How to Respond When a Funder Says No

It might feel like “no” is showing up more often than usual.

No to your proposal.

No to your renewal.

No to a partnership you thought was a sure thing.

We’re hearing it too, and you’re not alone.

The truth is that nonprofits are navigating real market turbulence, similar to what your for-profit counterparts are facing. Between shifts in federal funding, economic slowdowns, and funder strategy realignments, there has been a noticeable slowdown in the nonprofit funding space. Even long-standing relationships can be affected. The real question isn't whether rejection will happen, but how you respond when it does.

Here’s what you need to know.

Why Do Funders Say No?

There are more reasons than you might think, and most of them have little to do with the value of your work.

• They have limited funds. Funders are working within budget constraints just like the rest of us. Even major institutions have to make difficult choices about which proposals they can fund.

• They have specific impact goals. Your work may be powerful and necessary, but it might not align with what they are currently measuring, prioritizing, or accountable for in this cycle.

• They’re overwhelmed with requests. Some program officers are managing hundreds of inquiries, meetings, and proposals. Decision fatigue can play a real role in what gets funded.

• They’re confused by your proposal. If your application isn’t clear, focused, and grounded in a compelling case, it creates friction. Confusion can be a reason for rejection, even when the work itself is strong.

• They already know someone doing similar work. Sometimes a trusted relationship or internal recommendation carries weight. It may not be about capability; it may be about familiarity.

• They haven’t built a relationship with you yet. Cold proposals are always more difficult to land. Without a relationship or previous connection, your request may not stand out the way you hoped.

• It feels like too much risk. Funders are evaluating your ability to manage capital, execute programs, and deliver outcomes. If they perceive instability, lack of infrastructure, or unclear leadership, they may opt to wait.

What to Do With a “No”

Rejection can sting, especially when you’ve poured time, energy, and belief into your proposal. But it can also be a catalyst for reflection and growth. Here’s how to move forward with purpose:

1. Don’t Take It Personally

   This is easier said than done, but essential. Most funding decisions are influenced by internal factors unrelated to your leadership or value. Try to see a "no" as information, not a judgment.

   
   

2. Talk It Out

   Processing a rejection is often easier when shared. Reach out to a mentor, colleague, or advisor who can help you make sense of the outcome and remind you of the bigger picture.

   
   

3. Ask for Feedback

   If the relationship allows, send a respectful follow-up email asking if they’re willing to share insights. Be specific with your questions so they’re easier to answer. Even brief feedback can be deeply helpful when revising your next proposal.

   
   

4. Review Your Fundability

   A rejection might be a sign that something in your structure or presentation needs to be strengthened. Ask yourself:

   • Does our Theory of Change clearly communicate our strategy?

   • Do our financials reflect sustainability and intention?

   • Are we communicating a clear leadership structure and value proposition?

   Strengthening these areas increases confidence in your organization’s ability to manage funding responsibly.

   
   

5. Learn From Peers

   Reach out to colleagues who have received funding from the same institution. Ask them what helped make their proposal successful, how they approached the narrative, or what they learned from working with that funder.

   
   

6. Refine Your Messaging

   Go back to your proposal with a fresh lens. Is your story compelling? Is your mission tightly aligned with your ask? Is your budget clear and purposeful? Often, tightening your narrative and visuals can make a major difference in how your request is received.

Ready to Take the Next Step?

At Working Within, we work alongside nonprofit leaders to navigate the ups and downs of fundraising with clarity and strategy.

Our Fundraising Power Hour offers guided insight into your current approach, with practical advice you can implement right away.

You can also access our Fundability Checklist to identify what’s helping and what might be holding your organization back from funding success.

Our Fundraising Coaching packages are designed to deliver maximum value at minimal cost—perfect for organizations that are ready to grow with purpose and confidence.

Access the tools you need to turn rejection into momentum:

→ Schedule a conversation with our team

Don't let a no be the reason you stop trying!