Top Six Reasons Why Grant Applications Are Rejected

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Don’t apply for a grant until you’ve checked these off your list.

As grant funders, we never like to say no. We believe strongly in the important work nonprofits are doing all over the country, and we want to see them succeed. Yet many of the applications we receive do not qualify for funding, often because of problems that could have been avoided with some preparation.

John D. Jorgensen, Consultant for First Nonprofit Foundation (FNF), offers insights into the top reasons why we have to say no to a grant application—and tips for getting your application into the “yes” pile.

  • They don’t follow the guidelines.

By far the number one reason why applications get rejected, not only for FNF but for most granting organizations, is a failure to follow the guidelines. “Too many people search for grants, find us and hit ‘Apply,’” John says. “And they’re requesting support for items that do not fit our guidelines.”

Think about it: If you’re requesting thousands of dollars in grant money, you need to take the time to read the basic funding guidelines published by the organization. Broadcasting applications to organizations that aren’t a good fit wastes your time, and theirs.

In addition to our guidelines, our website offers profiles showing the types of organizations we fund and offering explanations of why they were a good fit. “Our website is very clear because we show who we funded and our experiences with people, so it doesn’t take long to figure it out,” John says.

For example, FNF focuses our grant funds on projects that are replicable by other nonprofits. That focus is clearly stated in our mission and core values. More specifically, our guidelines state that we do not fund:

  • Salaries, including regular salaries and 1099 payments
  • Cash grants to individuals
  • Political work
  • Fund-raising events
  • Money to replace expiring federal grants
  • Scholarships
  • Deficits
  • International work, unless a component of the project is domestic.

Like all grant-making organizations, we’re serious about our guidelines because they are tied to our mission. In rare cases, we have worked with an organization to help them shape their project to meet our guidelines, for example with international organizations and special events, but only where their projects tracked closely with our mission. “We just started a plan to fund a really exciting project by an organization based in Israel, which we’ll be announcing on the site soon,” John says. “We worked with the client to ensure that a substantial element of the grant would be conducted here in the States, and it worked. But that process took more than a year.”

Solution: The number one tip for getting your grant approved? Read the guidelines.

  • They lack required documentation.

“The documents we require are the ones most funders will require,” John says. “Organizations should have these in order before beginning the grant application process.

  • Articles of incorporation showing your IRS status.
  • By-laws.
  • Meeting minutes.
  • Financial documents.

For large organizations, this is usually not a challenge, but it trips up many smaller grant requestors, and it is an instant “No.” “We can’t fund an organization that is not a verified 501(c)(3),” John explains. “Many of the documents we require are federally mandated.”

It’s critical to allow plenty of time to gather the necessary documentation as part of your grant planning. Getting all of these things together takes time, especially if it means starting new processes in your organization such as publishing meeting minutes. “People often get ahead of themselves,” John says. “Sometimes we have applicants who pass the initial check and move on into the application process only to realize they needed some critical piece. Unfortunately, by then it’s too late.” Often those applicants have to wait for the next grant cycle, which can be very frustrating.

“I had an applicant who didn’t have a 501(c)(3). They didn’t understand that we need to have certification from the feds to grant funds. They applied and showed us the letter, but we can’t work with that. We need the determination letter to verify the status,” John says.

Obtaining IRS certification can take 3-6 months. “One of our applicants applied for 501(c)(3) status back in January. They just got a notice in June about their status,” John says.

Solution: Research early and get all of your documentation in order before applying.

  • They don’t have a project budget.

“Many people have a hard time understanding the difference between their overall budget and their project budget,” John says. “The project budget is what you will use the grant money to do. Your overall budget is the organization’s total operating income and expenses.”

Your project budget should include detailed documentation to support the actual expenses your project will require. A ballpark request for funds to support a project or initiative will be rejected no matter how great the goal or idea.

Solution: Compile a detailed account of what your project will cost, including documents showing the basis of your expenses.

  • They don’t allow for the grant cycle timing.

Many people underestimate the time involved in the grant cycle. “We make our application process as simple as possible, but it still takes time,” John says. “People get frustrated when they get into the process only to realize they won’t be able to make the milestones.”

Grant funding is rarely a quick process. From initial application to receipt of funds takes months, sometimes the better part of a year.

Solution: Start your grant application research as early as possible and plan ahead for the organization’s funding cycle.

  • They don’t meet local requirements.

“Many applicants don’t realize that in most states charitable nonprofit organizations are required to register with their charity officials, usually within their departments of state,” John says. “Pennsylvania does, for example, and New Jersey does, too.” Discovering this too late can mean the difference between a successful application and a rejection. “Applicants should verify what is required locally and make sure they have those documents up to date and in order,” John says.

Solution: Check state as well as federal requirements.

  • Lack of project specifics.

Lack of specifics is a major reason for application rejections, not just at FNF but in grants generally. Many organizations focus on sharing their overall mission, challenges, and activities without laying out a specific project and expenses they want to fund. “I’ve received complete grant statements that told me all about the organization and never got around to what they want the money to do,” John says. “That’s an automatic ‘No’ as well.”

Solution: Describe the specific project you want us to support in detail, including the resources required, the anticipated response and the timeline of the project.

The formula for getting grant funding really boils down to preparation. That means researching the grant-making the organization, including their guidelines and requirements. But it also means doing the homework on your own organization and project, including your overall budget, a detailed project proposal and a full accounting of your anticipated project-related expenses. Organizations that put the time in to get their documentation in order are the ones that make it to the finish line.