainly: organizations that never held federal funding feel the downstream effect, because former federal grantees are now competing for the same private dollars.

The financial picture behind the competition is stark. Sixty-six percent of nonprofit CEOs told CEP they are concerned about their organization's financial stability, and the share of nonprofits reporting a deficit rose to 39 percent in 2025 from 22 percent in 2022. Every one of those organizations is applying harder than it did three years ago.

What still wins: fit before volume

The instinct under pressure is to apply everywhere. The organizations winning in this cycle apply to fewer funders and fit them better. A foundation's published priorities, its recent grantees, its typical grant size, and its geography tell you in twenty minutes whether a request has a chance. If your program does not match what a funder has actually funded in the last two years, the strongest proposal in the world is a long shot. Our article on finding grants your nonprofit actually qualifies for covers the matching work, and what funders really look for covers what they read once you apply.

In a crowded cycle, the funder is not choosing the best organization. The funder is choosing the best fit. Be the fit.

What still wins: a relationship before a request

Program officers are reading more requests than ever, and a name they recognize reads differently from a name they do not. A brief, well-aimed letter of inquiry, a phone call to confirm fit before applying, a thank-you and a short update after a decision either way: these are the habits that turn a cold application into a warm one over two or three cycles. They cost time, not money, and they are exactly the habits small teams drop first when the calendar fills. Our article on the letter of inquiry explains the document that starts most of those relationships.

What still wins: evidence and a budget that adds up

Funders under pressure fund what they can defend to their own boards. That means outcomes stated in plain numbers, a budget that matches the narrative, and an honest account of what the organization will do if the grant is smaller than requested. Requests for general operating support are worth making where a funder offers it, because unrestricted money is the money that keeps the doors open in a year like this one. Our articles on the grant budget that gets approved and restricted and unrestricted funds cover both.

What still wins: a pipeline, not a lottery

A single large request is a bet. A calendar of well-matched requests across the year, with renewals, letters of inquiry, and new prospects at each stage, is a program. Organizations with a pipeline can absorb a no because another decision is always pending; organizations without one treat each rejection as a crisis. The pipeline is also what makes fit possible, because it gives you time to research before deadlines arrive. Our article on building a grant calendar you can keep is the starting point, and grant renewals covers the part of the pipeline most organizations neglect.

The research, the matching, and the writing are the work our Grants department does every day for organizations that do not have a grant writer on staff. See how our staff find and write the grants that fit your mission.

What to stop doing

• Sending the same proposal to every funder with the name changed. Reviewers can tell.
• Applying without reading the funder's recent grants. Fit is visible before you write a word.
• Skipping the letter of inquiry when one is invited. It is the cheapest way to learn whether to apply.
• Treating a decline as the end. Ask what would strengthen a future request, and write it down.
• Letting the pipeline empty while you wait on one decision.

Questions nonprofits ask about this year's grant climate

Are foundations giving less?

Most are giving the same or more. Demand has risen faster than their budgets, so the share of requests funded has fallen. CEP's research shows both the increased demand and the increased difficulty nonprofits report.

Should we apply to more funders to compensate?

Apply to more well-matched funders, which usually means researching more and applying to about the same number. Volume without fit lowers your success rate and burns the hours you need for the requests that could win.

Is now the time to ask for general operating support?

Yes, wherever a funder offers it. Many foundations have loosened restrictions in response to the sector's strain, and unrestricted funding is what carries an organization through a deficit year.

How do we compete with organizations that have a full-time grant writer?

With the same three things: fit, relationships, and evidence. The writer's advantage is time. Our staff supply that time for organizations that cannot hire it.

Your mission is bigger than this cycle

A harder grant climate is a reason to get more precise, not to give up on foundations. The organizations that come through it are the ones that match well, follow up, and keep a pipeline moving while everyone else waits on a single answer. You do not need to become a grants expert on top of everything else. You need a staff that is already researching, already matching, and already writing while you lead the mission only you can lead. Find out what our staff can do for you.

Zoya Syal is Content and Production Manager at Nonprofits Engine, where she leads the content and testimonial work for a team that helps small nonprofits get set up and funded.