What is the Purpose of a Statement of Need in a Grant Proposal? A Complete Guide for Nonprofit Fundraisers

When you’re writing a grant proposal, every section matters. But if I had to choose the single most critical component that can make or break your application, it’s the statement of need. Understanding what is the purpose of a statement of need in a grant proposal is essential to your success as a nonprofit fundraiser. This section is where you prove to funders that your project deserves their investment, and getting it right can mean the difference between securing funding and receiving a rejection letter.

In this comprehensive guide, I’ll walk you through everything you need to know about the statement of need, from its fundamental purpose to the specific strategies that will make yours stand out. By the end, you’ll have a clear roadmap for crafting statements of need that compel funders to say yes.

Understanding the Statement of Need: The Foundation of Your Grant Proposal

The statement of need, sometimes called the needs assessment or problem statement, is the section of your grant proposal where you demonstrate that a significant problem exists and that your organization is positioned to address it. Think of it as your case for why funders should care about your work right now.

What Is the Purpose of a Statement of Need in a Grant Proposal?

The purpose of a statement of need in a grant proposal is multifaceted, but at its core, it serves to:

Establish the problem’s existence and severity. You must prove to funders that the issue you’re addressing is real, urgent, and significant enough to warrant their financial support. Don’t assume that funders automatically understand the problem, even if it seems obvious to you.

Connect the problem to your community. Funders want to see that you’re addressing a local or specific need, not just talking about a general issue. Your statement of need must demonstrate how this problem manifests in the exact community or population you serve.

Create urgency and emotional resonance. While you need data and facts, you also need to help funders understand the human impact of the problem. The best statements of need blend statistics with compelling narratives that make funders feel invested in finding a solution.

Justify your proposed solution. Your statement of need sets up everything that follows in your proposal. It creates the logical foundation for why your specific program or project is necessary and why it should be funded now.

Demonstrate your organization’s credibility. By showing that you’ve thoroughly researched and understand the problem, you prove that you’re the right organization to address it. Funders gain confidence in your expertise and capacity.

The Strategic Importance of Your Statement of Need

Before we dive into how to write an effective statement of need, let me emphasize why this section carries so much weight in the grant review process.

Why Funders Read the Statement of Need First

Grant reviewers often turn to the statement of need immediately after reading your executive summary. They want to understand whether your project aligns with their funding priorities before they invest time in the rest of your proposal. If your statement of need doesn’t convince them that you’re addressing a problem they care about, they may not read further.

This makes your statement of need a critical gatekeeper for your entire proposal. You can have the most innovative program design and the most qualified staff, but if you can’t articulate a compelling need, none of that matters.

The Statement of Need Establishes Your Proposal’s Logic

Your grant proposal follows a logical progression: there’s a problem (statement of need), and you have a solution (program design). The strength of this logic determines whether funders believe in your project. If you establish a weak need, your solution will seem unnecessary. If you establish a strong need but fail to show how your solution addresses it, you’ll lose credibility.

Think of your statement of need as the foundation of a building. Everything else in your proposal rests on this foundation. Build it solid and you can construct something impressive. Build it weak and the whole structure becomes unstable.

Key Elements Every Statement of Need Must Include

Now that you understand what is the purpose of a statement of need in a grant proposal, let’s break down the essential components you must include to fulfill that purpose effectively.

Evidence-Based Data and Statistics

Hard data forms the backbone of your statement of need. Funders want to see that you’re not basing your project on assumptions or anecdotes alone. Include:

Quantitative data that establishes the scope of the problem. How many people are affected? What percentage of your target population experiences this issue? How has the problem grown or changed over time?

Credible sources for all your statistics. Always cite where your data comes from. Use respected sources like government agencies, academic research, established nonprofits in your field, or your own rigorous needs assessments. Never make up numbers or use outdated information.

Local data whenever possible. National statistics provide context, but local data proves the problem exists in your specific service area. If you serve a particular neighborhood, city, or county, find data specific to that geography.

Comparative data to show severity. Compare your community’s situation to state or national averages to demonstrate that the problem is particularly acute in your area. For example: “While the national poverty rate stands at 11.5%, our county faces a poverty rate of 23.7%.”

