Why retaining funders beats finding new ones—and how to do it

Your best shot at finding foundation funding is working with the grantmakers you already know and have a relationship with. But building those relationships can be harder than it sounds, especially when so many foundation grant applications appear to be by invitation only.

We spoke with Candid’s Vice President of Influence Aleda Gagarin, and Associate Vice President of Research Cathleen Clerkin, Ph.D., to dive into this topic further. Here’s what Candid’s data, and 13 years of fundraising experience, tells us about why and how to nurture lasting funder relationships.

Why retaining funders is the best approach

Retaining existing funders instead of seeking out new ones isn’t just good relationship practice. The numbers back it up.

Cathleen shared that a recent analysis of thousands of nonprofits found that, on average, 60% of private foundation funding comes from funders who have given to that organization before. In 2023—our most recent comprehensive year of grants data—that number climbed to 70%.

And right now, 60% of nonprofits say it’s getting harder to fundraise from foundations, with 40% bringing in less than before, according to a report from the Center for Effective Philanthropy. This is not the moment to be chasing cold leads. “The amount of effort you have to put into getting a new funder is so much more than the amount of effort to retain funders,” said Aleda.

The funders already in your corner are your most valuable asset. Not only are they your best bet for year-over-year funding, but they’re the ones most likely to increase your funding if you need more. Don’t take them for granted.

The ‘no unsolicited proposals’ wall isn’t as solid as you think

The Candid research team found that, on their IRS filings, 71% of foundations say they do not accept unsolicited proposals. “But when we surveyed large foundations directly whether they accepted unsolicited proposals, 55% said yes,” Cathleen noted.

Why is there a gap? The Form 990-PF asks funders to check a box if they “only make contributions to preselected charitable organizations and do not accept unsolicited requests for funds.” However, in practice, most foundations have more flexibility. Many accept unsolicited letters of inquiry. Some have a short window open each year. Others just prefer a conversation before any formal submission.

“If the foundation’s a really good fit for the kind of work you do, you should just reach out to them and start making those connections,” said Cathleen. “The worst outcome is silence. And that’s likely where you already are.”

Stop leading with the ask

One of the most common mistakes fundraisers make is treating the first touchpoint as the pitch for funding. “I’ve literally never had that work out for me in 13 years of fundraising for Candid,” said Aleda.

In 2013, as a new development associate at Candid, Aleda sent 99 cold letters of inquiry. None of them landed. The one new grant she secured that year—a $250,000 award that hit her entire annual target—started with a conversation she kept building on over time.

“It’s the old adage that fundraisers know: Ask for money, get advice. Ask for advice, get money,” said Aleda. Ask for a 25-minute introductory meeting. Use this first outreach to start a conversation, not make a request. Learn what the funder cares about. Find common ground. The ask comes later.

Practical steps to build up your funder relationships

You don’t need to overhaul your whole strategy. Start here.

1. Share information without asking for funding: You shouldn’t only be talking to funders when you have an ask or a problem. The majority of your conversation, your outreach, your stewardship with funders should just be “Here’s this thing I thought you would be interested in.”
2. Show up on social media: Find a funder that you know is a good fit for your nonprofit and follow them on LinkedIn or whatever platform they’re most active on. You can start a conversation by responding to their posts with well-thought-out comments.
3. Prioritize retaining funders: Don’t take your current funders for granted. The amount of effort you have to put into getting a new funder is so much more than the amount of effort needed to retain funders. Real fiscal strength and sustainability require a strong, steady base.
4. Put your board to work: Boards can help open fundraising doors, but you need to be clear and specific about what you need them to do. Don’t ask, “Can anyone help with fundraising?” Share a list of your top prospects and ask, “Do you know any of these people, and if yes, are you willing to vouch for us and connect us?” Draft the emails for them if you have to—project manage their involvement as needed.

And remember that while foundations have the money, your nonprofit also has power. “Foundations cannot exist as tax havens without giving out at least 5% of what they earned that year to qualifying nonprofits,” said Aleda. “They can’t function without you, either. You are the on-the-ground, in-the-work expert.”

Funder relationships take time. But the data is clear that they’re worth building. Start with one conversation this week.