The signature line is the document. The award letter is a summary. When a foundation sends a grant agreement to a tenant union, a community land trust, or a volunteer-run mutual aid network, the terms on the page — not the congratulations paragraph — govern what your board can and cannot do for the next year. Read the agreement before anyone signs it, and read it with the reporting schedule and the repayment clause open in front of you.
This is a reading guide, not legal advice. It is anchored to two publicly posted sample agreements — the Council on Foundations’ Sample Grant Agreement and the Tinker Foundation’s Grant Agreement (v06.2024) — plus the IRS page on Reports from Grantees and Alliance for Justice’s explainer Grants & Lobbying: What Funders Need Grantees to Know. These are samples, not a survey of the sector. But they show the clause types a small neighborhood organization will encounter, and they show how much discretion a funder can write into a single paragraph.
Start with the reporting schedule, not the dollar amount
The first thing to find is the reporting table. In the Tinker sample, the agreement contains a “Reporting Schedule” with columns for report type, reporting period, and due date, and it requires all reports to be submitted using the foundation’s template on its grant portal. The Council on Foundations sample is looser: it asks for a report after six months and a final report after one year, plus a copy of any audited financial statement when available.
For a group with no paid staff, the difference between those two formats is the difference between a workable grant and a second job. A portal-based template with fixed due dates may require someone to learn a new system, upload financial detail, and hit a deadline that does not move. Before signing, ask three questions in writing:
- What is the exact report format, and can we see the template now?
- What counts as an acceptable report — a narrative plus a simple income-and-expense statement, or a full budget-to-actual reconciliation?
- If a deadline falls during a crisis, is there a written process for an extension?
These are not hostile questions. They are the questions that prevent a missed deadline from becoming a repayment demand.
Why the reporting burden is not just administrative
Under IRS rules for private foundations, the granting foundation must require reports on the use of funds, compliance with grant terms, and progress toward the grant’s purposes. The grantee must make an annual accounting of the funds at the end of its accounting period and a final report on all expenditures and progress. That is the legal floor. The IRS page on Reports from Grantees also states that a grantee’s failure to make required reports results in the grant being treated as a taxable expenditure by the grantor unless the grantor meets specified conditions — including withholding future payments until the report is provided.
Read that again from the grantee’s side. A missed report does not just annoy the program officer. It can convert the grant into a tax problem for the funder, which gives the funder a strong incentive to enforce the reporting clause strictly. The reporting schedule is therefore not paperwork. It is the mechanism that keeps the money from being clawed back.
The repayment clause: find every trigger
The Council on Foundations sample contains a blunt sentence: if the grant supports a specific project or a specific period, “any portion of the grant unexpended at the completion of the project or the end of the period shall be returned immediately to The Foundation.” The same sample reserves to the foundation the right to discontinue, modify, or withhold payments, or to require a total or partial refund, if in the foundation’s “sole discretion” such action is necessary because the grantee has not fully complied, to protect the grant’s purpose, or to comply with law.
The Tinker sample goes further on installment grants. Each installment is contingent on the grantee’s progress “as determined in our sole discretion,” compliance with the agreement including timely reports, and no material changes in the grantee’s operations, staffing, funding, structure, or tax status that would adversely affect its ability to carry out the grant purpose. The same agreement requires the grantee to promptly repay any funds not used for the grant purpose.
“Sole discretion” is the phrase to circle. It means the funder decides whether progress is adequate, whether a staffing change is material, and whether a payment continues. A volunteer board should decide before signing whether it can live with that, and whether it can ask for language that ties suspension to a written finding and a cure period. The Tinker sample also states that the agreement may not be amended or modified except in a writing executed by both parties — which is exactly why the negotiation has to happen before signature, not after the first disputed payment.
Restricted purpose and budget lock-in
Both samples restrict the money to the approved purpose and budget. The Tinker agreement says funds may be used only in accordance with the proposal and budget approved by the foundation, and the Council on Foundations sample says the grant may not be expended for any other purpose without the foundation’s prior written approval. For a community garden, that can mean the difference between moving $400 from soil to a water hookup and filing a written request. For a tenant union, it can mean the difference between responding to an eviction crisis and waiting for approval.
Ask for a written line-item flexibility threshold — for example, permission to move up to a stated percentage between budget lines without prior approval, with notice in the next report. If the funder will not agree, budget conservatively and build a contingency line into the proposal.
Publicity, logos, and who controls your name
The Council on Foundations sample requires the grantee to let the foundation review and approve the text of any proposed publicity concerning the grant before release. The Tinker sample requires the grantee to acknowledge the foundation’s funding in publications, press releases, talks, interviews, and other media related to grant-funded activities, and subjects any other use of the foundation’s name or marks to prior written approval. It also grants the foundation an irrevocable, non-exclusive, royalty-free license to use, reproduce, and publicly display publications, studies, research, and similar works provided by the grantee in connection with grant-funded activities.
For a land trust that publishes a stewardship report or a mutual aid group that writes a public accountability piece, those clauses matter. A prior-approval requirement on publicity can delay or soften a statement about a funder, a landlord, or a city agency. The license can outlast the grant. Read the scope: does it cover only materials you send the funder, or all grant-funded work? Does it survive termination? The Tinker sample lists the acknowledgement and use-of-name-and-marks paragraphs — along with recordkeeping and indemnification — among those that survive termination. The license paragraph is not listed among the surviving paragraphs.