The Human Face of the Problem

Data tells funders that a problem is real, but stories make them care. Include carefully chosen examples that illustrate the human impact of the issue you’re addressing.

Use composite examples or anonymized real stories. Protect your clients’ privacy while sharing compelling narratives. You might write: “Consider the experience of a parent we’ll call Maria…” This approach lets you illustrate the problem without violating confidentiality.

Show, don’t just tell. Instead of writing “Families struggle with food insecurity,” describe what that actually looks like: “Parents skip meals so their children can eat. Students can’t concentrate in class because they’re hungry. Elderly residents choose between buying medication and buying groceries.”

Connect individual stories to broader data. After sharing a narrative example, tie it back to your statistics: “Maria’s situation is not unique. Our needs assessment revealed that 1 in 4 families in our service area experiences similar challenges.”

Geographic and Demographic Specificity

Vague statements of need don’t convince funders. You must be precise about who is affected and where they are.

Define your target population clearly. Don’t just say “low-income families.” Specify: “Single-parent households earning below 150% of the federal poverty level with children under age 12 in the Southside neighborhood.” The more specific you are, the more credible you appear.

Describe your geographic service area. Name the specific neighborhoods, cities, counties, or regions you serve. If relevant, explain why you’ve chosen this geographic focus.

Include demographic details. What are the age ranges, racial and ethnic compositions, educational levels, or other relevant characteristics of your target population? Use this information to show you understand exactly who you’re serving.

Current Gaps in Services

Funders want to know what’s already being done to address the problem and why it’s not enough. This is where you demonstrate that your project fills a real gap.

Acknowledge existing efforts. Show that you’ve researched what other organizations and agencies are doing. This demonstrates your knowledge of the field and your collaborative mindset.

Identify specific gaps. Be clear about what’s missing. Is there insufficient capacity? Do existing services not reach certain populations? Are there geographic areas without services? Do current programs lack a critical component?

Explain why these gaps exist. Help funders understand the barriers. Perhaps funding has decreased, demand has increased, or certain populations face unique obstacles that current programs don’t address.

Position your project as the solution to these gaps. Create a clear line from the gaps you’ve identified to what your project will do. This is the bridge between your statement of need and your program design.

How to Research and Develop Your Statement of Need

Writing an effective statement of need begins long before you start drafting. You need solid research and data collection to back up every claim you make.

Conduct a Thorough Needs Assessment

Don’t rely solely on your assumptions or general knowledge about the problem. Gather concrete evidence through systematic research.

Survey your target population. Directly ask the people you aim to serve about their needs and challenges. Their input provides valuable insights and powerful data points.

Interview key stakeholders. Talk to teachers, social workers, healthcare providers, community leaders, and others who interact with your target population. They can validate your understanding of the problem and provide additional perspectives.

Review existing studies and reports. Look for needs assessments conducted by other organizations, government agencies, or academic institutions. Don’t duplicate research that already exists—build on it.

Analyze your own program data. If your organization has been providing services, examine your records. How many people are on your waiting list? How has demand changed? What unmet needs do your clients report?

Document everything. Keep careful records of all your research, including sources, dates, and methodology. You’ll need this information for citations and to answer funder questions.

Find and Use Reliable Data Sources

Strong data makes your statement of need credible. Know where to find the best information for your field.

Government sources provide extensive demographic and statistical data. The U.S. Census Bureau, Bureau of Labor Statistics, Centers for Disease Control and Prevention, and Department of Education all offer valuable information. State and local government agencies publish reports specific to your area.

Academic research lends authority to your statements. Search Google Scholar, university research centers, and academic journals for peer-reviewed studies related to your issue.

Foundation and nonprofit research can be particularly relevant. Organizations like the Urban Institute, Pew Research Center, and national nonprofits in your field often publish reports and data analyses.

Local sources give you community-specific information. Check your local United Way, community foundation, public health department, school district, and planning commission for needs assessments and demographic reports.

Your own data is powerful when properly collected. Results from your surveys, intake forms, or program evaluations demonstrate that you’re basing your work on direct knowledge of your community.

