When deciding whether to grant an award, funders take into consideration an organization’s capacity to properly administer the funding. This includes the ability to compliantly receive, expend and account for the funds according to the funder’s requirements. It’s important to understand your organization’s policies and procedures related to establishing and managing all types of awards and funds. Policies and procedures are documents that clearly define an organization’s managerial and operational principles, requirements, rules and responsibilities.

These documents should make it clear to both internal and external stakeholders what is to be done, by whom and in what way. Comprehensive fiscal and administrative policies and procedures are an indication of adequate administrative capacity. For example, organizations receiving federal funds (as either a direct recipient or a subgrantee) are required to have the following organizational policies and procedures in place that describe how the organization will monitor expenditures and ensure that they conform to project budgets and are properly allocated and recorded.