Grantmaking Path: From Idea to Signed Agreement

Seven steps for people who give grants, from choosing who to approach to a signed funding agreement and a light monitoring plan, with the choices to settle before you start.

WhatsAppEmail

What You Will End Up With

A signed funding agreement, and a process that got you there without wasting anyone's time. A grant is money given to an individual, an organization or a local government for a specific purpose, and it is not repaid. The agreement is the document that records what both sides understood that purpose to be.

If you give grants from a family fund, a donor-advised fund or a foundation, this page puts the whole route in order so you can see which decision comes next, and where you can ask less of applicants than you first planned.

Before You Start

Settle three things before you open the door to applications. Each one saves applicants a decision about whether to apply.

  • How long you will commit. Multi-year grants typically run from 2 to 10 years, and most fall between 3 and 5. Some funders start with a first year of unrestricted money so both sides can get to know each other before committing for longer.
  • Whether you will screen with a short letter of intent. A letter of intent lets you judge whether funding is likely before anyone writes a full proposal.
  • What you do and do not fund. Say it plainly, along with how decisions are made and when applicants will hear. Foundations are not legally required to have a fixed method for receiving applications, or even to accept them, so this is your call to make and then to state.

Steps

  1. Look beyond your own circle. Examine your networks, including your board, your staff and the professional bodies you belong to. If every lead comes from the same few people, you are reinforcing the same limited circles. Go looking for other sources of names, and do some of the reading yourself.

  2. Fit the application to the grant. Foundations should ask whether the burden of applying matches the size of the grant and the kind of organizations they hope to reach. Most foundations take written or electronic applications, usually through a website, though some accept a phone interview, a meeting or a video. Offer more than one route if you can. Cut the jargon, too. Phrases such as "theory of change," "quantifiable metrics" and "scalability" can lock out organizations that do excellent work and have never needed the vocabulary. Check that your requirements do not shut out volunteer-run groups, fiscally sponsored groups or organizations in an early stage. If you can accept an application or report already sent to another funder, say so. If you cannot, explain why you need a bespoke one. And if you ask applicants to do something that takes real time outside their usual work, pay them, at a rate similar to what you would pay a consultant.

  3. Choose how you will select. A short letter of intent works as a screen: read it, decide whether funding is likely, and only then ask for a full proposal. For the full proposals, decide how awards will be allocated. Peer review is one option. If you use it, think about who the reviewers are. One national science funder, for example, selects reviewers with no apparent potential conflicts and instructs them how to identify and declare any conflicts of interest. To help people decide whether an application is worth their time, give them a rough indication of what share of applications receive funding.

  4. Do your own homework. In trust-based grantmaking, the work of initial research moves to the funder, who gets to know prospective grantees instead of asking each organization to complete extensive vetting before it can submit a proposal. Ask grantees only for information you need and cannot find elsewhere. Apply the same test to every question on your form: is the answer already available, or will you simply not use it?

  5. Decide the award. Grant funds must be used specifically for the designated purpose, so check that the project's start date fits. Be honest with yourself about how competitive the process is, because every unsuccessful application is effort on the other side of the table. When you pick, consider unrestricted funding for small grassroots organizations, especially those led by people from underrepresented groups or by people with disabilities.

  6. Write the funding agreement. Use it to document the shared understanding of the grant's purpose. Keep it consistent with how you ran the process. If you promised flexibility, write it in. Be clear that any amount not used for the purposes of the grant is repaid to the funder. Both sides sign before money moves. If you offer non-monetary support alongside the grant, state that accepting it is optional and that the answer will not affect current or future funding.

  7. Plan monitoring and reporting. Many foundations need to monitor grants and receive reports to meet legal compliance and show impact, though not all do. Where you do, cover the costs this puts on the grantee. Think carefully before paying in arrears, which can place an unnecessary burden on grassroots groups with few or no reserves and can even do them harm. Then stay flexible. Be ready to respond when a funded organization asks to change a payment schedule, a budget, a reporting date, the grant length or its objectives, because contexts change.

Using AI Safely

An AI assistant can give you a first draft of a funding agreement or a plain-language summary of your application requirements. It cannot know what you and the grantee understood the purpose to be, and it often reaches for the stiff language you were trying to remove. Keep a person in charge of the final text.

  • Check the purpose line against your own notes. A draft will often invent a generic goal. The purpose has to match what you and the recipient actually discussed.
  • Read for jargon. Look for terms such as "scalability" and "theory of change" that can exclude some organizations, and replace them with plain words.
  • Look at the reporting clauses. If you have agreed to cover the cost of monitoring and reporting, the text should say so.
  • Confirm the optional support wording. The draft should state that accepting non-monetary support is optional and will not affect funding.

Do not paste a grantee's private information into a public tool. Keep the agreement itself, with names and amounts, out of anything you do not control.

Common Mistakes

  • Asking for what you do not need. Every question that duplicates information available elsewhere, or that nobody will read, is a cost to the applicant. Cut it.
  • Ignoring proportionality. A long form, heavy vetting and frequent reports for a small grant tell the grantee that you do not trust them. Match the effort you ask for to the size of the award.
  • Leaving reporting costs with the grantee. If you require monitoring and reports, cover what they cost to produce.
  • Writing in insider language. Terms such as "quantifiable metrics" and "scalability" turn away volunteer-run and grassroots groups.
  • Paying in arrears to groups without reserves. It can leave a small organization carrying your grant on its own credit.