4 Overlooked Factors Organizations Should Evaluate Before Pursuing Grant Funding
- Sarah Murphy
- 5 days ago
- 4 min read
Before chasing grant dollars, it’s worth slowing down and asking a harder question: will this funding actually strengthen your organization long term, or quietly stretch it thin? These four insights highlight what many organizations miss until it’s too late.
At a glance, the overlooked factors include:
Whether your team truly has the administrative capacity to manage the grant
The full lifecycle costs that extend beyond the initial award period
How well the grant aligns with long-term strategy, not just short-term cash flow
Whether funder success metrics match how your frontline teams already work
Together, these perspectives point to one shared truth: alignment beats ambition when it comes to sustainable grant funding.
Capacity, Not Dollars, Determines Grant Viability
Arthur Putzel brings a perspective shaped by decades in commercial real estate and nonprofit board service, and his warning is blunt. The real risk is not the size of the grant. It’s the strain it puts on your operational backbone.
He explains that organizations often fail to measure the true administrative burden of grant compliance before applying. Reporting, audits, systems, and staff time all carry a cost. When those demands outpace existing capacity, the grant starts consuming the very resources meant to advance the mission.
Putzel shares how organizations occupying tens of thousands of square feet lost flexibility when funding structures shifted. The mission didn’t fail. The operating model did. His practical litmus test makes the risk tangible: calculate the fully loaded cost of managing the grant and compare it to what actually reaches the program. If compliance eats up more than a third of each dollar, the math no longer works.
The deeper question he leaves organizations with is simple but uncomfortable. If the grant disappeared in a few years, would the organization be stronger because of what it built, or weaker because it reorganized around temporary funding?
Arthur Putzel, Principal & Broker
Calculate Full Lifecycle Costs Before You Pursue Grants
Albert Richer extends that idea by zooming out to the entire lifespan of a grant. Too often, organizations focus on what the funding enables at launch and overlook what it demands over time.
Richer points out that many grants come with ongoing expectations that don’t end when the check clears. Reporting cycles, audits, staffing needs, data tracking, and renewal pressures can quietly turn a short-term opportunity into a long-term obligation. When those responsibilities outlast the funding itself, organizations can drift into dependency mode without realizing it.
The risk isn’t just financial. It’s strategic. A well-chosen grant strengthens existing systems and reinforces how the organization already operates. A poorly chosen one leaves behind permanent workload, new roles, and compliance habits that no longer serve the mission once funding dries up.
Evaluating lifecycle costs upfront helps leaders decide whether a grant builds capacity or simply borrows it from the future.
Albert Richer, Founder
Prioritize Strategic Fit Over “Free” Grant Money
Nikita Sherbina brings the conversation back to focus. On paper, grant funding looks free. In practice, it rarely is.
Sherbina emphasizes how reporting and compliance can quietly siphon attention away from core work. Even manageable paperwork becomes a problem if it pulls key people off the work that actually drives impact. Over time, that tradeoff erodes performance in ways that don’t show up in grant reports.
His rule is straightforward. Before applying, ask whether the grant moves long-term strategy forward or just fills a temporary gap. If it’s the latter, the hidden cost may be higher than the benefit.
In this view, alignment isn’t a nice-to-have. It’s the difference between funding that supports growth and funding that distracts from it.
Nikita Sherbina, Co-Founder & CEO
Align Funder Metrics With Frontline Reality
Jacob Reese introduces a factor many organizations don’t consider until friction sets in: metric mismatch.
Drawing from large-scale operational experience, Reese explains that any initiative requiring teams to adopt entirely new definitions of success creates drag. If a grant measures impact using data your teams don’t naturally collect, staff end up translating their work instead of doing it.
That friction compounds over time. When funder priorities begin to outweigh the needs of the people being served, the organization’s operating system quietly breaks. Reese’s reminder is grounded in a simple principle passed down through generations: the customer is the boss. When reporting requirements override that reality, everyone feels it.
Grants work best when funder success metrics align with how frontline teams already think, act, and measure progress.
Jacob Reese, Vice President
Final Takeaway
Across all four perspectives, one message comes through clearly. The most overlooked factor in grant funding isn’t money at all. It’s alignment. Alignment with capacity. Alignment with systems.
Alignment with strategy. Alignment with the people doing the work every day.
Organizations that pause to evaluate these factors upfront don’t just avoid bad grants. They protect their mission, their teams, and their long-term ability to serve. And that’s worth far more than any short-term funding win.
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