How to Say No to a Grant (Without Burning Bridges)

Having been in the nonprofit world for most of my career, I recognize how tempting a grant award can be. It feels sometimes as though your development team is fighting tooth and nail for every individual donor and corporate sponsor. Meanwhile, your earned revenue keeps falling short of the goal. Grants are part of a broad revenue strategy that can sometimes feel like a foregone conclusion: We applied for the grant, so obviously we’ll accept it when it’s awarded! …right??

The answer is: MAYBE. Because the power is in your hands! For several reasons that I’ll outline below, your nonprofit doesn’t have to accept every grant award that it is offered! It’s important to understand why you might not accept a grant award, as well as how to communicate effectively with the funder so you’re not burning any bridges. In fact, this can build trust with the funder, since they now understand that you will put every dollar they give you to use.

Know when to walk away

Many of the most common reasons for declining a grant award are due to lengthy grant application cycles. If you apply for a grant and don’t hear back for 8-12 months, many factors could have changed in the meantime, both internal and external to your nonprofit. Maybe your program has changed since you initially applied, or a staff member’s departure left you without the capacity to carry out the project you proposed.

Moreover, grant awards are never guaranteed, so you’re likely to apply for many more grants than could possibly fund your program, knowing they won’t all be awarded. Let’s say you put out $500,000 in grant requests for a program that only costs $400,000, and you have secured $250,000 from other sources. It’s certainly a gamble that you could get 100% of funding from every single grant request that you submitted, but pretty unlikely, given the competitive nature of grantseeking. What’s more possible is that you have already accepted funding from one source that could conflict in some way with the grant notice you just received. (Or, if your program is actually fully funded for the fiscal year in question: Congratulations!! You have another set of (good) problems to discuss with your program, finance, and development teams.)

Another issue could be that a funder asks you to change the program or project from what you initially proposed. If what they’ve suggested actually leads you outside of your mission, you’re entering mission-drift territory. Time to stop the presses!

Make the decision as a team

Regardless of the reason you’re hesitating now, it’s good to bring your grant team together to discuss your options. Gather your program, finance, and development folks for an internal vetting process.

Lay out your options as though you’re first deciding whether to pursue the grant. If you have a decision matrix, whip it out (even better if you still have the one you completed when you first decided to apply for this opportunity). If you’re concerned about an element of the grant contract, bring a copy of it with you, and invite your legal or executive team to be part of the discussion. Maybe you just need a good old pros/cons list to get a sense of what it would mean for your nonprofit to move forward with the award.

Do your best to outline all of your assumptions and the reasons you’re considering declining the award. At this step, you might decide that your reservations can be overcome. You could ask the funder if there’s any flexibility on their monthly in-depth reporting schedule (seriously, are people nuts?!). Your legal team might sign off on that clause that’s giving you pause.

Regardless of your decision, timeliness is important. A funder who awards a grant and then gets crickets isn’t likely to continue the relationship in the future. Be sure you act as quickly internally as you can to come to a decision.

Craft a communications plan

Once you’ve come to a decision as a team, it’s time to communicate with the funder (and in a timely manner). How you proceed here will depend to some extent on your existing relationship, as well as the funder’s communication structure.

If you’ve worked with the program officer for several years and feel you have a nice rapport, a good first step might be to have an informal conversation by phone to test the waters. Express your team’s reservations about the award in as much detail as you feel comfortable, and ask the program officer for guidance on how to move forward. You can also schedule an in-person meeting, especially if high-priority decision-makers need to be present.

Perhaps the funder’s structure is much more formal. In this case, work with your grant team to craft a letter or email. Express appreciation for the award, and tell the funder how honored you are to have been considered. Acknowledge how you and the funder are aligned. Then, with as much transparency as you can without over-explaining, outline your reasons for declining the award. Use a warm, professional tone, and do your best to leave the door open for the future. Depending on the type of funder, you may also need to formally decline the award, but start with a personal communication first if you can. This gives the funder room to revise the award or their requirements.

Maintain your relationship

Ultimately, the most important part of grant funding is the relationships you build with your funders. Trust is built over time and through repeated interactions, not just by the check that arrives to your front door. Many private foundations, in particular, are built for longevity: they award small percentages of their assets each year so they can continue to make change in perpetuity. Think of your relationship with them in the same way. Grantmakers are long-term partners who want to see you succeed. Saying no shows you respect the funder’s time and resources, as well as your own. Turning down a grant can be an act of integrity.

If you truly do see a future with this funder, do your best to stay connected with them. Assuming their structure allows, invite them to events and send annual program reports. Let them see that you’re continuing the good work you originally proposed, and that you will be a good partner in the future.

Have you ever turned down a grant award? What went well or poorly about your experience?

Cover photo by Zackary Drucker and Alyza Enriquez on Vice’s Gender Spectrum Collection