What it means
A request for application, often shortened to RFA, is how a funder announces that money is available and describes what it wants to buy. Think of it as a shopping list with a budget, published so that eligible applicants can compete.
The document normally states the purpose and priorities of the funding, the total amount available, the likely size of each award, the eligibility rules and the scoring criteria. It also gives the submission deadline and the required format for the narrative and the budget.
Finance teams get involved early because the budget is scored along with the project idea. Applicants must show reasonable and allowable costs, which means costs that the funder's rules accept, and may need to include indirect costs (overheads such as rent and administration) at an agreed rate.
An RFA differs from a request for proposal, which usually seeks a supplier to deliver a defined service under contract. In an RFA, the applicant normally proposes its own project within the funder's priorities, and the money is a grant, not payment for services.
Winning the grant is only half of the job, as awards bring reporting duties, restrictions on how funds can be spent and audit rights for the funder. Organisations that take awards without costing the compliance workload often find that the grant does not cover its real cost.
Timing deserves attention too. Funders often publish an RFA several months before the deadline, and the strongest applications use that period to gather quotes, confirm partners and agree internal approvals for the budget.
In practice
Real-world examples.
Example
A health foundation publishes an RFA offering up to $750,000 for community nutrition programmes. A local charity's finance lead builds a three-year budget and a cost allocation sheet before the narrative is finished, so numbers and plans match. The charity also confirms that its auditor will be able to sign off the grant reporting.
Example
A national science agency issues an RFA for early-stage clean energy research. A start-up compares the funder's allowable cost rules with its own accounting codes and finds that it has to track staff time more closely than it currently does. It decides to introduce timesheets before applying, which also improves its internal cost reporting.
Example
A city government releases an RFA for small business recovery grants. A bakery owner uses the stated scoring weights to decide which parts of her application, such as job creation figures, deserve the most evidence. She gathers payroll records to back up the numbers she quotes.
Formula
Calculation
Total request = direct costs + indirect costs, where indirect costs = indirect cost rate x the base the funder allows.
Suppose a university department applies under an RFA with direct costs of $400,000 (salaries $300,000, equipment $60,000, travel $40,000). The funder allows an indirect rate of 25% on the direct costs. Indirect costs = 0.25 x 400,000 = $100,000. The total request = 400,000 + 100,000 = $500,000.Case study
Seen in the real world.
Riverbend Learning is an illustrative, fictional non-profit that tutors adults in basic financial skills. It spotted an RFA offering $300,000 over two years and drafted an enthusiastic project plan.
The finance manager then read the cost rules and found that the funder capped indirect costs at 10%, while Riverbend's real overhead was nearer 22%. A budget that matched the cap would leave about $36,000 of overhead unfunded across the award.
Riverbend decided to apply anyway but added a fundraising line to cover the gap and reduced the number of sites it proposed to run. The funder later praised the realism of the budget, and Riverbend won the award at a slightly reduced level of $270,000. The illustrative lesson is that the budget deserves as much attention as the narrative.
Watch out
Common mistakes.
- Starting to write the project narrative before reading the eligibility rules and cost limits, and so discovering too late that the organisation cannot qualify.
- Building a budget with costs the funder will not allow, which can lead to a scoring penalty or a reduced award.
- Ignoring the reporting and audit workload that comes with the award, which can make a small grant a net drain on resources.
Questions
People also ask.
Is a request for application the same as a request for proposal?
No, an RFA invites applicants to propose projects for a grant, while an RFP usually seeks a supplier to deliver a defined service under contract.
Who pays for overheads under an RFA?
It depends on the funder, which may allow a set indirect cost rate, cap it or exclude it, so the rule has to be read in the document.
What happens if the application misses the deadline?
Most funders reject late applications without scoring them, so internal deadlines should be set well before the stated date.
From the founder's library
Take it further with the book.
Build your financial confidence beyond this definition. Shihan's full-length guide, Accounting Fundamentals, takes the same plain-English approach and turns it into a complete, practical playbook for non-finance managers, business owners and students - with chapter-end quiz answers and presentation slides included.
25% off with code MMHQ25, applied at checkout. Priced in USD - checkout may show the equivalent in your local currency.
View the book and save 25%Related