Don’t Let Your Grant Get Lost in the Sauce

The first thing I do when I sit down with a new client is review their financials and talk about checks and balances. This isn’t just because I have a financial background. It’s because if your nonprofit doesn't manage its finances well, no funder is going to trust you with theirs.

Many nonprofit leaders view a grant as free money. But take it from a grant writer: there’s no such thing. All money has strings attached. Grantmakers are investors. They expect a return, not in profit, but in impact and accountability.

I spent nearly a decade serving on a grant review committee, eventually becoming chair before rotating off. I’ve been in the room where decisions are made. I’ve seen which applications make it through the gauntlet and which never even reach the discussion table.

Here’s how the gatekeeping works.

Step One: Funding Fit

The first gatekeeper reads the application to see if it aligns with the foundation’s funding priorities. This is where many nonprofits get weeded out. If you're trying to shoehorn your program into a funder's stated focus, it shows. You’re competing with dozens, sometimes hundreds, of nonprofits that actually align. You won’t make it past this stage unless your mission clearly fits the funder's goals.

Step Two: Financial Review

The second gatekeeper reviews your budget, Form 990s, and financial history. If those don’t hold up, you’re out. These aren’t emotional decisions. Reviewers have a fiduciary responsibility to the board that nominated them. If your numbers don’t add up, or if you’re asking for more than your organization can realistically handle, you won’t make it into the room with the decision-makers.

Let me put this in perspective. If you're a small nonprofit with an annual budget under $50,000 and you're asking for $10,000 or more, that’s a 20% growth request. Can your organization handle that growth? Does your profit and loss history show any precedent for this scale? These are the questions being asked—whether you realize it or not.

Another red flag: if you're asking for $20,000 to serve 50 people, that's $400 per person. That may be justified, but you'd better believe you're being compared to other applicants. Review committees are looking for the biggest impact for the dollars spent. They want to stretch their grantmaking as far as possible.

And here’s the kicker: your budget is often the part of the application that nonprofits spend the least amount of time on. Yet it's one of the most scrutinized sections by reviewers. Most committees include at least one numbers person—if not several. They are not visionaries. They are details people. If your numbers don’t support your narrative, you're not getting funded.

The Paper Trail Matters

Your financial information is public. Anyone can access your IRS 990s or incorporation paperwork online, usually just one tax year behind. Funders will check to confirm your nonprofit status is active. If you’ve received a grant before, they’ll look to see whether you submitted your post-award report. Many foundations see the same applicants year after year, and committee members often serve for multiple cycles. They remember you.

Let me say that again: they remember you.

If you acted entitled, missed a reporting deadline, or failed to follow through, it will come up in the discussion. And if your grant wasn't funded and you called to argue or threaten legal action over feedback? That’s a fast track to being blacklisted. No one has ever argued their way into funding. If your application was misunderstood, take responsibility and try again next year—better and clearer.

What’s Behind the Curtain

Most people are unaware that the IRS mandates private foundations in the United States to distribute a minimum of 5% of the average market value of their net investment assets annually. This “5% payout rule” means that market performance directly impacts how much they have to give. It’s not a magic pot of gold. It’s a fluctuating resource with strict oversight.

So don’t make the mistake of thinking that a grant is a gift from people who just want to “make it rain” on your good idea. They are investors. They want to back strong leaders with good ideas, yes—but also with solid plans, realistic budgets, and proven capacity.

A Final Word

Your application is one of many in a large stack. Most won’t make it through. If you want to stand out, don’t just agonize over wording. Start with your attachments. Make sure your budget is competitive, your financials are sound, and your reporting is timely.

Don’t let your grant get lost in the sauce.