Keep Your Data Current

Using outdated statistics undermines your credibility and suggests you’re not in touch with current conditions.

Use the most recent data available. Data that’s more than three years old should be avoided unless it’s the most recent information available for a particular metric.

Note when data was collected. Always include the year or date range for your statistics. Write “According to 2024 Census data…” not just “Census data shows…”

Update your statement of need regularly. If you’re submitting multiple proposals over time, refresh your data. Don’t recycle old statements of need without checking whether newer information exists.

Explain why older data is necessary. If you must use data from more than three years ago, explain why. “While this data is from 2020, it represents the most recent comprehensive study of this issue in our state.”

Writing Your Statement of Need: Structure and Strategy

With your research complete, you’re ready to write. Follow this structure to create a statement of need that flows logically and persuasively.

Start with a Compelling Opening

Your first paragraph should immediately engage the reader and establish the problem’s importance.

Open with a striking statistic or statement. Begin with your most powerful piece of evidence. “Every night, 2,800 children in our county go to bed hungry.” “The graduation rate at our local high school has dropped to 64%, the lowest in the state.”

Avoid generic introductions. Don’t waste space with statements like “Education is important” or “Everyone deserves access to healthcare.” Get straight to the specific problem you’re addressing.

Create a sense of urgency. Use language that conveys that this problem needs to be addressed now. “The crisis has reached a tipping point.” “Without intervention, the situation will worsen dramatically.”

Build Your Case with Layered Evidence

Move from establishing that a problem exists to demonstrating its scope, impact, and urgency.

Start broad, then narrow. Begin with national or state-level context, then zoom in to your specific community. This shows you understand the bigger picture while focusing on local needs.

Use multiple types of evidence. Alternate between different kinds of data. Follow a statistic with a brief narrative example. Present demographic information, then explain what it means for daily life in your community.

Connect cause and effect. Don’t just list facts. Explain relationships. “Because of the lack of affordable housing, families are forced to move frequently, which disrupts children’s education and leads to lower academic achievement.”

Build momentum. Arrange your evidence so that each point reinforces the previous one, creating a cumulative case for the problem’s severity.

Address the “So What?” Question

Always explain why the data matters. Don’t assume funders will make the connections themselves.

Interpret your statistics. After presenting data, tell readers what it means. “This 45% increase in homelessness over the past three years indicates that existing interventions are insufficient to meet the growing need.”

Explain the consequences. Help funders understand what happens if the problem isn’t addressed. “Students who fall behind in reading by third grade are four times more likely to drop out of high school, perpetuating cycles of poverty.”

Show the ripple effects. Demonstrate how the problem affects not just your target population but the broader community. “Youth unemployment doesn’t just harm young people—it increases crime rates, reduces tax revenues, and stunts economic development.”

Transition to Your Solution

The end of your statement of need should create a natural bridge to the rest of your proposal.

Summarize the gap your project will fill. Remind readers of the specific unmet need your program addresses. “Currently, no organization in our county provides job training specifically designed for young adults with developmental disabilities.”

Reference your organization’s qualifications. Briefly mention why you’re suited to address this need. “For 15 years, our organization has successfully provided services to this population, and we have the relationships and expertise to expand our reach.”

Create anticipation for your solution. End with language that makes readers want to learn about your program. “Addressing this critical gap requires an innovative, comprehensive approach—which our program will provide.”

Common Mistakes to Avoid in Your Statement of Need

Even experienced grant writers make these errors. Learn to recognize and avoid them in your own writing.

Focusing on Your Organization Instead of the Need

The statement of need is not about your organization. It’s about the problem.

Don’t lead with your organization’s history. Save that for your organizational capacity section. Your statement of need should focus on the community’s needs, not your accomplishments.

Avoid premature solutions. Don’t start describing your program in the statement of need. First, establish the problem thoroughly. Then, in later sections, present your solution.

Don’t make it about your funding needs. The need is not “our organization needs money.” The need is the problem in your community that deserves funding.

Using Vague or Emotional Language Without Data

Passion for your cause is important, but it must be backed by evidence.

