Why 97% of Small Nonprofits Never Get Federal Money—And How to Be the 3%
I’m rooting for you—see you in the 3%.
Today, I want to start with a bold truth bomb: Most small nonprofits will never see a dime of federal funding.
Painful?
Yes.
Hopeless?
Not at all—if you understand why and decide to be different.
I’ve seen this up close for over 10 years, coaching nonprofits from living off bake sales and tiny donations to landing six- and seven-figure federal awards.
And every time I see the same pattern: the same reasons most small nonprofits get shut out, and the same mindset shifts that help the brave 3% break through.
So today, let’s peel back the curtain.
If you’re serious about tapping into federal dollars—money that can transform your mission, your programs, and your community—this is your roadmap.
Ready?
Grab your coffee.
This might sting, but it will set you free.
The Brutal Truth: Why Small Nonprofits Get Shut Out
Let’s break down the biggest culprits.
1. They Don’t Believe They’re Big Enough
Many small nonprofits rule themselves out before they ever open a Notice of Funding Opportunity (NOFO).
I can’t count how many times I’ve heard,
“Federal grants are for the big dogs. We’re just too small.”
Here’s the irony: federal agencies want local, grassroots, community-based organizations in the mix.
They know the big national players can’t reach every neighborhood, every special population, every unique community.
But if you don’t even show up to the table, the funds just keep going to the same old organizations.
2. They Don’t Have Their House in Order
This one stings. Many small nonprofits think a great idea should be enough.
But federal funders want to see:
A real strategic plan
Evidence-based programming
Clear governance and financial policies
Clean books
A board that does more than just nod and vote
If you’re operating out of a shoe box and sticky notes, it’s going to be a hard sell.
The good news?
None of this is impossible to fix. I’ve seen a two-person nonprofit get compliant and competitive in under 12 months.
3. They Don’t Read (or Understand) the NOFO
This is where even seasoned grant seekers mess up.
Federal NOFOs (Notices of Funding Opportunity) are beasts. 50, 60, 100 pages long. Legalese, budget forms, logic models, attachments, registrations... it’s a lot.
Many small nonprofits skip sections or don’t follow instructions line by line. A single missed page can kill your application.
The reviewers won’t call you.
They won’t fix it for you.
They’ll just score you lower and fund someone else. Period.
4. They Don’t Have a Grant Calendar
Small nonprofits usually operate in “panic mode.”
A big NOFO drops.
Someone forwards it to the director. The board scrambles. Maybe they call a local grant writer two weeks before it’s due.
By then, it’s too late.
Federal grant writing is not like writing a quick foundation request.
You need:
Weeks to gather data
Time to get letters of support
Time to build partnerships
Time to align your budget with your narrative
If you don’t have a calendar tracking deadlines 6–12 months out, you’re always too late to play.
5. They Don’t Have the Right Help
Here’s a fact: most small nonprofits don’t have an in-house federal grant expert.
That’s okay—if you get help.
Some try to cheap out and hire the cheapest writer on Fiverr or drag-and-drop AI content without strategy. Or they ask a well-meaning volunteer with no federal experience to piece it together.
It backfires every time.
Federal grant writing is technical, high-stakes, and unforgiving.
If you don’t invest in the right expertise—training your team or bringing in seasoned support—you’ll just waste time and money.