For most nonprofits, fundraising still starts, and often ends, with individual giving. According to Giving USA, individual donors remain the largest source of charitable funding, accounting for roughly 66% of all giving nationwide.
But the funding landscape is shifting.
One of the fastest-growing opportunities for nonprofits today is grant funding, particularly from institutional and foundation funders. Foundation giving is now the second-largest source of charitable funding in the U.S., representing nearly 20% of total giving. In real dollars, that’s more than $100 billion annually flowing through foundations each year.
That growth signals a significant opportunity, but it also exposes a hard truth: many nonprofits are pursuing grants before they’re truly ready to compete for them.
Why Many Nonprofits Pursue Grants Too Early
I often hear comments like this from nonprofit leaders:“We knew we needed to diversify our giving. We saw opportunities to grow in the area of grants, but we had never made it a priority.”
Grants are frequently viewed as the logical next step when organizations want to diversify revenue. However, without intentional preparation, grant seeking often becomes reactive and driven by looming deadlines rather than a long-term funding strategy.
Another common frustration sounds like this: "Our grants program was not producing the type of funding that we had hoped.”
In many cases, the issue isn’t effort, ambition, or even writing ability. It’s readiness.
Foundations are increasingly sophisticated, data-driven, and focused on long-term impact. Strong writing alone is no longer enough. Grant success today requires clearly defined strategies, well-documented needs, and measurable outcomes—all of which are signals of organizational maturity and reliability.
Why Grant-Readiness Matters
As foundation giving continues to grow, expectations have grown with it. Organizations that invest in grant-readiness before applying consistently outperform those that don’t.
Targeted, well-aligned applications save time and money. Rather than chasing every opportunity, grant-ready nonprofits focus on funders that align with their mission and capacity, leading to a reduction in staff burnout and an increased return on effort.
Readiness also strengthens funder relationships. Funders can quickly tell when an organization is prepared to steward their investment. Clear financial practices, realistic budgets, and strong reporting systems build confidence and position nonprofits for renewals, not just one-time awards.
In our work with nonprofit partners, grant-readiness consistently emerges as a central success factor. Organizations with documented strategies, transparent finances, and clear performance metrics are simply more competitive.
What “Grant-Ready” Really Means
Being grant-ready does not mean having a large grants department or years of foundation funding behind you. It means your organization has the alignment, capacity, and credibility funders expect.
Alignment
Your mission, programs, and funding priorities are clearly defined—and your team can articulate why your work matters succinctly. Funders want to see a clear connection between their priorities and your purpose. Organizations that practice articulating their “why” are better positioned to demonstrate fit and relevance.
Capacity
You have the staff time, systems, and workflows needed to apply for, manage, and report on grants without derailing daily operations. Grant funding is often “slow money.” Long lead times can challenge organizations with tight cash flow or reactive management approaches. Grant-ready organizations plan for these timelines rather than being caught off guard by them.
Credibility
Your financials, governance, documentation, and compliance practices demonstrate that your organization is stable, trustworthy, and well-managed. Strong, transparent financial practices consistently correlate with grant success.
When these elements are in place, grant funding can become a strategic growth lever, not a scramble.
The Nonprofit Grant-Readiness Checklist
To help organizations move from intention to execution, we developed a practical grant-readiness checklist designed specifically for nonprofits. This checklist looks at the core areas foundations often evaluate when deciding whether to invest.
- Strategic Alignment & Mission Clarity
- Program & Impact Readiness
- Financial & Compliance Readiness
- Leadership & Staff Capacity
- Board Engagement & Governance
- Grant Strategy & Systems
- Relationship & Stewardship Readiness
Download the full Grant-Readiness Checklist to assess where your organization stands and identify priority gaps.
Common Grant-Readiness Gaps
Across nonprofits of all sizes, similar challenges surface again and again:
- Weak or inconsistent outcomes data
- Over-reliance on a single funding source
- ‘Chasing’ grants that don’t align with programs
- Limited internal ownership of grants after submission
Funders want assurance that organizations are not dependent solely on grants, and that grant funding complements a diversified revenue strategy. Left unaddressed, these gaps limit growth and strain already stretched teams.
Next Steps to Become Grant-Ready
If your checklist revealed gaps, start with the fundamentals:
- Clarify programs and define what success looks like
- Strengthen financial and compliance systems
- Build performance metrics and data collection into programs early
- Define a realistic grant strategy based on actual capacity and timelines
For many organizations, this is also the moment they recognize that grants can’t live as a side project.
As one nonprofit leader shared: “As we execute our five-year strategic growth plan, we’ve recognized that outsourcing grant development is essential to fueling sustainable growth and expanding our leadership capacity.”
If you’d like expert guidance in interpreting your checklist results and identifying the most impactful next steps, the DickersonBakker Grant Solutions Team offers a Grant-Readiness Assessment at no charge.
You'll walk away with:
- A clearer view of your grant-readiness
- Your next best step
Schedule your Grant-Readiness Assessment and take the next step toward sustainable grant funding.
