Building Funder Relationships & Navigating Funder Rejections [Recording & Guide]
Every nonprofit leader knows the thrill of submitting a compelling grant proposal—and the sting of receiving a “no.” But what if rejection could be a catalyst for deeper alignment, stronger relationships, and future funding success?
That was the heart of our recent Masterclass, “Building Stronger Funder Relationships and Navigating Funding Rejections,” featuring wisdom from sector leaders Tia Hodges, President & CEO, MetLife Foundation, Tanya Jaramilla, Director of Impact & Operations, Julian Grace Foundation, and Natalie Rekstad, Founder & CEO of Black Fox Global.
Watch the Recording here. And below, we distill the most powerful insights and practical strategies from the session—so you can turn every “no” into a step closer to “yes.”
What Funders Value: Beyond the Transaction
Both Tia Hodges and Tanya Jaramilla emphasized that funders are looking for more than just a compelling proposal—they’re seeking transformational partnerships. As Tia Hodges put it: “I prefer transformation over transaction.”
Funders want to see how your organization’s work changes lives and communities, and they value honesty, transparency, and a collaborative spirit.
Key factors that set strong partnerships apart:
- Radical transparency: Be open about your challenges and successes.
- Long-term vision: Don’t just focus upon the immediate ask—think about how you can stay connected, even if the answer is “not now.”
- Preparation: Do your homework. Understand the funder’s priorities, past grantees, and strategic direction before reaching out.
Tanya Jaramilla added that honesty and a collaborative approach are essential:“If we’re already sitting at the table, we have a vested interest in your success. We can only do that through honesty.”
Common Mistakes NGOs Make (and How to Avoid Them)
Tia Hodges and Tanya Jaramilla see many nonprofits fall into the same traps: treating funders as ATMs, not partners; only reaching out when money is needed; failing to research alignment before applying; and taking rejection personally and disappearing.
Instead, they recommend:
- Building relationships before the ask.
- Staying in touch after a “no”—with updates, not just asks.
- Viewing every interaction as a chance to learn and grow.
The Fundraiser’s Role: Relationship-Building as a Long Game
As Natalie Rekstad shared, “Funding is far more than the proposal you submit—it’s about the relationship you cultivate prior to submission.” As a fundraiser, your role is to cultivate trust and credibility over time. Here’s how:
1. Proactive Relationship Building
Start engaging with funders well before you submit a proposal. Share updates, invite them to events, and be visible in your sector. Funders are people, too—they want to know you’re committed to the broader mission, not just your organization.
2. Sector Citizenship
Contribute to the nonprofit community beyond your own needs. Collaborate, share knowledge, and support peers. This positions you as a trusted leader and opens doors to new opportunities.
3. Follow Up After Rejection
Rejection is not the end—it’s an invitation to learn. Send a gracious thank-you, ask for specific feedback, and show your willingness to improve. As Natalie Rekstad advised, “Instead of ‘Why was our proposal declined?’ try: ‘What areas could we strengthen?’ or ‘On a scale from 1 – 10, where did we land? What would have made us a 10?’” Find a list of suggested questions in our guide: What To Do If You Are Declined Funding.
4. Professional Persistence
Keep the dialogue open between grant cycles. Share relevant updates, sector news, or learning moments. Don’t just show up when you need funding—demonstrate ongoing commitment to the mission, and shared North Star.
5. Diffuse the (real or imagined) Power Dynamic
Remember: Funders are partners, not gatekeepers. You bring vision, innovation, and impact, and your work is essential to solving the challenges you both care about. So take your full space in the meeting and in the world as the equal that you are.
Navigating Rejection: Turning “No” into “Not Yet”
Both Tia Hodges and Tanya Jaramilla shared that the organizations who turn a “no” into a future “yes” are those who:
- Continue to nurture the relationship after rejection.
- Share updates and demonstrate growth.
- Stay top of mind when funder priorities shift.
Tia Hodges shared a powerful story: “We said ‘no’ to a nonprofit during the RFP phase, but they kept in touch with occasional updates. When our strategy changed, they were the first we thought of—and we funded them.”
How to follow up after rejection (and strengthen your leadership):
- Thank the funder for their consideration.
- Ask for feedback—be specific and respectful.
- Stay visible with relevant updates.
- Reiterate your commitment to the shared mission.
- If the rapport is strong, ask if they can refer you to another funder who might be a better fit at this time.
Practical tools for donor cultivation post-rejection:
- Use a funder relationship tracker to log every touchpoint, feedback, and next steps.
- Create a timeline for re-engagement—plan non-ask updates and check-ins.
- Build a library of follow-up email templates for different scenarios.
- Debrief internally after every rejection: What did we learn? What can we improve? Is this funder still the right fit?
Sample Request for Feedback | Reflecting the Personality of the Sender
Subject: Kaizen and Quick Q&A
Dear [Funder Contact’s Name],
Thank you for your thoughtful review of our recent proposal. While we are, of course, disappointed, we are also big believers in Kaizen—the philosophy of continuous improvement—and strive to strengthen our work and deepen our alignment with partners like you.
We would greatly appreciate any feedback or insights you can share—especially regarding how we might better position our organization for future opportunities with [Funder’s Name].
We find that a 20–25 minute fast paced Zoom Q&A yields amazing insights that strengthen not only our organization and team, but also enable us to serve more effectively as sector citizens in service to the sector’s goal (or SDG goal) of [briefly share overarching vision, e.g., “advancing equitable opportunities for all”].
I hope you’ll say a resounding “yes” to a brief Zoom conversation—it will be dynamic, efficient, and focused. Just say the word—I’ll bring the questions, you bring the wisdom, and together we’ll make the sector a little stronger.
With appreciation (and fingers crossed very hard),
Your Name, Your Title, Your Organization
P.S. If there are upcoming events, reports, or initiatives from [Funder’s Organization/Program] (or even a fun meme) that we can help amplify, please let me know. We are eager to support and stay engaged with your work.
Final Takeaways
- Fundraising is about building relationships, not just submitting proposals.
- Rejection is a normal part of the process—treat it as a learning opportunity.
- Funders value honesty, transparency, and long-term engagement.
- Persistence matters—but so does professionalism and respect.
- Every “no” brings you closer to a “yes” if you keep learning, growing, and showing up.
As Tia Hodges shared: “The more I know what’s happening in your community, the more I know the challenges and the opportunities. If we’re pivoting, I’ll need to find new partners. And if I haven’t heard from you… how would I know you exist?”
And in the words of Tanya Jaramilla: “The issues you care about are the same ones we care about. If we shift our language and approach to ‘who can I partner with, who do I want to be in community with?’—that opens up so many doors.”
Want more resources?
Check out our open-source guides, including What To Do If You Are Declined Funding, our Open Source Guides, and our viral Fundraising Handbook.
This post is based on the Black Fox Global Masterclass, “Building Funder Relationships and Navigating Funder Rejections,” hosted on the Catalyst Now platform. Special thanks to Tia Hodges and Tanya Jaramilla for their wisdom and candor.
