Declining Applications and Inquiries: How Funders Can Do Better

Peter Marks, executive director of The L.B. Research and Education Foundation, received positive feedback from grant seekers who were not selected to move forward in the foundation’s application process. The feedback affirmed Peter’s own experience as a nonprofit grantseeker: funders often fail to provide helpful information in their declination letters. Here, Peter shares a template for other funders to employ.

Throughout my eight years as a nonprofit fundraiser, I sent many inquiries each year to family foundations and the majority earned no response at all. When I did receive responses, most were postal letters that followed a vapid, impersonal, and uninformative generations-old template. Family foundation fundraising felt like talking to so many cold brick walls.

When I transitioned to working as foundation staff, I hoped to avoid inflicting that feeling on anybody else. We decline the vast majority of inquiries, but can we turn away these inquiries with a little more humanity, clarity, and accountability? To that end, I hope that my simple email template for declining letters of inquiry (LOIs) may be helpful to some foundation staff.

Background on the Foundation and Our Application Process

The L.B. Research and Education Foundation is a family foundation with a board of eight composed of two family members and six non-family members. The foundation’s asset base is $35 million. I am the sole staff person, working half time since 2021. I was hired in part to support the board in defining grantmaking priorities and to initiate an open application process. Most grants to new applicants are provided in two areas: mental health, and educational programming for adolescents and adults. We are not place-based and we welcome nationwide inquiries.

The LOI process is to email a 500-word concept paper. We receive about 70* of these per quarter from first-time applicants, of which about 10% lead to requesting a full proposal. So, each year we have to tell about 240 organizations that the foundation isn’t interested in hearing more about their concept.

*Once we invite a full proposal, there’s more than a 50% chance it will be funded. Decline letters or calls in response to full proposals have more in-depth content than what will be described below.

Annotated Decline Letter

Here is the text of a standard letter we send to nonprofits who submit an LOI that we do not invite to submit a full proposal.  In order to facilitate annotation, each section of the email below is numbered within a table. It wasn’t presented this way originally, of course. This example is brief, yet several applicants called it out as exceptional, and they generously took time to send us positive input.

1. The Format: Email

Paper mail is an endangered species, yet the foundation decline letter is a holdout. In my years as a fundraiser, the majority of declines were sent in an office-printed envelope with a stamp via the postal service, often anonymous and unsigned. I think I know why: foundations don’t want applicants to contact us back after a decline, so we use the most impersonal and distant communication format available. We seem to operate in fear that the masses of declined applicants, if they understand too much about our decision criteria, will hound us with questions or demands. I believe that what applicants appreciate most about the L.B. Foundation decline letters is the implied open channel to respond directly and quickly, via email, to a person who has a name. So far, nobody has overburdened my time via this channel. Among hundreds of decline emails, a couple people have been a little challenging, which was easily resolved with a quick phone call.

2. The Opening

Although most decline letters use the passive voice: “ . . . your proposal was not selected for funding,” we prefer to use the active voice to say who is making the decision: the board, or program staff on behalf of the board. In this way, we establish a sense of humanity rather than a sense of decisions extruded from a cold machine.

3. The Field and Odds

Applicants like to know how big a field applies to your foundation and how many are invited to take the next step. For nonprofits that use probability-based budgeting, this helps them decide whether to apply again with a better inquiry. The problem with most decline letters is that we stop here. “We had 500 applicants of which 20 were funded” is not the reason why theirs was not one of the 20; it’s not a reason at all. When presented this way, the words ring hollow. There is always a reason. Applicants want to understand and improve.

4. Reasoning

There may be multiple reasons why an inquiry or proposal did not rise to the top. Share at least one reason in your letter. When there’s a basic mismatch between the organization’s mission or strategies versus our stated grantmaking priorities, I am clear about that. Sometimes the 500 words are not well-chosen. For example, the writer uses a lot of space to just restate the wording of our priorities, leaving little room to tell us what they do and why; if that’s the case, I say so.

If the issue is that the specific program design or approach isn’t appealing to our decision-makers, I’m clear about that even if it risks sounding arbitrary. Especially for smaller family foundations, decisions will always be influenced by the personal experiences and ideals of the board and founder. While we have clear guidelines and ways to mitigate individual bias, grantmaking choices are forged from the preferences of individuals. When this is the simple, driving logic behind a declined proposal, I acknowledge as much. This also conveys that our declination is in no way a negative judgment of the applicant’s mission or approach.

5. Positive Input and Closing

It’s nice to mention something that worked well in the inquiry or proposal, while clearly reiterating that it’s not a fit overall. The closing could also mention other helpful resources. At the L.B. Foundation we don’t yet have the depth of experience to offer, for example, connections to better-aligned funders. If you do, that can add even more positive value to your disappointing message.

The Response from Applicants

Below are excerpts from emails I’ve received from nonprofit staff in the past year. In each case, I had sent an email declining to move forward in response to a letter of inquiry.

“Thank you so much for this thoughtful decline email. I really appreciate you taking time to explain your foundation’s philanthropic goals. Most declines we receive are so generic that we aren’t sure if we should apply again in the future when more funds are available, or if we simply weren’t a good fit.”

“I think your decline email is one of the most thoughtful and respectful we have received in many years and I want you to know how much I appreciate it.”

“While we of course hoped to be funded, it is incredibly helpful to have feedback on your process and suggestions for future potential requests. I wish every funder was able to provide such helpful information.”

It’s lovely to get positive feedback on what can be an unpleasant task. Yet, as shown in the sample email above, I provide only a basic level of friendly engagement and constructive input. It’s clear that we, as family foundations, have set a low bar in this area.

Treating Nonprofits as Trusted Partners

The trend toward trust-based philanthropy is a good thing. While many foundations now enjoy and value building trust-based relationships with funded nonprofits, we act like we don’t trust declined applicants at all. I think we can do better. I’ve shared a few simple improvements that we achieve at the L.B. Foundation with one half-time staff person. These practices can surely be scaled up and improved further, while following the same basic principles:

• Humanity: communicate person to person while also sharing the broader foundation’s values, practices, and personnel;
• Clarity: avoid offering inauthentic reasons for decline such as “we received many great inquiries;” provide real reasons;
• Accountability: don’t try to cut off the possibility of a response or clarifying exchange; stay open to the idea that we can learn from declined applicants’ input. From what we learn, we can periodically refine our published priorities.

What Next?

Most family foundation declination letters lack transparency, avoid open disclosure, and seem rooted in fear: fear of further communication; fear of complaint; fear of liability; and fear that the declined applicant will want to pursue any relationship at all. This is one practice that is easy to improve and a small step toward being better partners with the communities we support. Surely, some of you have much greater capacity and are demonstrating best practices with declined applicants that go far beyond an extra sentence or two in the notification letter. I’m excited to learn more.

Peter Marks is the executive director of The L.B. Research and Education Foundation

The views and opinions expressed in individual blog posts are those of the author(s) and do not necessarily reflect the official policy or position of the National Center for Family Philanthropy.