Hi! I’m Bre Swims, a long-time Spark Pointer and first-time Spark Points blogger. Recently, I joined a room full of funders and nonprofits here in Southeast Tennessee to talk about funding gaps, best practices, AI, and more. With four representatives from local community and family foundations on the panel, I took plenty of notes!
If foundation funding is part of your strategy, here’s what I learned—and what it means for your organization.
The development staffing shortage shows up in grant applications.
Many nonprofits struggle for months to fill development positions or face frequent turnover, so executive directors and program staff end up writing grants on top of everything else. Funders notice the result: avoidable mistakes and weaker program proposals.
Nonprofits in the area also struggle to hire development talent because the local cost of living is so high. I was surprised that, even in the age of remote work, housing costs still keep organizations from hiring qualified fundraisers.
What you should do: Assess how your organization hires and supports development staff. Then reach out to your local fundraising association to learn how you can better support the profession.
Funders want details, honesty, and for their time to be respected.
Beyond a strong mission, funders look for clear alignment and data with context. They want concise applications with “less rhetoric and more meat.” Involve program staff in grant writing, build a relationship with the program officer, and follow the guidelines closely so every requested detail and timeline are included. To keep funders engaged over time, show the impact of their support.
One funder acknowledged that plans don’t always unfold as expected. If you use funding for a different purpose than originally intended, invite your supporter for a site visit and explain what changed and why.
Funders are especially frustrated when organizations approach them at the last minute. The panelists advised nonprofits to begin relationship-building and funding conversations six to nine months before the money is needed.
What you should do: Even with limited bandwidth, you must prioritize stewarding your funders and getting time on their calendars well in advance of your need.
AI is welcome, with one notable exception.
AI came up only briefly. One funder said they have no restrictions on using it for grant applications because they want the process to be as accessible as possible.
The funders see AI as a valuable resource, but applicants still need to check their work. One funder may add a question about how applicants use AI in their organizations; otherwise, the panelists expressed few concerns.
The only hard line was in the arts: some arts funders won’t fund any art initiatives that use AI.
What you should do: Use AI as a helpful tool, but always review your work before submitting to ensure your mission, voice, and programs are clearly communicated and aligned. Our AI Grant Writing Checklist can help guide that final review and make sure you’ve covered the key elements before submitting.
Build trust—and your asks—slowly over time.
Many nonprofits hope for large, multi-year, unrestricted gifts, but first-time grantees should take note that funders are unlikely to give unrestricted, general support for the first grant.
Stewardship is the path to general operating funding and multi-year support. Keep funders informed about organizational changes, engage them in your mission, and provide clear financial reporting. Multi-year, unrestricted funding becomes possible only after strong alignment and trust are established—usually through several single-year grants. Even then, this type of funding tends to support long-established organizations or critical services that no one else provides in the area.
Here are some tips for foundation funder stewardship:
- For young or small organizations, start with a small, specific ask and show that you can collaborate and follow through.
- If your grant request is declined or you receive less than you asked for, call or email for feedback. But remember, sometimes the money just isn’t there.
- If you are trying to re-engage a lapsed funder, start by thanking them for their past support. Then, share an update without asking for anything.
- Continuously engage funders by sending them mission-aligned updates, inviting them to relevant events like funder briefings and community gatherings, and thanking them regularly for their support.
One panelist had more than $100,000 in requests to consider, but only about $30,000 to distribute. “It’s never personal,” they said. Then, when an audience member asked about being a newer nonprofit, a funder invited them to visit the foundation and share more about their work. The moment underscored the value of starting a relationship—even when funding is limited.
What you should do: Long-term funding grows from trust and consistent stewardship. Build relationships around your shared vision, not just your next ask—or you may remain stuck in a cycle of one-time gifts.
When money changes hands, so do priorities.
Donor-advised fund (DAF) holders are making larger gifts as demand for funding rises. Foundations are encouraging more distributions, but communities still lack enough revenue to meet their needs. A second challenge emerges when a DAF passes to the next generation: giving priorities often change, reducing support for organizations that may have received consistent funding for decades.
While younger donors tend to give less due to rising housing and childcare costs, the outlook is not entirely bleak. Younger donors often have an entrepreneurial, startup mindset and may be more willing to back a newer or smaller nonprofit whose mission they believe in, thus opening up opportunities for nonprofits having a hard time entering established funding streams.
What you should do: Establish and maintain a relationship with your local community foundation, where DAFs often sit. It’s the best way to stay apprised of funding shifts that will affect your organization. In addition, community foundations want to know about the needs of the nonprofit sector in their community. They are here to help. Spend time educating your community foundation contacts about your work, as they are in a position to advise DAF holders on where to give.
Let’s build your fundraising strategy together.
The message was clear: funding is tight, staff capacity is low, and relationships really matter.
If your team is stretched thin or you aren’t sure how to begin building foundation relationships, Spark Point Fundraising can help. We’ll help you strengthen funder relationships, improve your grant writing, and build a more sustainable funding strategy so you can stay focused on your mission.
Book a consultation today, and let’s talk about what’s next for your organization.