A grants management policy is a foundational document for any serious grantmaking organisation. It defines how grant decisions are made, who makes them, what safeguards are in place, and how the organisation is accountable for its use of grant funds. Without a documented policy, grantmaking depends on individual judgement — which creates inconsistency, governance risk, and accountability exposure.
This guide covers the key elements of a grants management policy and how grants management software supports policy compliance.
Consistency. A policy ensures that similar applications are treated similarly — that the same criteria, the same process, and the same documentation standards apply to every grant round, regardless of which staff member is running it.
Legal protection. For government agencies, publicly funded organisations, and charitable trusts, documented process is the evidence that decisions were made appropriately. In the absence of a policy, challenged decisions are defended by assertion rather than process.
Staff clarity. Programme staff need to know what they are authorised to do and what requires escalation. A policy that documents delegation authorities, approval thresholds, and conflict of interest requirements reduces ambiguity.
Governance accountability. Boards and senior management need confidence that grants are being administered appropriately. A policy provides the framework against which they exercise oversight.
Auditability. Regulators, auditors, and oversight bodies look for documented processes. A policy that exists, is followed, and is supported by system records is the foundation of a clean audit outcome.
Define what the policy covers: which grant programmes, which funding sources, which types of recipients. Clarify what is not covered (e.g., procurement, in-kind support, sponsorships).
Define who is eligible to receive grants: legal status requirements (charitable registration, incorporation), geographic restrictions, organisational type, and any exclusions (organisations controlled by connected parties, organisations in sanction).
Assessment process. How are applications assessed? Single assessor, panel, community panel, hybrid? What is the basis for comparison — weighted criteria scoring, qualitative ranking, budget allocation?
Assessment criteria. What are the criteria against which applications are assessed? How are they weighted? Are criteria published in advance?
Decision authority. Who can approve grants, and at what levels? Typical delegation structures include: staff officer up to a threshold; senior manager between thresholds; board/committee above a threshold; full board for very large or unusual grants.
Contestable vs non-contestable grants. Are all grants awarded through open, competitive processes? Or are some grants made by invitation, nomination, or relationship? The policy should distinguish these clearly.
Disclosure requirement. All assessors, decision-makers, and staff involved in the grant process must disclose any conflict of interest — direct or indirect — with any applicant.
Types of conflict. Define what constitutes a conflict: financial interest, family relationship, board membership, significant prior relationship. Some policies distinguish between "pecuniary" (financial) and "non-pecuniary" (other) conflicts.
Management of declared conflicts. What happens when a conflict is declared? The policy should specify: does the conflicted person withdraw from the assessment entirely, or only from the specific applicant they have a conflict with? Who documents the declaration and the management decision?
Undeclared conflicts. What happens if a conflict is identified that was not declared? Define the consequences and the process for reviewing decisions that may have been affected.
Grant agreements. Define when a written grant agreement is required (for most programmes, always) and what it must contain: grant purpose, conditions, reporting requirements, payment schedule, consequences of non-compliance.
Reporting requirements. What reporting do grantees need to provide? Progress reports, financial reports, final reports? At what intervals? In what format?
Payment structure. When are payments made? On signing? Against milestone completion? Against reporting submission? The policy should define the standard approach and the conditions for variation.
Monitoring. How does the funder monitor that grants are being used appropriately? Desk review of reports, site visits, financial audit for large grants?
Non-compliance and recovery. What happens if a grantee fails to meet conditions, misuses funds, or cannot deliver? Define the process for managing non-compliance and the circumstances under which funds are recovered.
Records to be maintained. Define what records must be kept for each grant: application, assessment records, decision documentation, grant agreement, correspondence, reports.
Retention periods. How long must grant records be kept? For government-funded programmes, this is often defined by public records legislation. For charitable organisations, it may be defined by charity law or tax requirements.
Data protection. How is applicant and grantee personal data managed? Who can access it? How is it stored and disposed of?
Public reporting. Does the funder report publicly on grant outcomes? At what level of detail? Some funders publish a full list of grants awarded; others report only aggregate statistics.
OIA/Freedom of Information. For government funders, the policy should address how grant records are managed in the context of information access legislation — what is releasable, what is appropriately withheld, and how records are produced in response to requests.
Complaints and appeals. Does the funder have a formal appeals process for declined applicants? Define the grounds, process, and decision authority.
A grants management policy that exists only as a document is less effective than one that is embedded in the system used to run grants. Software that enforces policy requirements — requiring COI declarations before assessors can access applications, enforcing approval thresholds, producing the documentation required for compliance — turns policy into practice.
The gap between the policy on paper and the process actually followed is a governance risk. Grants management software that is designed around the policy's requirements — rather than requiring workarounds to achieve compliance — reduces this gap.
Tahua provides grants management software built around the governance and accountability requirements of documented grantmaking policies.