The board's role in grants: oversight, strategy, and real help

Ask an executive director what they want from their board on grants, and you will often hear "help me find money." Ask a board member, and you may hear "I don't know anything about grants." Both answers miss the board's real role.

The board does not need to write proposals. It needs to make sure the organization pursues the right grants, can deliver on them, spends restricted money correctly, and is not overly dependent on any single funder. It can also open doors no staff member can. This guide explains what that looks like in practice.

The legal frame: three duties

Nonprofit board members owe the organization three core fiduciary duties. BoardSource describes them this way:

• Duty of care: the care "that an ordinarily prudent person would exercise in a similar position and under similar circumstances." For grants, that means asking informed questions about what you are committing to.
• Duty of loyalty: putting the organization's interests ahead of personal and professional interests. For grants, that means disclosing conflicts, such as a board member who also sits on a funder's board.
• Duty of obedience: complying with laws and the organization's bylaws and policies, and guarding the mission. For grants, that means making sure restricted funds are used as promised and that grants serve the mission rather than pulling it off course.

Every responsibility below follows from these duties.

What the board should do

1. Set the funding strategy

Grants should serve a plan, not the other way around. The board, working with the executive director, should decide:

• What share of revenue the organization aims to get from grants versus individual giving, earned revenue, and events
• Whether to pursue government funding, which brings stability and compliance obligations
• How much dependence on a single funder is acceptable
• Which programs grants should support, and which should not be grant-dependent

2. Approve significant commitments

Not every application needs a board vote. But some grants create obligations large enough that the board should approve them. Many organizations require board approval, or at least board notification, when a grant:

• Exceeds a set dollar amount or share of the annual budget
• Requires matching funds or cost share, which commits the organization's own money (for federal awards, cost sharing in the approved budget becomes a binding requirement under 2 CFR 200.306)
• Creates a new program, new staff positions, or a multi-year commitment
• Carries significant compliance obligations, such as federal funding
• Could create mission drift or reputational risk

Put the rule in a written policy so staff know when to bring a grant to the board. Some government funders also require a board resolution authorizing the application. Check the requirements of each funder.

3. Oversee grant compliance and risk

The board does not track receipts. But it must make sure systems exist to spend grant funds properly. That includes:

• An annual audit or review, with the auditor reporting to the board or its finance or audit committee
• Financial statements that show restricted net assets separately
• Policies on conflicts of interest, document retention, and whistleblowers
• Awareness of the federal single audit threshold: under 2 CFR 200.501, an organization that expends $1,000,000 or more in federal awards in a fiscal year must have a single audit

The IRS asks about governance on Form 990, Part VI, including whether a copy of the return was provided to the governing body before filing and what process the organization uses to review it. Reviewing the 990 is also a good way for board members to see the organization's revenue and grant picture.

Learn more in our guides to post-award compliance and the single audit.

4. Open doors

This is where board members can make a difference no staff member can. Board members often know foundation trustees, corporate leaders, community foundation staff, and local elected officials. Concrete ways to help:

• Review the prospect list each year and flag anyone they know
• Make introductions, by email or in person, when a funder accepts contact
• Join site visits, especially the board chair
• Write or sign letters to funders where appropriate
• Thank funders personally after awards

5. Give personally

Many grant applications ask what percentage of the board makes a personal financial contribution. Funders ask because board giving signals commitment. A policy that every board member makes a personally meaningful annual gift, of whatever size, lets you report full participation.

6. Help tell the story

Board members should be able to describe the organization's work and results in a couple of minutes. That helps in funder conversations, site visits, and community settings. Share grant reports and outcome data with the board so they speak from evidence.

What the board should not do

• Write grants routinely. It is an operational task. In very small organizations with no staff, a board member may help, but define the role clearly.
• Bypass staff with funders. Contacting a funder's trustees about a pending proposal without coordinating with staff can damage the relationship.
• Push for grants that don't fit. Chasing money outside the mission creates programs you cannot sustain.
• Accept percentage-based arrangements. Do not hire a grant writer, or let a board member work, on a commission or percentage of grants won. The Grant Professionals Association's code of ethics says members "shall not accept or pay a finder's fee, commission, or percentage compensation based on grants." See hiring a grant writer.
• Micromanage proposals. The board approves strategy and major commitments. It does not need to edit every narrative.

Questions to ask before approving a major grant

When a significant grant comes to the board, members do not need to read the whole proposal. They do need to ask the questions that test whether the organization can deliver. Exercising the duty of care looks like this:

1. Mission fit. Does this grant advance our strategic plan, or does it pull us toward work we would not otherwise do?
2. Full cost. What will this project really cost, including staff time, overhead, and administration? Does the grant cover it, and if not, where does the rest come from?
3. Match and cost share. Are we committing our own cash or in-kind resources? Are they budgeted and realistic?
4. Capacity. Do we have the staff, systems, and partners to run this well and report on it? Who will manage it?
5. Compliance. What reporting, audit, and documentation requirements come with this money? For federal funds, are our financial systems ready?
6. Risk. What happens if the grant ends early, is reduced, or is not renewed? Would we have to lay off staff or end services?
7. Sustainability. What is the plan to continue the work after the grant period?

When there is no staff

In very small or all-volunteer organizations, board members often do the grant work themselves. That can work well if roles are clear:

• Assign one board member to coordinate grants and keep the grant calendar.
• Have a different board member, usually the treasurer, prepare or review budgets and financial reports, so no one person controls both writing and money.
• Keep all drafts, submissions, and funder correspondence in a shared folder the whole board can access.
• Report on grants at every board meeting, as you would with staff.
• Consider whether a fiscal sponsor or a part-time consultant would reduce the burden while you grow.

Conflicts of interest

Grant relationships create conflict-of-interest risks that boards should manage openly:

• A board member who also serves on a funder's board or staff should disclose it and generally should not participate in that funder's decision about your organization. Follow both organizations' policies.
• A board member whose business would benefit from a grant-funded contract should disclose it and recuse themselves from the decision.
• A board member who is hired to write grants for the organization should disclose it, and the board should approve the arrangement under its conflict-of-interest policy.

What the board should see, and when

Worked example: a board grants report

This report gives the board what it needs: a picture of the pipeline, progress against budget, and a specific decision and request.

Building a grant-ready board

Funders often look at your board as part of assessing organizational capacity. They may ask for a board list with affiliations, how often the board meets, and whether it reflects the community you serve. To be ready:

• Keep a current board list with names, affiliations, and terms.
• Hold regular meetings with minutes.
• Maintain the policies funders often ask about: conflict of interest, whistleblower, document retention, and financial controls.
• Approve the annual budget and review the audit.
• Track board giving participation.

A board that governs well makes every grant application stronger, because funders are investing in the organization as much as the program. If your board is unsure where to start, our readiness assessment includes governance questions funders commonly ask.