Grants present a great opportunity for small business owners to fund a new venture or expand existing operations.
However, it is unlikely that you will win every single grant that you apply for -- that’s why the terrific saying is, “Fall down seven times. Stand up eight.”
While it can be easy to get discouraged, it’s important to learn how to respond when you don’t win the grant.
By responding appropriately, you can make a great impression on funders. This may open the door for future grant opportunities. In addition, they may provide insights into the grant process and help you to improve on your proposals.
Below, we’ll outline some of the most common reasons for grant proposal rejections. We’ll also discuss what to do when your grant proposal is rejected. With these things in mind, you can continue to push forward and pursue funding to grow your business.
Reasons Why Grant Proposals Are Rejected
There are many potential reasons why your grant proposal could be rejected. Generally speaking, rejections fall into one of four broad categories, which include the following:
There Were Too Many Applicants
National grant organizations and federal funding programs typically receive hundreds, if not thousands of applications. If you have applied for one of these types of grants, then there is a chance that there were simply too many proposals submitted. Your grant proposal may have gotten lost in the crowd, even if it was well composed.
While we don’t want to discourage you from applying for grants with large entities, keep in mind that it may take several attempts to get your proposal noticed.
One way to help your future proposals to stand out is to refine your cover letter. A great cover letter should grab the reader’s attention and quickly summarize why the funder should support your business.
The Application Included Errors
Every grant has unique application requirements that must be met. If your proposal contained errors or omitted requested information, then it cannot be considered for funding. Before submitting your application, carefully review it to ensure that it is error-free.
If necessary, hire a freelance editor who is experienced in reviewing grant proposals. Freelance editing services are extremely affordable and can help you avoid having your grant proposal rejected.
The Applicant Missed the Deadline
Grants often include strict application requirements, including clearly set deadlines. If you miss this deadline, even by a single day, then your proposal will be immediately rejected. The purpose of having a deadline is so that the funders have plenty of time to review each proposal.
There Was a Better Fit for Funding
Despite your best efforts, sometimes, another applicant is just a better fit for a particular grant. Another organization may be more aligned with the grantor’s values and mission. When this happens, it is a sign that you need to reevaluate the grants that you are applying for.
Instead of chasing a funding opportunity that does not match your organization, look for grantors that have a shared vision. You should never create a new program just to appease a potential grantor. This can cause you to lose focus on the original purpose of your organization.
What to Do If Your Grant Application is Rejected
Before you begin applying for business grants, it is important that you understand that rejection is a real possibility. While you might get lucky enough to have your first grant proposal approved, obtaining funds for your organization will usually take some time and the rejection process is your best teacher.
With this in mind, it is important that you know what to do if your grant application is rejected as the learning comes from what you do after receiving a rejection notice. We recommend that you:
Write a Grant Rejection Thank You Letter
After your grant is rejected, the last thing that you might want to do is to compose an authentic, heartfelt thank you letter. However, doing so is vital if you want to maintain positive relationships with various funding organizations.
As you’re crafting your letter, make it personal. Do not rely on a generic template. Make sure to mention the funding organization by name and thank them for the opportunity. This is especially important if you plan to reapply for a grant with that organization in the future.
Ask for Feedback
Many businesses do not ask for feedback when they receive a grant proposal rejection. This is a major missed opportunity. Even if your request for feedback goes unanswered, it never hurts to ask.
When you’re requesting feedback, ask the grantor what you could have done differently. Find out whether you are eligible to resubmit a proposal in the future. You should also request to see the reviewers’ notes if they are allowed to share them. This feedback can provide valuable insights into your grant proposals and help you to refine future applications.
Stay in Touch
Unless a grantor was just a poor fit for your organization, we recommend that you stay in touch. Simply sending out an occasional email goes a long way in building relationships. It can leave the door open for future funding opportunities.
If your next proposal is competitive, the fact that you stayed in contact with the grantor may sway decision-makers into choosing your organization for funding.
Most grants are offered on a recurring basis. Keep a list of grants that you did not receive but are still eligible for -- when the next application cycle begins, resubmit your funding proposal.
If you took the time to gather feedback from these grantors, make sure to apply what you learned. The grant reviewers will likely take notice, which means that they are more likely to award the requested funding.
While applying for grants is a time-consuming process, it is also a great opportunity to obtain funds for your business.
When you receive a grant proposal rejection, do not become discouraged. Instead, continue to improve your writing practices and seek out new funding opportunities. Apply for multiple grants so that you can increase your odds of receiving approval.
How to Avoid Grant Proposal Rejection
There are several proven methods that can help you to reduce the risk of receiving a proposal rejection. These best practices include:
Reviewing Your Application
Many grant proposals are rejected because the application was submitted late or lacked the required information. In order to avoid these common pitfalls, thoroughly review your application. Taking the extra time to proofread all documents can increase your chances of success and help you to avoid that dreaded rejection letter!
During the review process, see if you can improve upon your written content. Refining the story so that it better conveys your organization’s values can help you connect with the grant proposal reviewers.
Reflecting on Your Options
While you may be eager to start submitting proposals, it is important to reflect on your choice of grantors. Applying for multiple grants is a great idea, but you should not blindly submit proposals. You need to be selective about which grants you apply for, as some funders will not be the right partner for your business.
We recommend reaching out to organizations before you apply. Establishing a personal connection can increase your chances of receiving funding. It can also help you to decide whether they are a good fit for your business.
Hire a Grant Writer
Perhaps the best way to increase your odds of success is to hire a professional grant writer. These writers are responsible for handling the entire proposal process. They can conduct research, compose the cover letter, and craft original content that is meant to appeal to funding organizations.
However, not all grant writers are created equal. Before hiring a writer, you need to make sure that they will be the right match for your business.
A good grant writer will have relevant experience, be reasonably priced, have strong communication skills, and be proficient at research. By partnering with a professional grant writer, you can obtain funding sooner and reduce the risk of having your proposal rejected.
When You’re Seeking Grant Funding, Persistence is Key
Applying for grant funding can be an exciting undertaking. However, it is important to be prepared for the possibility of having your proposal rejected. When this happens, be persistent and seek out feedback. Reevaluate your approach and research additional grants that are the right match for your organization.
If you are ready to start finding grant opportunities for your business, check out FUNDID’s Grant Marketplace. We connect growing businesses with grantors that want to support them.
Fundid is on a mission to get women-owned businesses the capital they need to grow so that we can all close the business wealth gap. While 42% of businesses in the US are owned by women, they only account for 4% of revenue generated by private businesses. We spend our time at Fundid thinking about what the world would look like if women also generated 42% of revenue and how to get them the capital they need to make that happen. Fundid is creating new ways to get small businesses the capital they need to grow and is built from the feedback of women entrepreneurs.