Don’t rely on inflammatory language. Words like “devastating,” “tragic,” or “crisis” lose impact without data to support them. One strong statistic is more powerful than a dozen adjectives.

Avoid unsupported claims. Never write “Many people struggle with…” or “Studies show…” without providing specific numbers and sources. Vague assertions damage your credibility.

Don’t assume shared understanding. What seems obvious to you may not be clear to funders. Explain and document everything.

Presenting Outdated or Irrelevant Information

Stay focused and current in your statement of need.

Don’t include unnecessary background. If the history of the issue isn’t directly relevant to understanding the current need, cut it. Focus on the present situation.

Avoid tangential information. Every sentence should support your case for the specific need your project addresses. If a piece of information doesn’t directly relate, remove it.

Don’t use old data when new data exists. Using 2015 Census data when 2020 data is available suggests laziness or lack of current knowledge.

Making It Too Long or Too Short

Balance is essential in your statement of need.

Don’t write a dissertation. While you should be thorough, you don’t need to include every piece of data you found. Select the most compelling evidence and present it clearly.

Don’t be too brief. A weak, underdeveloped statement of need suggests you haven’t done your homework. Give the problem the attention it deserves.

Follow funder guidelines. If the RFP specifies page limits or word counts for the statement of need, respect them. Funders set these limits for a reason.

Failing to Connect to the Funder’s Priorities

Your statement of need must align with what the funder cares about.

Don’t submit a generic statement of need. Tailor each version to the specific funder. Emphasize the aspects of the problem that match their stated priorities.

Avoid addressing problems outside the funder’s scope. If a foundation focuses on education, don’t spend your statement of need discussing healthcare issues, even if they’re related to your work.

Don’t ignore the funder’s language. If a funder talks about “equity” or “systems change” in their materials, incorporate that language where appropriate in your statement of need.

Advanced Techniques for Strengthening Your Statement of Need

Once you’ve mastered the basics, these strategies will make your statement of need even more compelling.

Use Comparative Data Strategically

Comparisons help funders understand the relative severity of the problem.

Compare your community to broader benchmarks. Show how your area’s situation differs from state or national averages. “While the statewide poverty rate has decreased by 2% over the past five years, our county’s poverty rate has increased by 8%.”

Compare current conditions to past conditions. Demonstrate how the problem has evolved. “Ten years ago, our food bank served 300 families per month. Today, we serve 1,200 families per month—a 400% increase.”

Compare different populations within your service area. Highlight disparities. “In the northern part of our city, the graduation rate is 92%. In the southern neighborhoods we serve, it’s just 64%.”

Incorporate Visual Data (When Appropriate)

Some proposals allow or encourage visual elements. When used well, they can enhance your statement of need.

Include maps to show geographic disparities. A map highlighting service deserts or concentrating need can be powerful.

Use charts or graphs to illustrate trends. A simple line graph showing increasing demand or declining resources can communicate at a glance what might take a paragraph to explain in text.

Keep visuals simple and professional. Avoid cluttered or overly complex graphics. Each visual should have one clear purpose.

Always include a text explanation. Never let a visual element stand alone. Interpret it for the reader in your narrative.

Demonstrate Systems-Level Understanding

Sophisticated funders appreciate when you show you understand root causes and systemic issues.

Explain the underlying causes of the problem. Don’t just describe symptoms. Show that you understand what drives the issue. “Food insecurity in our community stems from the intersection of low wages, high housing costs, and inadequate public transportation.”

Acknowledge complexity. Real-world problems are multifaceted. Showing you understand this complexity actually strengthens your credibility.

Connect to broader equity issues. When relevant, explain how systemic inequities contribute to the problem. “Decades of discriminatory housing policies have concentrated poverty in these neighborhoods, limiting residents’ access to jobs, healthy food, and quality schools.”

Cite Voices from Your Target Population

Let the people you serve help tell the story.

Include direct quotes from community members. “As one parent told us, ‘I work two jobs and still can’t afford rent and food for my kids.'” These quotes humanize data and provide authentic voices.

Reference community input in your planning. “In focus groups with 50 local residents, participants identified transportation as the primary barrier to accessing healthcare.”