Notification duties: the events you must report
The Tinker sample requires prompt notice of a change in the executive director, CEO, or president; notice from another significant funder that it is ceasing funding; a change in charitable status; and the filing of certain legal claims. The Council on Foundations sample requires immediate written notice of any change in tax-exempt status, inability to spend the grant for its purpose, or any expenditure for an unintended purpose.
These are easy to miss because they are not on the reporting calendar. A board chair who steps down, a major funder who pulls out, a fiscal sponsor change — each can trigger a notice obligation. Put every notification duty on a single one-page compliance sheet and assign one person to watch it.
Lobbying and advocacy: boilerplate versus the law
Many agreements contain broad language barring political or lobbying activity. The Council on Foundations sample prohibits expenditure of grant funds for any political or lobbying activity. The Tinker sample prohibits use of funds to carry on propaganda, direct or indirect lobbying, or attempts to influence legislation within the meaning of Section 4945(d)(1) of the Internal Revenue Code, or to influence elections under Section 4945(d)(2).
Alliance for Justice’s explainer makes a point that small grantees should understand: the prohibition on earmarking does not mean private foundations must prohibit grantees from using grant funds for lobbying, and “a grant agreement that forbids use of the funds for lobbying is unnecessarily restrictive.” A grant is earmarked for lobbying if it is conditioned on an oral or written agreement that the grant be used for lobbying. General support grants and specific project grants can be structured so the foundation avoids a taxable expenditure without forbidding the grantee from lobbying.
The Council on Foundations’ own advocacy toolkit acknowledges the problem from the funder side: foundations, through their guidelines, grant agreements, and other communications, can inadvertently prevent or discourage grantees from civic participation. That is a useful sentence to quote back to a program officer when you ask for narrower language.
What to ask for, in writing: either remove the lobbying restriction where the grant is general support, or narrow it to the specific legal requirement — no use of these funds for earmarked lobbying — and confirm that nonpartisan voter education, research, and regulatory comment are permitted. Do not assume the boilerplate reflects the law. Ask the funder to point to the statute or regulation that requires the specific restriction.
Records retention and access
The Council on Foundations sample requires financial records and copies of reports to be kept for at least four years following the year in which all grant funds are fully expended. It also gives the foundation reasonable access during regular business hours to the grantee’s files, records, accounts, personnel, and clients or other beneficiaries for financial audits, verifications, or program evaluations. The Tinker sample requires complete and accurate records for at least four years after funds are fully expended and makes them available for inspection on request. Its monitoring paragraph is narrower: visits from foundation personnel, discussions with the grantee’s staff, and review of financial and other records connected with grant-funded activities.
For a volunteer-run organization, the Council on Foundations sample’s “personnel and clients” access deserves a conversation. Who at the organization will sit in on a funder visit? What client information is off-limits? Put a records-retention folder in place before the first check arrives, and designate one board member as the records custodian.
A pre-signature checklist for one board meeting
Print the agreement. Give every board member a copy. Run these questions in order:
- What is the exact reporting schedule, and who owns each report?
- What triggers repayment, and does any trigger rest on the funder’s sole discretion?
- Can we move money between budget lines, and at what threshold?
- What prior-approval rights does the funder have over publicity, logos, or written work?
- What events require notice, and by when?
- What does the lobbying clause actually prohibit, and is it narrower than the law requires?
- How long must records be kept, and who can inspect them?
- Which clauses survive termination?
Then decide, as a board, which clauses to negotiate and which to accept. Put the negotiation in writing. If the funder will not budge on a clause that conflicts with your mission, that is information about the funder, not a failure of your organization.
Organizing in a small city or rural county is exhausting in a specific way: the same twelve people run the meeting, file the reports, and knock the doors. The grant agreement is one more document in that pile. Read it anyway. The deadline you miss in month eleven is set by the clause you skimmed in month one.
Questions readers actually ask
Can we sign now and negotiate later?
The Tinker sample states the agreement may not be amended except in a writing executed by both parties. That means a verbal promise from a program officer does not change the terms. Negotiate before signature, and get any change in writing.
Is a lobbying restriction in a foundation grant agreement legally required?
Not in the broad form many agreements use. Alliance for Justice states that a grant agreement forbidding use of funds for lobbying is unnecessarily restrictive, because the earmarking prohibition does not require foundations to prohibit grantees from lobbying. Ask the funder to identify the specific legal requirement behind any restriction.
What happens if we miss a report?
Under the IRS rules described on the Reports from Grantees page, a grantee’s failure to make required reports results in the grant being treated as a taxable expenditure by the grantor unless the grantor meets specified conditions, including withholding future payments until the report is provided. Treat every report deadline as a payment deadline.
Where can we see what a funder’s agreements typically look like?
Ask the program officer for a copy of the standard grant agreement before you apply, not after you are awarded. The two samples cited here — the Council on Foundations sample and the Tinker Foundation agreement — are public examples of the clause types to expect.
Sources: Council on Foundations, Sample Grant Agreement (cof.org); Tinker Foundation, Grant Agreement v06.2024 (tinker.org); IRS, Reports from Grantees (irs.gov); Alliance for Justice, Grants & Lobbying: What Funders Need Grantees to Know (afj.org); Council on Foundations, Foundations for Civic Impact Advocacy and Civic Engagement Toolkit (cof.org).