A conflict of interest policy is one of the most important governance documents for any organisation that makes grant decisions. Without a clear, consistently applied COI policy, grant decisions are vulnerable to real or perceived improper influence — undermining public trust in the organisation and exposing trustees and staff to personal liability.
This guide covers what a COI policy for grantmakers should include, how to implement it, and common scenarios where COI arises.
Grant decisions involve allocating scarce charitable or public funds among competing applicants. The public — and the communities funders serve — have a right to expect that decisions are made on merit, not on the basis of personal relationships or private interests.
When a trustee or assessor has a relationship with an applicant, several problems can arise:
Actual bias. The decision-maker may genuinely be influenced by their relationship — consciously or unconsciously favouring (or disadvantaging) a related applicant.
Perceived bias. Even if the decision-maker was entirely objective, the existence of a relationship creates the appearance of impropriety. In public accountability contexts, the appearance of bias can be as damaging as actual bias.
Legal exposure. Trustees who participate in decisions where they have undeclared conflicts may breach their duties under the Trusts Act 2019 (NZ) or equivalent legislation — creating personal liability.
A conflict of interest exists when a decision-maker has a personal, financial, or professional relationship with an applicant that could reasonably be seen to influence — or could actually influence — their judgment.
Common examples in grantmaking:
What is NOT a conflict:
- Being aware of the applicant's reputation (most people in a sector know each other)
- Having previously funded an applicant through the same programme
- General sector knowledge of an applicant's work
- Having attended an event run by an applicant organisation
The test is: does the relationship create a reasonable concern about the objectivity of the decision-maker's judgment?
A comprehensive COI policy for grantmakers should cover:
Definition of conflict of interest. What constitutes a conflict — including the categories of relationships that trigger declaration.
Annual declaration. All decision-makers (trustees, board members, committee members, staff involved in assessment) complete an annual declaration of potential conflicts — listing all organisations with which they have a relevant relationship.
Meeting-level declaration. At the start of each meeting or assessment process, decision-makers are asked to declare any conflicts with items on the agenda.
Management after declaration. When a conflict is declared, the standard management approach:
1. The conflict is recorded in the minutes or assessment documentation
2. The conflicted person withdraws from discussion of the relevant application
3. The conflicted person does not vote or score the relevant application
4. The conflicted person does not receive the assessment materials for the relevant application (for sensitive information)
Escalation. What happens when a conflict is serious — a trustee is also the chair of a major applicant — or when most of the panel has a conflict with a particular application?
Record retention. COI declarations and management records should be retained for the accountability period.
Annual review. The COI policy should be reviewed and re-adopted annually.
COI register. Maintain a register of declared conflicts — updated annually and whenever a new conflict arises.
Assessment-level COI check. Before each grant round, assess which assessors have declared conflicts with which applicants. This requires comparing the assessor COI register against the list of applicants in the round.
Panel composition review. When designing assessment panels, consider whether any panel members have declared conflicts with large or controversial applicants. If most assessors have conflicts with a particular applicant, consider bringing in an external assessor without a conflict.
Exclusion logistics. In in-person meetings, the conflicted trustee physically leaves the room during discussion of the relevant application. In online or asynchronous assessment, the system should prevent the conflicted assessor from accessing the application.
Minutes and documentation. Every instance of declared conflict management should be documented — who declared a conflict, with which applicant, and how the conflict was managed.
"Everyone knows everyone" in small sectors. In tight-knit sectors (NZ arts, rural health, Pacific communities), almost all assessors will know almost all applicants. The policy should specify that general sector knowledge and professional acquaintance are not conflicts requiring withdrawal — only specific relationships that could actually influence judgment.
Conflicted assessors for niche art forms or specialisations. In highly specialised areas, there may be only a handful of qualified assessors nationally — and most of them will know the applicants. In these cases, document the assessment carefully, use multiple assessors, and focus on the quality of the documented assessment rather than eliminating relationships.
Trustee as chair of major applicant. This is a serious conflict. The trustee should withdraw not just from the specific application discussion but from any strategic discussion about the programme that could indirectly influence the outcome.
Tahua supports COI management with structured annual declarations, application-level conflict flags, and assessment exclusion workflows — creating a documented COI record that protects your organisation's integrity and your trustees' personal accountability.