You have applied for a grant, and you get a reply from the funder. It says, "Congratulations, you have been accepted for an award; please sign the attached grant agreement!" You are jumping for joy.
After the initial joy sets in, you realize you have a dilemma. The grant amount is much lower than you requested. You feel a sinking feeling in your stomach. You are grateful for the money and the impact the money will make, but a few thoughts might be going through your mind.
You may be thinking:
- Can we conduct the program with the amount of the funds given?
- Will we have to remove parts of the program to meet this budget?
- Where will the rest of the money we need come from?
- We have no other money lined up, and it may take months for us to deliver the program we promised them.
- Why would a Grantmaker give a lower amount than we requested?
It is not uncommon for a Grantmaker to fund a fraction of your request. The reasons may be that they received a lot of significant proposals and want to invest in more organizations. Your initial request does not align with the funder's giving history. Maybe they like some parts of your program but not everything you proposed. They may want to test the relationship first and give lower amounts to first-time grant awardees.
Whatever the funder's justification for giving you less money than you asked for, when faced with this scenario, what you do next is consequential.
Should you accept a lower grant amount?
It is a widespread practice for foundations, corporations, and state and local governments to provide less funding than was requested. This often happens when there are no minimum or maximum amounts that can be requested or for "need-based" funding requests. It is less common for the federal government to provide less funding than was requested. This does happen, however, if there are reductions to program funding or if your budget includes ineligible costs.
Since there is a good chance that a grant-seeking organization will experience getting less funding at least once, please know you are not alone. There are many reasons why you will want to accept a grant award that is lower than the amount you requested.
We recommend accepting a lower grant amount when:
You have other sources of funding for the program
You can still conduct the program with amendments (more on that below)
You are receiving funding from a Grantmaker that likes to build relationships
Working with the funder is strategic and can elevate your organization
The funding will attract other funders
If you decide to accept, proactively request to amend your budget, goals, and objectives to align with the revised funding amount.
Here is how you may go about it:
"Hi ABC Funder,
We are very excited to hear you have selected our organization for funding, and we look forward to our partnership. We appreciate the $25,000 grant award.
Since our submitted budget was $100,000, we would like to amend our budget and goals and objectives to reflect the funding amount.
May we schedule a call with you to discuss this more?"
If the funder declines your request to amend the budget, it's crucial to seek clarification on the reasons for the decision before signing any agreements. Understanding the rationale behind the funder's decision can help you make informed decisions about next steps and potential adjustments to your project plan.”
Here are a few AI generated examples using the text above. Prompts created by Grammarly: "Make it persuasive", "Make it more descriptive", "Make it empathetic"
Example 1
Example 2
Example 3
Should you decline a lower grant award amount?
Declining a grant is a big decision. If in doubt, please consult with your project team, executive leadership, or Board of Directors.
Please read our article “How to politely decline a grant award” for email examples.
Should we decline or accept a lower grant award?
As you can see, there are many things to consider when presented with this problem. On the one hand, if the grant award is too low for you to conduct any part of your program, you may need to decline. On the other hand, a lower grant amount may still be impactful to the people that you serve.
Whatever you decide, celebrate! Your program is exciting to funders, and you put together a compelling and persuasive case for funding.
If this funding isn’t right, know there will be other opportunities in the future.
At SGR, we are experienced in helping our health center partners win grant awards and renegotiate their work plan if they receive a lower amount. If you are interested in partnering with us for your pre-award grant writing needs, please take our brief survey.
We are here to support you and ensure that you can make the most of every funding opportunity.
