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Grant agreement template for small foundations

A grant agreement written as a letter: it tells the grantee about the grant, sets the terms, and comes back signed. The free Word template has a term checklist to decide first, fill-in fields for every detail, and an optional section for grants that need expenditure responsibility. No email needed.

Download the template (.docx, 40 KB) Works in Word and Google Docs

Published 2026-11-02 · Last updated 2026-11-02 · Sources checked November 2, 2026

This page and the template are not legal advice. Have your counsel review your agreement before you use it.

What a grant agreement covers

A grant agreement says what the money is for, when it will be paid, what the grantee owes you in return, and what happens if things change. Decide each term before you write. The template’s first page is this checklist, with the letter section that covers each one.

Scroll the table sideways to see every column.

Grant agreement terms and what to decide for each
Term What to decide
Purpose General operating support, or a named project and its budget
Amount and grant period The total, and the dates the money should be spent between
Payment schedule One payment or installments, and what each one waits for
Reports Interim and final reports, the period each covers, and due dates
Required documents What you need before the first payment
Use of funds Charitable purposes only, and the activities grant money can’t pay for
Budget changes How much can move between budget lines before the grantee asks
Records How long the grantee keeps them, and your right to see them
Tax status The status you expect, and notice if it changes
Unspent funds Returned at the end, unless you agree to extend
Publicity Whether the grantee may name you or use your logo
Changes and termination When you can hold or stop payments; changes in writing
Signatures Yours, and an authorized officer of the grantee

For a real example from the field, see the sample grant agreement from the National Center for Family Philanthropy (PDF, 2002). It covers most of the same ground in one page.

Payment schedule and conditions

A small one-year grant is often paid in one installment when the signed agreement comes back. For a larger or multi-year grant, tie later installments to something you can check: an accepted interim report, or a date. The template’s payment table has a row per installment and a “paid when” column for that condition.

It also says you may hold a payment while a report is overdue. Write that in now. It is much easier to hold a payment the grantee agreed could be held.

Bank details deserve their own rule. The template says any change to the grantee’s account must be confirmed by phone. Call a contact you already know, not a number in the email that asked for the change.

Reports and required documents

Put the report schedule in the agreement, with dates, not “as requested.” A one-year grant may need only a final report. Give the grantee time after the period ends to close its books, for example 30 days. What to ask for in each report is its own question; our grantee report template is a short form you can attach or link to.

List the documents you need before the first payment: the signed agreement, and anything else your policy calls for, such as a W-9 or a certificate of insurance. The grantee due diligence checklist covers what to check before you get this far.

Use of funds, unspent funds and ending a grant

The use-of-funds section limits the grant to charitable purposes and lists what grant money can’t pay for: influencing a specific public election, voter registration drives, attempts to influence legislation, and regranting without your approval. These follow the list a private foundation’s written commitment must contain for an expenditure responsibility grant (26 CFR 53.4945-5(b)(3)). The lobbying line is marked for your counsel: ask how it should read for a public charity that lobbies with its own money.

The rest of the letter covers what happens when plans change. Unspent funds come back at the end of the grant period unless you agree to extend. Money spent outside the agreement is repaid. You can hold or stop payments if the grantee loses its tax status or stops meeting the terms. Any change to the agreement is in writing and signed by both sides.

Grants that need expenditure responsibility

When a private foundation makes a grant to an organization that is not a public charity, such as another private foundation or a 501(c)(4), the grant generally needs expenditure responsibility. Under 26 CFR 53.4945-5, that means a pre-grant inquiry, and a written commitment signed by an officer, director or trustee of the grantee that clearly states the purpose. In it the grantee agrees to:

  • repay any part of the grant not used for its purposes;
  • send full and complete reports on how the money was spent and the progress made, as of the end of each of its accounting years, then a final report;
  • keep records of receipts and spending, and make its books available to you;
  • not use the money for lobbying, electioneering, voter registration drives, non-compliant grants or non-charitable purposes.

The foundation then reports each such grant on its annual return. The template’s section 13 has these commitments in plain words, and says to delete it when the grantee is a public charity. Get advice before you rely on it, especially for a grant outside the US.

Award terms in FundMesa

FundMesa doesn’t write or sign the agreement for you. It keeps the terms you agreed on and acts on them. In FundMesa for funders, each award has terms: a report schedule (monthly, quarterly, semi-annual or annual), how you’ll pay, the budget lines, any goals, and a list of the documents you need, such as the signed grant agreement, a W-9 or a certificate of insurance.

The documents go to the grantee as one request, and the grantee uploads them in the grantee portal with a free login. A payment can wait until you accept the documents you need before the first payment. The grantee sees the same terms in the portal, read only.

The Funder plan is $249 a month billed annually, or $299 month to month, with unlimited staff and a 30-day free trial.

FundMesa for funders

Free grant tracking spreadsheet for foundations

Frequently asked

What is the difference between a grant award letter and a grant agreement?

An award letter tells the grantee it got the grant. A grant agreement sets the terms and is signed by both sides. One letter can do both: it announces the grant and asks the grantee to sign and return it. The template is that kind of letter.

Do we need a written grant agreement for every grant?

For a grant that needs expenditure responsibility, yes: the regulations require a written commitment signed by an officer, director or trustee of the grantee. For other grants it is your policy’s call. A one-page letter with the purpose, the amount and the report due date covers the basics.

Who should sign the grant agreement?

Someone with authority to bind each side. For the foundation, that is usually the board chair or executive director. For the grantee, an officer such as the executive director or board chair. Your counsel can confirm what your bylaws require.

What happens to unspent grant funds?

Whatever the agreement says. The template asks for unspent funds back at the end of the grant period, unless you agree in writing to extend it. For an expenditure responsibility grant, the grantee must agree to repay any amount not used for the grant’s purposes.

Can we use this template for a grant to an individual?

No. Grants to individuals have separate IRS rules, and this letter is written for grants to organizations. Ask your counsel.

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