Show that you listen. Demonstrate that your understanding of the need comes partly from the people experiencing it. This builds trust with funders and proves you’re community-centered.

Use Authoritative Sources and Expert Testimony

Strengthen your case by showing that experts agree the problem is significant.

Quote respected voices in your field. If a leading researcher or organization has made statements about the issue, incorporate their perspective.

Reference reputable reports and studies. “According to a 2024 study by the Urban Institute…” This shows you’re informed by credible research.

Include statements from local experts. Letters from school principals, healthcare providers, or government officials can validate your assessment of the need.

Tailoring Your Statement of Need for Different Funders

Not all statements of need should be identical. Customize your approach based on the funder and their priorities.

For Foundation Grants

Private foundations often have specific issue areas and values.

Align with the foundation’s mission language. If they emphasize “breaking cycles of poverty,” use that framing in your statement of need.

Reference the foundation’s past grants. Show that you understand their funding history. “Like your support for [other grantee], our project addresses…”

Match their geographic focus. If they fund only in certain areas, emphasize how the need manifests in those locations.

For Corporate Grants

Corporate funders often care about business impact and employee engagement.

Emphasize workforce or economic development angles. Show how addressing the need benefits the local economy or workforce.

Connect to the company’s business. If applicable, show how the problem relates to their industry or customer base.

Highlight community impact. Corporations that fund in their headquarters’ communities want to strengthen those areas.

For Government Grants

Government RFPs are typically more specific and data-driven.

Follow the RFP requirements precisely. Government applications often specify exactly what information to include in the statement of need.

Use extensive documentation. Government reviewers expect thorough citation of sources and may verify your data.

Address mandated priorities. Federal grants often have required focus areas. Make sure your statement of need clearly addresses these priorities.

Include program-specific data. If the grant focuses on a specific intervention, provide data about that particular issue.

For Small, Local Funders

Community foundations and small local funders may prefer a different approach.

Emphasize local knowledge. These funders often know the community well. Show your deep understanding of local conditions.

Use less formal language. While remaining professional, you can be slightly more conversational with local funders.

Include recognizable examples. Reference local landmarks, schools, or neighborhoods that funders will know.

How Your Statement of Need Connects to the Rest of Your Proposal

Your statement of need doesn’t stand alone. It must integrate seamlessly with other proposal sections.

From Need to Goals and Objectives

Your program goals should flow logically from the need you’ve established.

Create direct connections. If your statement of need says “500 students lack access to after-school programming,” your goal might be “Provide after-school programming to 500 students.”

Ensure objectives are measurable. The data you cite in your statement of need should inform how you’ll measure success.

Match the scale. If you’ve documented a large-scale need, your goals should be appropriately ambitious. Conversely, don’t propose solving massive problems if your project is narrowly focused.

From Need to Program Design

Your program activities should directly address the need you’ve described.

Design activities that target root causes. If your statement of need identifies transportation as a barrier, your program should include transportation solutions.

Address the gaps you identified. Remember the service gaps you mentioned? Your program design should explain how you’ll fill them.

Use research to justify your approach. If your statement of need cited evidence about what works, reference that research when explaining your methodology.

From Need to Evaluation Plan

Your evaluation should measure whether you’ve addressed the need.

Evaluate outcomes related to the need. If the need is youth unemployment, measure employment rates among participants.

Use baseline data from your statement of need. The statistics you cite become your baseline. Your evaluation will show change from that baseline.

Align indicators with the problem. Every outcome you measure should relate to an aspect of the need you documented.

Refreshing and Updating Your Statement of Need

Your statement of need requires regular maintenance to remain effective.

When to Update Your Statement of Need

Keep your statement of need current by updating it regularly.

Update annually at minimum. Even if the core problem hasn’t changed, you should refresh your data yearly.

Update when significant changes occur. If new research emerges, conditions shift dramatically, or your service area changes, revise your statement of need.

Update for each new major grant. Don’t recycle the exact same statement of need for different funders. Tailor and refresh it.

Update after completing a new needs assessment. Whenever you gather new data about your community, incorporate those findings.

