Also called the needs assessment, this section requires a well-crafted statement of the problem that needs to be addressed. Explain what the problem is, who is at risk, and how your organization became aware of this need. Mention how this problem is currently being handled and how addressing this issue in greater depth can rectify the problem.

Be factual in your statements, cite sources wherever possible, and include information about how the issue is affecting economics, social well-being, the environment, or other key areas. Match the needs and interests of the foundation whenever possible without stretching your own limits.

By the end of this section, you should have drawn the reader into the problem at hand. If you are appealing to a foundation that is interested in your cause (which you would know from your research), a well-crafted problem statement should have the decision-makers' undivided attention.