By Kelly Douglas, VP of Client Services, Grants
Lack of time and staff has been the number one grantseeking challenge every single year since 2012. Let that sink in.
The 2026 State of Grantseeking Report, published by GrantStation and based on responses from 1,354 organizations, confirms what nonprofit professionals have known for years: grantseeking is hard, the barriers are persistent, and most organizations are navigating them with fewer resources than the work actually requires.
At Alloy, we read this report every year because it reflects what we hear from clients every day. But this year, the findings hit a little differently. The funding environment has shifted in ways that are putting real pressure on real organizations, and the challenges in this report are not abstract. We are watching them play out with clients across the country right now.
Here are the top five grantseeking challenges the report identified, what we are seeing on the ground, and what we recommend doing about each one.
Problem 1: Not Enough Time, Not Enough Staff
Grant writing is not a task you squeeze in between meetings. It is time-intensive, detail-oriented work that demands research, strategic thinking, careful writing, compliance tracking, and ongoing funder communication. When it gets treated as an add-on to an already full job description, something always gives. It has been the sector's number one grantseeking challenge every year since 2012, and 17% of this year's respondents named it their greatest barrier.
What makes this year's findings particularly sobering is that Federal funding cuts and broader financial pressures have led some organizations to reduce or restructure their development departments entirely, even as their need for funding has grown. It is one of the more painful ironies we are seeing with clients right now. The organizations that most need to be pursuing grants aggressively are the ones with the least capacity to do it.
What to Do About It
Start by auditing how your organization currently allocates grantseeking time. Map out every task in your grants process and assign a realistic time estimate to each one. Most organizations are surprised by how many hours the full cycle actually requires. Once you have that picture, you can make a more informed decision about where to invest: a dedicated staff hire, a part-time contractor, or a consulting partner who can absorb the work that is falling through the cracks.
At Alloy, we become an extension of your team, managing the research, writing, and submission process so your staff can focus on the work only they can do. For organizations navigating a leaner development team, that kind of flexible, experienced support can be the difference between staying competitive and falling behind.
Problem 2: A Crowded, Competitive Funding Landscape
Nearly 15% of survey respondents named competition for finite awards as their greatest challenge, and the pressure has intensified this year in ways the data alone does not fully capture. As Federal funding has contracted, many organizations have pivoted toward foundation and corporate grants to fill the gap. It makes strategic sense, but it also means more organizations are competing for the same pool of private philanthropic dollars. We are seeing this directly with clients. The foundation and corporate landscape was already competitive. It is more crowded now, and standing out without an existing relationship or personal connection is genuinely difficult.
In this environment, showing up with a well-written proposal is no longer enough. Funders are making strategic investments and they are looking for organizations that demonstrate alignment, credibility, and a clear track record.
What to Do About It
Resist the urge to cast a wide net. Before submitting any application, ask whether your organization genuinely fits this funder's stated priorities, whether you can point to outcomes that speak their language, and whether you have any existing relationship or connection that strengthens your case. A warm introduction from a board member or a peer organization can be the deciding factor in a competitive field. A focused portfolio of well-researched, strategically aligned applications will always outperform a scattered one.
At Alloy, we help clients compete smarter, not just harder. We work with organizations to identify funders whose priorities genuinely align with their mission, build a compelling and differentiated case for support, and pursue opportunities where the fit is strong enough to be worth the investment.
Problem 3: Finding the Right Opportunities in the First Place
Nearly 12% of respondents said difficulty researching and finding grants was their greatest obstacle, and many more are likely feeling it without naming it directly. Grant research sounds straightforward until you are actually doing it. Identifying funders whose priorities match your mission, confirming eligibility, understanding submission requirements, and tracking open cycles is technical work that requires both the right tools and real expertise.
The challenge is compounded by the fact that the best prospecting tools cost money. Comprehensive grant databases with robust search, filtering, and funder intelligence capabilities are not free, and many smaller nonprofits either cannot afford them or do not know they exist. The result is research that relies on incomplete information, which leads to misaligned applications and wasted effort.
