Shalom Lamm on Fixing the Broken Grant System: How Nonprofits Are Rewriting the Rules for Funding Impact
For decades, grant writing has been considered a necessary — and often dreaded — part of nonprofit operations. It’s the gatekeeper to capital, the paperwork-filled maze many organizations must navigate to stay alive. But more and more leaders are saying what many have long thought: grant writing is broken.
Endless applications. Unclear requirements. Onerous reporting. Low odds of success. High administrative burden.
Entrepreneur and nonprofit strategist Shalom Lamm is among a growing group of voices calling for a new approach to funding social impact — one that prioritizes trust, collaboration, and innovation over bureaucracy.
“The system wasn’t designed to support innovation. It was designed to control risk,” says Lamm. “But risk is exactly what’s required to solve society’s hardest problems.”
In this post, we’ll explore why the traditional grant process is failing today’s nonprofits — and how a new generation of leaders like Shalom Lamm are building smarter, more equitable, and more sustainable alternatives.
Why Traditional Grant Writing Is Failing Nonprofits
Grant writing has long been the lifeblood of nonprofit financing. But increasingly, organizations — especially smaller, grassroots, and BIPOC-led nonprofits — are finding the system exclusionary, outdated, and fundamentally inefficient.
Here are some of the biggest pain points:
1. Bureaucratic Overload
Most grants require extensive documentation, repetitive data input, and follow-up reporting — much of which drains resources from the very communities the nonprofits are trying to serve.
“You’re spending 40 hours writing an application for a $10,000 grant,” says Lamm. “That’s not sustainable.”
2. Misalignment Between Funders and Mission
Many funders push narrow funding priorities, forcing nonprofits to bend their mission just to be eligible — leading to “mission drift.”
3. One-Sided Power Dynamics
Grantmakers often operate with a lack of transparency. Nonprofits don’t know how decisions are made, when they’ll hear back, or why they were denied.
4. Short-Termism
Many grants are short-term or project-specific, discouraging organizations from investing in infrastructure, leadership, or long-term planning.
Shalom Lamm’s Perspective: “We Need to Fund People, Not Just Projects”
Shalom Lamm, who has worked at the intersection of entrepreneurship and social good for more than two decades, believes the nonprofit sector is long overdue for a shift in mindset.
“Funders should stop thinking like banks and start thinking like venture partners,” he says. “Invest in leadership. Invest in the ability to adapt. That’s where the real impact happens.”
Lamm has advised dozens of nonprofits — from community-led housing initiatives to international aid organizations — and he’s seen the inefficiencies of the grant system up close.
In one case, a youth mental health nonprofit he supported spent three months applying for a competitive federal grant, only to lose it to a larger, well-connected agency with less on-the-ground impact. “They could’ve served 300 more teens with that time,” Lamm notes.
The lesson: more paperwork doesn’t mean better outcomes.
Who’s Rewriting the Rules?
Despite the challenges, a new wave of nonprofits and funders are pushing back — and creating new funding models that prioritize trust, speed, and accessibility.
1. The Rise of Trust-Based Philanthropy
In this model, funders give unrestricted funds, streamline applications, and treat grantees as partners — not just recipients.
The Whitman Institute, one of the pioneers of trust-based philanthropy, closed its own foundation to focus on spreading the model. Dozens of others, including the Ford Foundation and MacArthur Foundation, are following suit.
“Trust-based funding is what real partnership looks like,” says Lamm. “It’s about humility — funders realizing they don’t always know best.”
2. Collaborative Grantmaking
Rather than top-down decisions, some organizations are shifting to participatory grantmaking, where community members and grantees have a voice in how funds are distributed.
Examples include:
- The Brooklyn Community Foundation, which involves residents in deciding grant priorities
- Disability Rights Fund, which includes people with disabilities in all stages of funding decisions
3. Tech-Enabled Grant Platforms
Innovative platforms like Submittable, Fluxx, and JustFund are using tech to make the process faster, more transparent, and equitable. Some are even using AI to eliminate bias in initial application scoring.
Shalom Lamm has been advising a startup building a grant-match engine — think “Tinder for nonprofit funding” — that aims to connect smaller nonprofits with funders based on shared values and impact goals, not just size or reputation.
How Nonprofits Are Adapting
Forward-thinking nonprofits aren’t waiting for funders to change — they’re reimagining how they approach grants altogether.
1. Writing Fewer, Better Applications
Rather than casting a wide net, some organizations are focusing only on grants that are highly aligned — and developing deeper relationships with funders.
2. Telling Better Stories
Beyond metrics and logic models, storytelling is becoming a vital part of grant strategy. Lamm advises nonprofits to highlight lived experience, center community voices, and connect emotionally.
“Numbers validate. Stories move,” he says. “A compelling narrative can open doors that data alone won’t.”
📊 3. Measuring Impact Differently
Impact isn’t always linear — and nonprofits are beginning to push back on rigid KPIs in favor of holistic, human-centered evaluations.
Shalom Lamm encourages nonprofits to co-design evaluation methods with funders. “If your work is relational or preventative, standard metrics may miss the point,” he explains.
What the Future Could Look Like
If enough funders and nonprofits commit to change, the grant world could look radically different in five years:
- Unrestricted, multi-year grants as the norm
- No more 40-page applications
- Community-centered funding decisions
- Fast-track microgrants for emergencies or pilots
- Real investment in nonprofit infrastructure and leadership
Lamm believes this shift isn’t just possible — it’s already underway.
“We’re in a moment where people are rethinking everything — work, philanthropy, power. That’s a huge opportunity for nonprofits to lead by example.”
Final Thoughts: A Call to Fund Boldly
Grant writing doesn’t have to be broken forever. But fixing it means both nonprofits and funders must let go of outdated models and embrace trust, transparency, and transformation.
“Funders have to stop asking, ‘Can you prove this works?’ and start asking, ‘How can we help you try?’” says Shalom Lamm.
The nonprofits that will lead us into the future aren’t the ones with the slickest grant reports. They’re the ones who dare to do things differently — and now, finally, funders are beginning to listen.
