Grantmaking is one of the core components of your foundation's mission, whether it be funding for innovative projects or resources distributed to underserved communities; a well-thought-out grant policy lays the path. Guiding operations from within while building trust with grantees and stakeholders alike requires a well-thought-through grant policy.

In this guide, we take a deep dive into what grant policy is, why it is very critical for foundations, who does it benefit, and just how to create one. We'll also cover the common mistakes foundations make when crafting a policy and the role that a company like  Fluxx—a grant management software solution—plays to uncomplicate the process.

What Is a Foundation Grantmaking Policy?

A foundation grantmaking policy is the written document containing your foundation's guiding principles, goals, and procedures for grantmaking. Many think of it as equal parts rulebook for staff and roadmap for grantees:

  • Eligibility Requirements
  • Application processes
  • Evaluation criteria
  • Reporting and compliance requirements

A good grant policy allows for transparency and consistency while protecting your foundation from inefficiencies or even legal challenges.

Are Grant Policies Required for Foundations?

Even though creating a defined foundation grantmaking policy is not a legal necessity for any foundation, grant policies come highly recommended by most in the field. Many private foundations will be obligated to put this grantmaking into a concrete framework, largely to keep up with the many regulations laid down by the IRS and/or specific legal requirements.

In creating a grant policy, you establish principles of equity, minimize administrative tension, and protect your foundation from credibility concerns with donors, partners, and grantees.

Who Needs a Grant Policy?

Grant policies are not only useful but also rather crucial for all parties involved in the grantmaking cycle. All kinds of foundations need to have something written down on paper that will enable them to carry out their mission and also comply with the regulations. For grant managers, these policies set up a consistent process of application review and reporting. The leadership uses these as tools to maintain accountability and make sure that priorities align with strategies.

Read the full article about creating a foundation grantmaking policy at Fluxx.