When Is a Grant Too Competitive?

A Reality Check for Small & Medium-Sized Nonprofits

If you run or support a small or medium-sized nonprofit, you already know this truth: every grant is not your grant, and that’s not a failure; it’s a strategy.

One of the most overlooked skills in nonprofit leadership isn’t writing grants. It’s deciding which ones not to pursue.

At V.O.I.C.E., we see organizations burn time, morale, and capacity chasing funding that was never realistically within reach. Let’s talk about how to spot a grant that’s too competitive, before you invest weeks of unpaid labor.

1. Start With the Numbers (They Don’t Lie)

Some funders quietly tell you everything you need to know, if you look closely.

Ask:

• How many awards are made each cycle?

• What’s the average award size?

• How many applications do they receive?

  
  

🚩 Red flag

If a funder awards 10 grants nationwide but receives 1,000+ applications, that’s a 1% success rate, before considering insider advantages.

Highly competitive grants often favor:

• Large institutions

• Universities or hospital systems

• Organizations with full-time development staff

• Groups with a prior funding history from the same funder

  
  

If your organization doesn’t fit that profile, this may be a “nice idea” grant rather than a strategic one.

2. Read the Eligibility, Then Read Between the Lines

Many RFPs technically allow small nonprofits, but are designed for larger players.

Watch for language like:

• “Demonstrated national impact”

• “Multi-site implementation”

• “Prior funding preferred”

• “Five years of audited financials”

• “Capacity to scale rapidly”

  
  

🚩 Red flag:

If you spend more time explaining why you qualify than what you will do, the grant may not be aligned.

3. Match Your Capacity, Not Just Your Mission

Mission alignment gets you interested. Capacity alignment gets you funded.

Be honest:

• Do you have staff time to manage reporting, data collection, and compliance?

• Do you already track the outcomes they require?

• Can you front costs if reimbursement-based?

🚩 Red flag:

If winning the grant would stress your organization more than help it, it’s not the right opportunity, no matter the dollar amount.

4. Look at Who They’ve Funded Before

Past awards are one of the strongest predictors of future funding.

Check:

• Are awardees similar to your organization in size and budget?

• Do they serve similar communities?

• Are they mostly well-known names?

  
  

🚩 Red flag:

If all prior grantees are institutions with multi-million-dollar budgets, the funder may say they support grassroots work, but not fund it consistently.

5. Consider the Relationship Factor

Some grants are truly open. Others are not, exactly.

Signs a grant may be relationship-driven:

• Short application windows

• Minimal technical assistance

• Vague scoring criteria

• Repeat awardees year after year

  
  

This doesn’t mean you should never apply, but it does mean you should weigh the return on effort.

6. Ask the Most Important Question: What Else Could We Do With This Time?

Every grant application costs:

• Staff or volunteer labor

• Opportunity cost

• Emotional energy

  
  

Before pursuing a highly competitive grant, ask:

1. Could this time be better spent on: A more winnable local grant?

2. Individual donors?

3. Corporate sponsorships?

4. Fee-for-service or earned revenue?

5. Strengthening data systems for future funding?

   
   

Strategy is about sequencing, not just ambition.

A Smarter Rule of Thumb

For small and medium-sized nonprofits, prioritize grants where:

• You clearly meet and exceed eligibility

• You resemble past awardees

• The funder supports your geographic area or population

• The reporting burden matches your infrastructure

• The odds feel challenging, but not astronomical

  
  

Avoid grants that rely on:

• Prestige over impact

• Scale you don’t yet have

• Capacity, you’re still building

Final Thought: Not Every “No” Is a Loss

Sometimes the smartest funding decision is saying:

“Not now. Not this one.”

That’s not playing small, that’s playing long.

At V.O.I.C.E., we help nonprofits move from reactive grant chasing to an intentional funding strategy, so effort aligns with outcomes, not exhaustion.

If you want help assessing your grant pipeline, building a decision matrix, or identifying right-fit funding opportunities, that’s exactly the work we love to do.

✨ Strategy first. Sustainability always.