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2023 Grant Writing and Recession Planning for Your Nonprofit

How to recession-proof your 2023 grant writing, grant management, and grant financial planning

The Situation

The experts have weighed in…Almost everyone in the financial industry agrees a global recession is coming in 2023. 

And as we look to 2023 in a world currently heavily impacted by inflation and a recession looming around the bend, it is hard not to be concerned about how that will impact your nonprofit.

So what does the projected recession mean for your nonprofit grant planning and grant writing?

Our Social Impact team has synthesized the research, and we’re happy to share it with you to empower your important work and ensure financial stability for your nonprofit in 2023.

What is a recession, and what does it mean for grants?

In its most technical essence, a recession is a business cycle contraction centered on an overall decline in economic activity, largely tied to a sharp reduction in spending. 

Economic downturns like recessions ultimately have the effect of reducing household incomes and lowering both consumer and investor confidence in the economy. This, in turn, has the impact of decreasing the confidence and spending of donors, reducing the number of donations to your nonprofit. 

And you might have already guessed how that impacts nonprofit programs– demand for nonprofit services goes WAY up as household income decreases.

So as demand for programs goes up and the amount of donations decreases, grants become an even more critical aspect of your nonprofit’s financial landscape. 

Recession Grant Planning for Nonprofits

As we’ve discussed, grants will need to be at the forefront of your financial forecasting in 2023. 

So what does that look like for your nonprofit?

Some of that depends on your current diversification plan, as each nonprofit handles its funding diversification differently. For example, one nonprofit might rely on 30% of its revenue from grants, while another might be at the 60% level. 

Overall for the nonprofit landscape, a whopping 80 cents of every dollar of nonprofit revenue in the United States comes from government grants or contracts and fees for services. Foundation grants, on average, can make up another 10%-30% (The Nonprofit Times, 2019). 

In general, when projecting the percentage of 2023 revenue that should be coming from grants, you should be looking at a minimum of a 10-15% increase when compared to the budgeted amount expected from individual donations, fee-for-service, and other revenue streams. 

Recession Grant Management for Nonprofits

Ok, so you know you need to raise another 10-15% on top of your current grants-related budget.

You’re probably asking yourself: how do I do that with my nonprofit’s current capacity?

The answer is that you need to adjust each step in your overall grant lifecycle, including prospecting, applying, securing, and after-award reporting. 

For prospecting, you need to rev up your game to identify 10 new funding sources that will allow you to yield that 10-15% increase.

For applying, you must build in the allocated staff time to write and submit the corresponding minimum of 10 proposals. This can be done by averaging the time to complete the proposals, multiplying that number by 10, and including that time into your staff’s monthly schedule. 

For securing and after-award reporting, you need to plan for the additional reporting requirements, including any post-award digital media acknowledgment and special reporting systems. This will also need to be built into your staff time allocations.

Recession Grant Writing for Nonprofits

Ok, so you’ve followed the step from the first sections of this article, and your nonprofit’s recession planning is rock-solid now- Congratulations! Awesome work. 

But when it comes to executing this plan, you might be asking yourself- how do you stay competitive to ensure you win proposals?

One key “insider’s scoop” tip is acknowledging these larger economic conditions within your grant proposal. In an appropriate financial-focused section, describe how the recession impacts your overall budget, and describe in detail your comprehensive plan to increase revenues through identifying new grant funding!

Another tip- when writing your budget narrative, note any and all increases in expenses you have experienced during the inflation. Then tie that into the predicted recession for next year- if costs have increased already, and the need for programs is also expected to rise significantly. Your budget narrative case for the grant has just become even more compelling.  

And one more tip from the Social Impact Team here at The Woolf Group: we specialize in exactly what we wrote for this article! 

We guarantee to write comprehensive proposals that are tailored, current and guaranteed to yield results and build capacity for your nonprofit through the 2023 recession and beyond. 

Learn more here .


Catherine Ruff, TWG Social Impact Specialist and Strategy Consultant