What Funders Aren't Saying Out Loud This Year (and What You Can Do About It)
By now, most nonprofit leaders have felt it. Renewals take longer. A program officer who used to answer within a day now takes a week. A funder you counted on announces it is "pausing new applications to focus on current partners." And the proposals you send out, even the strong ones, seem to come back with fewer yeses.
You're not imagining it. Americans gave a record $617 billion to charity in 2025, yet 69% of nonprofits lost funding from at least one source that year, while 65% saw demand for their services grow. The money is there. It is just moving more carefully, and toward fewer places.
We spend our days inside proposals, funder conversations and renewal cycles with the organizations we support. Here is what we are seeing from that seat, and what you can do about it, starting this quarter.
1. Funders Are Playing It Safe, So Give Them Fewer Reasons to Worry
Most foundations have not stepped up the way they did during the pandemic. In a September 2026 survey by the Center for Effective Philanthropy, only a third of large foundations reported paying out more than usual. More than half of the leaders who felt their response fell short said risk aversion was holding them back.
In practice, risk aversion looks like renewing existing grantees, narrowing priorities and saying no to anything that feels uncertain. You can't change a funder's board. You can reduce the uncertainty they see in you.
That means a budget that adds up, a realistic timeline, clear roles, and a plain answer to the question every reviewer asks silently: what happens if this doesn't go to plan? Name the risk before they do, and say what you'll do about it. A proposal that acknowledges a challenge usually reads as more trustworthy than one that pretends there isn't any.
2. Follow the Money Into Pooled Funds and Collaboratives
Funders who feel uncertain tend to move together. In the same CEP survey, 53% of foundations said they were collaborating more with other funders, and 62% were concentrating their money in the areas they see as most urgent.
For a small organization, that shift matters. More dollars now flow through pooled funds, giving circles, community foundation initiatives and rapid-response funds, where several funders decide together. These vehicles often have simpler applications, and many were set up specifically to reach organizations that large foundations miss.
Find out which collaboratives are active on your issue and in your region. Ask your current program officers which pooled funds they contribute to, since they often know about a new round before it is public. Then join those funds' mailing lists, attend their information sessions, and introduce yourself before the next round opens.
If you want a refresher on qualifying individual funders, our earlier post, How Small Nonprofits Can Find the Right Funders, walks through it step by step.
3. Ask for General Operating Support, and Show What It Pays For
There is good news here. Funders are giving more flexible money than they did a few years ago. General operating support made up about 40% of foundation grants in 2024, up from 37% the year before.
But funders still need a reason to trust that flexible money will be used well. That's where many proposals fall short. They describe programs in detail and treat everything else as "overhead."
Show what your work actually costs. What does it take to serve one family, one student or one neighborhood for a full year, including staff time, rent, technology and the systems that keep you running? A sentence like "$1,200 covers one family for a full program year, all costs included" does more than a paragraph defending your indirect cost rate.
4. When Funders Ask About Sustainability, They're Asking About Money
This question comes up in almost every application, and it is one of the most misunderstood.
When a funder asks how your work will be sustained, they rarely want your vision or your values. They want to know how the work is paid for today and how it will continue after their grant ends.
Answer it like a budget question. What is your current revenue mix? Which other funders or revenue sources are you pursuing next? What would you scale back if one of them fell through? A funder who sees a realistic plan B is far more comfortable becoming plan A.
5. Translate Your Work Without Erasing It
Some organizations, particularly Black-led ones, have been asked by funders to soften or remove race-explicit language. A recent report by ABFE and Candid found that many are holding the line.
"Funder-friendly" language should mean clear and concrete, not stripped of who you serve or why your work exists. Replace jargon and deficit labels like "at-risk" with specific descriptions of people and conditions. If your work exists because of racial disparities, describe them with data from your own community. Specific is harder to argue with than abstract.
And if a funder asks you to remove the reason your work exists, that is a values conversation worth having before you accept the money.
6. Write for a Tired Reviewer
Program officers often read dozens of proposals in a row. Help them.
Put your ask, the people you serve and your strongest result in the first paragraph. Use headings that match the funder's questions. Keep sentences short. Swap adjectives for numbers. If a reviewer could summarize your proposal in two sentences after reading only the first page, you're in good shape.
There's another reason to write this way. Very few foundations use AI to screen applications today, but about a third haven't ruled it out. Clear, specific facts near the top serve a human reviewer and a machine summary equally well.
7. Close the Candor Gap Before Renewal Season
Here is one of the most striking findings from this year's research: 93% of foundation leaders believe they understand their grantees' challenges. Only 54% of nonprofit leaders agree.
That gap is an opening. Two or three months before a renewal, schedule a short check-in with your program officer. Ask what has changed in their priorities. Tell them what has changed for you, including the hard parts. And if a proposal was declined, ask for feedback. Leaders of small Black-led nonprofits rarely receive feedback unless they ask, so ask.
Funding decisions are made by people, and people fund organizations they know.
Where to Start
You can't control how cautious funders are this year. You can control how prepared, specific and visible your organization is when they decide where their money goes.
Start with a few practical steps:
Identify two pooled funds or funder collaboratives working on your issue in your region.
Calculate the full cost of your work per person or household served.
Rewrite your sustainability answer as a funding plan, with a plan B.
Review your language with staff and community members, and replace vague or deficit-based terms with specific ones.
Schedule check-in calls with your current funders before renewal season.
These steps won't fix the funding landscape, but they can help you hold your ground in it and be ready when the next opportunity opens.
If your organization needs support with grant strategy, funder research or proposal writing, those are areas worth addressing as you plan for 2027, and we can help.
Funders are being careful this year. The best response is to be clear.
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