What to Do About It
Build a research practice that goes beyond a single free database. Start with tools like Candid to identify potential funders, then go deeper by reviewing 990s to understand actual giving history, average grant sizes, and geographic or mission focus. A funder's stated priorities and their actual giving patterns do not always match, and the 990 tells the truer story. Set aside dedicated research time each month rather than scrambling before a deadline, and maintain a living prospect list that your team updates regularly.
If your budget allows, investing in a dedicated prospecting tool is worth it. At Alloy, we use Instrumentl to conduct prospect research on behalf of our clients, giving them access to a level of funder intelligence that would otherwise require a significant time and financial investment on their part. It is one of the more tangible ways we add value beyond the writing itself.
Problem 4: Building Real Relationships with Funders
More than 10% of survey respondents identified funder relationship building as their top challenge, and it is easy to understand why. Stewardship reports, cultivation conversations, site visit preparation, and ongoing funder communication all require bandwidth that lean teams simply do not have.
The organizations that consistently win grants are rarely the ones with the most polished proposals. They are the ones whose program officers know their names, understand their work, and trust their leadership. In a more competitive landscape, that personal connection matters more than ever. A warm relationship does not guarantee a grant, but a cold application in a crowded pool is working at a significant disadvantage.
What to Do About It
Create a simple funder communication calendar and commit to it. For every active or prospective funder, identify at least two to three touchpoints per year that are not asks: a program update, an invitation to a site visit, or a brief impact report that was not required but was sent anyway. These small, consistent gestures are what transform a transactional funding relationship into a genuine partnership.
Start with your board. Board members are often an underutilized asset in funder cultivation, and a personal introduction from a trusted community leader carries real weight. At Alloy, we support this work by providing clients with detailed funder briefs and LinkedIn profiles of foundation trustees and staff so they can identify whether they or a board member already has a viable connection. We cannot build those relationships for you, but we can give you the tools and intelligence to build them yourself.
Problem 5: Navigating a Shifting and Uncertain Funding Environment
Nearly half of respondents had their previously awarded Federal funding reduced or cancelled in 2025, and 44.6% reported that those cuts directly impacted their programs and services. More than 8% of respondents named reduced funding as their greatest challenge, and nearly 7% pointed specifically to Federal funding changes.
For organizations that have built their budgets around Federal dollars, the disruption has been serious. But the broader lesson extends beyond Federal funding. Any organization that is overly dependent on a single funder, a single funding type, or a single revenue stream is carrying risk that a more intentional strategy could reduce.
What to Do About It
Start by mapping your current funding mix honestly. What percentage of your budget comes from Federal sources? From a single foundation? From grants overall? If any single source represents more than 30 to 40% of your budget, that is a vulnerability worth addressing proactively. Individual giving, events, earned revenue, and corporate partnerships each have a role to play in a healthy funding portfolio, and the organizations that weather disruption are the ones that built that diversification before they needed it.
At Alloy, we work with clients navigating exactly this challenge right now. For some, that means building a stronger foundation and corporate grants strategy to offset Federal losses. For others, it means stepping back to look at the full funding picture and identifying where individual giving or events could play a larger role. Grants are important, but a sustainable nonprofit runs on a healthy mix of income sources, and we help clients build toward that.
Alloy's Takeaway
What these five challenges share is that they are all, at their core, capacity and strategy problems. Nonprofits know what good grantseeking looks like. What they often lack is the time, expertise, and bandwidth to execute on what they already know.
If you recognize your organization in any of these challenges, you are in good company. And you do not have to navigate them alone. We started Alloy because we believe nonprofits doing important work deserve a fundraising partner who is just as invested in their mission as they are. That means showing up with more than proposals. It means bringing strategy, intelligence, and honest counsel to every client we work with.
Whether you are managing a leaner development team than you had a year ago, trying to stand out in a more competitive grants landscape, or wondering whether your funding mix is resilient enough for what comes next, we would love to have that conversation.
Reach out to Alloy to learn how we can help your organization build a stronger, more sustainable grantseeking strategy.
Source: GrantStation, 2026 State of Grantseeking Report