How to Keep Your Statement of Need Fresh

Maintain a living document that evolves with new information.

Create a research file. Keep a running document where you collect new statistics, reports, and data as you encounter them. When it’s time to update your statement of need, you’ll have current information ready.

Set calendar reminders. Schedule time quarterly or semi-annually to review and update your core statement of need template.

Monitor key data sources. Subscribe to updates from Census Bureau, your state data center, and relevant research organizations so you know when new information becomes available.

Solicit ongoing community input. Don’t wait for a formal needs assessment. Continuously gather feedback from clients, partners, and stakeholders that can inform your understanding of evolving needs.

Measuring the Effectiveness of Your Statement of Need

How do you know if your statement of need is working? Pay attention to these indicators.

Signs of a Strong Statement of Need

Funders want to know more. If reviewers call with questions about your program design or budget but don’t question your needs assessment, your statement of need was convincing.

You receive positive feedback. Some funders provide comments with rejections. If they note that you made a strong case for the need but didn’t get funded for other reasons, your statement of need succeeded.

You win competitive grants. In highly competitive funding environments, a strong statement of need often makes the difference.

Your success rate improves over time. As you refine your statement of need based on experience, you should see your percentage of funded proposals increase.

Learning from Rejection

When proposals are rejected, use the experience to improve your statement of need.

Request feedback. Many funders will provide comments on unsuccessful proposals. Ask specifically about your statement of need.

Look for patterns. If multiple funders have similar concerns or questions, your statement of need may have a consistent weakness.

Have colleagues review your statement of need. Fresh eyes can catch unclear sections or logical gaps that you’ve become blind to.

Test your statement of need with non-experts. If someone unfamiliar with your field reads your statement of need and doesn’t understand why the problem is urgent, you need to revise.

Putting It All Together: A Checklist for Your Statement of Need

Before you submit your next grant proposal, use this checklist to ensure your statement of need fulfills its purpose.

The problem is clearly defined. A reader can explain in one sentence what problem you’re addressing.

The need is documented with current, credible data. Every claim is supported by recent statistics from reliable sources, all properly cited.

The local impact is demonstrated. You’ve shown how the problem manifests specifically in your community or target population.

The human element is present. You’ve included narratives, quotes, or examples that illustrate the problem’s impact on real people.

Service gaps are identified. You’ve explained what’s currently being done and why it’s insufficient.

The scope matches your project. The need you’ve described is neither too broad nor too narrow for the program you’re proposing.

The writing is clear and compelling. You’ve avoided jargon, kept sentences active and direct, and built a logical argument.

The connection to your solution is evident. The reader can see how your proposed project directly addresses the need you’ve established.

The funder’s priorities are addressed. You’ve emphasized aspects of the need that align with what this particular funder cares about.

All sources are properly cited. Every statistic includes a citation, and all sources are credible and current.

Final Thoughts: The Statement of Need as Your Foundation for Success

Understanding what is the purpose of a statement of need in a grant proposal transforms how you approach this critical section. It’s not simply a box to check or a space to fill with statistics. Your statement of need is the foundation on which your entire proposal rests. It’s your opportunity to convince funders that the problem you’re addressing is real, urgent, and worthy of their investment.

A powerful statement of need does more than recite facts—it tells a story about your community that demands action. It combines rigorous research with compelling narrative. It demonstrates your deep knowledge of the people you serve while positioning your organization as the right solution at the right time.

Invest the time to research thoroughly, write carefully, and revise ruthlessly. Every hour you spend strengthening your statement of need increases your chances of securing the funding your community needs. Remember, funders receive countless proposals for worthy causes. Your statement of need must make them feel that your project is the one they cannot afford to pass up.

Now, take what you’ve learned and apply it to your next proposal. Gather your data, interview your stakeholders, document the gaps, and craft a statement of need that makes funders eager to support your work. Your community is counting on you to tell their story in a way that opens doors to resources and opportunity.

The purpose of your statement of need is clear: convince funders that your project deserves their support. With the strategies and insights in this guide, you’re equipped to fulfill that purpose and bring critical funding to the programs your community needs most.