Many organisations that administer grants have never written a formal grants policy. They have criteria for specific rounds, they have practice — things they do because they've always done them that way — and they have the accumulated knowledge of whoever has run the programme longest. What they do not have is a written statement of what the programme is for, who it funds, how decisions are made, and what happens when something goes wrong.
This matters more than it might seem. Without a written policy, the programme's operation depends on institutional memory. When staff change, that memory walks out the door. When a difficult decision needs to be made — a borderline application, an allegation of conflict of interest, a request to vary a grant condition — there is no document to refer back to. The decision gets made, but it sets a precedent rather than following one.
A grants policy does not need to be long. But it needs to exist, and it needs to address the situations where consistency matters most.
A well-constructed grants policy has several components:
Purpose and scope. What is the programme for? What does the funder want to achieve through its grants? This statement of purpose is not just aspirational language — it is the interpretive framework for every ambiguous decision that follows. When an assessor is deciding whether a proposal "aligns with the programme's objectives" and the policy contains a clear purpose statement, the decision has a reference point.
The scope statement defines what the policy applies to: which funds, which grant types, which rounds. If the organisation runs multiple grant programmes under different governance structures, the policy needs to clarify whether it covers all of them, each separately, or only the programme it was written for.
Eligibility. Who can apply? Eligibility criteria should be stated precisely and should be capable of objective determination. "Organisations working in the local community" is not an eligible criteria — it requires judgement to apply. "Registered charities with a Charities Services registration, operating primarily in the Greater Wellington region" is one.
The policy should also address who cannot apply: excluded entity types, excluded geographies, applicants who have previously breached grant conditions, applicants with current outstanding accountability requirements from prior grants.
Assessment criteria and process. What criteria are applications assessed against, and how are they weighted? Who assesses applications — an internal panel, an external expert panel, delegated staff? What is the decision-making authority — who can approve grants, at what value, and under what delegation?
This section creates the internal accountability structure. A programme where the CEO can approve any grant without a documented assessment process is a programme with probity risk. A programme where the process is written down, followed, and documented is one that can demonstrate it made decisions consistently.
Conflict of interest management. Who has a conflict of interest, how should they declare it, and what happens when they do? The policy needs to define what counts as a conflict (financial interest, personal relationship, prior employment, board membership), require a declaration process, and specify what happens when a conflict is declared.
The COI section is particularly important for programmes where assessors are recruited from the sector they are assessing. A policy that simply says "assessors should declare conflicts" without specifying a process, a record, and a consequence is not a COI policy — it is a statement of aspiration.
Post-award accountability. What conditions are attached to grants? What do funded organisations need to report, and when? What happens if conditions are not met — what is the programme's response to late or missing reports, to milestones not achieved, to grants used in ways that depart from the application?
Many grants policies are thorough on the assessment process and thin on post-award accountability. This creates a situation where the pre-funding decision-making is defensible but the post-funding stewardship is ad hoc.
Complaints and appeals. What can an unsuccessful applicant do if they believe their application was not fairly assessed? What is the process for investigating a complaint about the grants process? Who makes the final determination?
Having a complaints process does not mean every applicant who receives a decline will file one. It means that when one is filed — and eventually one will be — there is a process to follow rather than an improvised response.
A grants policy sets the rules. Procedures describe how to follow them.
A policy says: all assessors must declare conflicts of interest before being assigned applications.
A procedure says: at the start of each assessment round, the programme coordinator sends a COI declaration form to all proposed assessors using the template at [link]. Assessors complete and return the form before being granted access to applications in the grants management system. Declarations are stored in the grants management system attached to the relevant round.
Keeping policy and procedure separate makes it easier to update each. The policy may remain stable for years; the procedures change when the system or process changes. A single document that conflates the two becomes unwieldy and quickly out of date in the procedural sections.
A grants policy should be reviewed periodically — not just when something goes wrong. Common triggers for review:
Policy reviews should be documented. If the board or a committee approves the policy, changes should be approved at the same level. A policy that can be changed by anyone in the programme management team without governance endorsement is not a policy — it is a live document.
A written policy that nobody reads is marginally better than no policy. For the policy to work, the people making decisions need to know what it says, and the systems they use to manage the programme need to enforce it.
This means:
- Assessors are briefed on relevant policy provisions before they assess — not just sent the document
- The grants management system is configured to enforce eligibility criteria, require COI declarations, and record assessment against criteria
- Governance sign-off on grant decisions includes confirmation that the process followed the policy
- Post-award condition tracking is integrated into programme management rather than filed separately
A purpose-built grants management system configured against a clear policy is the operational expression of the policy itself. The policy says what should happen; the system makes it happen and records that it happened.
For funders designing or reviewing their grants policies and the systems to support them, the government grants management page covers how Tahua supports policy-based programme design. Charitable trust and foundation funders should also look at the community foundations page. To discuss your specific policy requirements, book a conversation.