The 3 Grant Mistakes Costing Nonprofits Millions

In 2025, our team partnered with grantmaking institutions across the country to review and make strategic funding decisions on hundreds of grant applications. Federal cuts, shrinking public dollars, and growing need pushed nonprofits into a high-stakes scramble for funding — and that pressure showed. From one application to the next, patterns of survival appeared on the page, reflecting broader pressures across the nonprofit sector. This was especially true for Black-led organizations operating under chronic underfunding and overwork.

Grant applications don’t just tell funders what organizations do. They reveal what pressure looks like in real time: how scarcity, urgency, and competition shape the way stories get told. As we moved through hundreds of applications, certain choices showed up again and again.

Those repeated choices weren’t random. They pointed to three clear patterns in how organizations are trying to survive this funding moment and how, in the process, many are unintentionally weakening their own case for support.

1. The rise of AI-generated responses

When applications sound the same, funders stop listening.

One of the most striking trends was the unmistakable use of generative AI. I’m not talking about organizations using AI to organize data or edit drafts. I’m talking about identical, copy-and-paste paragraphs appearing across multiple applications, oftentimes word for word.

This is both understandable and costly. When you’re under-resourced, time-poor, and juggling twenty priorities, AI can feel like an equalizer. But when it becomes a crutch instead of a tool, it flattens voice, vision, and nuance. It erases the specificity funders are actively looking for. And it weakens the story of impact these organizations actually have.

The irony is that many of these organizations are doing powerful, community-rooted work. But their applications read as if they were generated in the same room, by the same hand, with the same narrative.

Do this instead: Use AI to support your process, not replace your voice. Let it organize, outline, or edit... but let your lived work speak.

2. Trying to be “everything” instead of leading with core expertise

Breadth doesn’t win grants. Clarity does.

Another recurring pattern: organizations contorting their missions to match every stated priority. The thinking is understandable: funders hold the purse strings, and historically, nonprofits have had to shape-shift to survive.

But as the saying goes: If you do everything, you do nothing.

When an organization claims expertise in ten unrelated impact areas, it comes across as unfocused — and funders notice. What stands out is not how many boxes you can check, but how deeply you understand the work you do best.

If we receive 100 applications all saying they are addressing “cuts to DEI funding,” the issue becomes noise. But when an applicant names the specific harm — like the closure of the only culturally responsive mental health program in a rural county, or the elimination of school-based interventions that directly impact Black girls — the story sharpens. The intentions are clearer. The work becomes real.

Specificity is not only a storytelling strategy; it is an act of leadership. It communicates that an organization is rooted in what it does best.

Do this instead: Name the one thing you do better than most. Build your application around that.

3. Performing relevance

Chasing trends weakens truth.

This trend isn’t surprising. Black-led nonprofits have spent decades navigating philanthropic trends they didn’t create. When a funder identifies its priorities, many organizations instinctively perform relevance rather than articulate their own.

But this isn’t limited to one funder or one region. Across the sector, many application processes inadvertently reward “trend fluency” over truth. The result is a familiar pattern: organizations write what they think will be funded, not what they most need to say.

What we saw in the applications is not a failure of organizations, but a reflection of the pressures the sector places on them.

Do this instead: Write from your work, not from the trend. Lead with what is real, not what feels fashionable.

What this moment calls for

The 2025 grant review processes made one thing clear: clarity is a currency. The organizations that rose to the top named their mission with precision, lifted up what made their work distinct, and rooted their stories in lived experience. They didn’t win because their work mattered more. They won because their applications showed focus, intention, and cultural truth.

As philanthropy continues to shift, the strongest models are the ones that invest with intention and community accountability: models that create room for organizations to lead from their strengths rather than their survival instincts.

If there’s one takeaway from the pile of applications, it’s this:

Our communities don’t need organizations that can do everything. We need organizations that can do their thing exceptionally well — and funders who honor that expertise.