AI and the Grant Gap: Why Emerging Tech is No Longer Optional in Nonprofit Fundraising — Grantyd - June 23, 2025
June 23rd, 2025 By Lane F. Cooper, Editorial Director, BizTechReports
As government grants shrink and private funders raise the bar on accountability and responsiveness, nonprofit organizations are navigating a complex new funding landscape—one where operational capacity, not just mission alignment, increasingly determines outcomes.
Recent data from the National Council of Nonprofits confirms that government grant disbursements are shrinking in both size and reliability, while private foundations are increasing demands for speed, transparency, and measurable impact. These current developments are actually part of a longer-term trend. A 2023 survey by the Center for Effective Philanthropy found that 62% of institutional funders have heightened reporting requirements and shortened deadlines. These shifts mean that even highly mission-aligned organizations may fall short—unless they can deliver timely, high-quality, and data-informed grant applications.
The most consequential shift in this environment? The growing imperative to “scale the back office,” where automation and AI are beginning to separate the adequately resourced from the perpetually overextended.
The most consequential shift in this environment? The growing imperative to modernize the grant application process itself. Specifically, organizations must now scale the operational "back office" functions—especially grant development workflows—through automation, document intelligence, and AI-enhanced drafting tools. It's no longer enough to write great proposals. The speed and volume required today demand a re-engineered approach to execution.
In a recent BizTechReports Executive Vidcast, Francesca Axam-Frederick, CEO and co-founder of Grantyd, outlined how this transformation is unfolding—and what it means for organizations that have long prioritized service delivery over internal modernization.
The Structural Challenge: Scarcity Meets Complexity
Nonprofit leaders today are contending with two simultaneous pressures: diminishing access to federal dollars and a more competitive, data-driven philanthropic marketplace. Foundation giving remains stable—and in some cases is increasing—but the process of securing those funds is becoming more demanding.
“There’s a real sense of urgency,” said Axam-Frederick. “Nonprofits are being asked to apply for more grants, more frequently, with more documentation and faster turnaround times. But they’re doing it with the same—or smaller—teams.”
In the traditional model, grant writing is labor-intensive and often siloed. Application processes differ wildly between funders, requiring grant writers to spend hours copying, pasting, and formatting boilerplate answers into disconnected portals. With each submission potentially requiring 40–60 individualized responses, inefficiency is built into the system. Organizations with even modest levels of funding dependence on grants find themselves locked in a cycle of manual labor that stifles growth.
There is a growing sense of urgency to reverse this damaging trend. The 2024 State of Grantseeking Report from GrantStation revealed that the average time to complete a single grant application rose 17% from 2021 to 2023. More strikingly, 42% of surveyed nonprofits reported having fewer development staff today than before the pandemic.
The Technology Gap: Operational Drag in the Age of Automation
In the nonprofit sector, tech modernization efforts are frequently delayed or deprioritized in favor of more immediate programmatic needs. This is particularly problematic because modern fundraising is no longer just a communications or relationship exercise—it’s a workflow challenge.
This is the challenge Grantyd was built to address. At its core, the platform automates the grant application process by extracting questions directly from submission portals, offering users the option to draft responses using AI trained exclusively on their own organizational documents. Responses are not generated from public data or generic language models; they are contextually derived from what the nonprofit itself has already created.
“You still have to make the strategic decisions about what to say and how to say it,” said Axam-Frederick. “But we eliminate the need to do the same tedious things over and over—copying and pasting, checking for formatting, tracking where you are in a submission.”
This emphasis on augmenting—not replacing—human expertise reflects a broader trend in enterprise software: purpose-built automation tools that address narrow but critical operational bottlenecks. In nonprofit grant writing, the bottleneck is often not inspiration or vision—it’s time.
Scaling Throughput Without Scaling Overhead
One of the most compelling arguments for AI-assisted grant writing is its potential to expand output without increasing headcount. The math is simple: the more grants a nonprofit can apply for, the greater its chances of success. But until now, that principle has been constrained by human bandwidth.
In a case study highlighted during the Vidcast, a nonprofit executive facing 20 simultaneous grant deadlines—without a grant writer—was able to complete applications and plan a major fundraising event using Grantyd’s platform. By preloading her organization's documentation and streamlining the submission process, she shifted her time from paperwork to donor engagement.
“This isn’t just about writing faster,” Axam-Frederick explained. “It’s about freeing up senior leadership to focus on the high-value activities—outreach, relationship-building, strategic planning—that are required for long-term sustainability.”
The result is a fundamental shift in the economics of fundraising. Automation reduces the cost per application and increases the marginal ROI of each hour spent on development. For small nonprofits that typically rely on one-person development teams—or none at all—this is not merely helpful. It’s potentially transformative.
The AI Learning Curve: Human Ethics Meet Machine Intelligence
While large enterprises now routinely incorporate AI into their workflows, nonprofit professionals remain divided. Some see the technology as dehumanizing or misaligned with their values. Others simply lack the training or resources to explore its potential.
Grantyd’s model attempts to navigate this tension by emphasizing transparency and control. Users choose whether to engage with the AI drafting feature. When they do, it draws exclusively from uploaded materials—ensuring that the narrative voice remains authentic and rooted in mission.
“There’s a misconception that AI means outsourcing your story,” said Axam-Frederick. “That’s not what we’re doing. We’re giving people tools to work smarter, not to hand off the parts of the job that require heart and vision.”
Still, Axam-Frederick acknowledges that technical literacy—particularly around prompt engineering and AI configuration—is becoming a necessary skill set for fundraisers. But she’s wary of language that paints lagging adoption as failure.
“If nonprofits are slow to adopt AI, that’s not a reason to abandon them. It’s a reason to build better tools and offer better training,” she said. “Leaving nonprofits behind in the next wave of digital transformation means leaving the communities they serve behind.
Access and Affordability: A Democratized Model
The Grantyd platform offers a free tier for manual use—grant extraction and response population—and a $20/month tier for unlimited AI-assisted drafting. There is no per-grant fee and no revenue share, a model that Axam-Frederick says is designed to avoid disincentivizing access.
“We don’t believe in taking a percentage of the funding people are fighting to secure,” she said. “That money is meant to serve a mission.”
This model reflects a broader shift in tech-for-good platforms: moving away from enterprise software economics and toward accessible, scalable infrastructure that mirrors consumer tools like Canva or Airtable. The implication is clear—if nonprofits are going to be expected to compete in a data-driven, AI-enabled philanthropic market, they need tools that reflect their operational realities, not just their ideals.
Toward a New Funding Culture
Ultimately, what platforms like Grantyd reveal is that technology-enhanced grant writing is emerging as a strategic function for non-profits that requires the same level of investment, measurement, and continuous improvement as any other core business operation.
For now, the technology is evolving faster than many nonprofits can absorb. That said,: in a funding environment defined by uncertainty and scarcity, those who fail to modernize their operations may find themselves locked out of the very resources they need to survive.
The opportunity—and the risk—go far beyond grants. They reach to the heart of what nonprofits must become in the 21st century: not just mission-driven, but infrastructure-savvy, data-literate, and technologically equipped to compete in an economy that rewards speed, scale, and precision.
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