Grants
Grants are legally less demanding than contracts. They may be legally enforceable to the extent that the recipient has to fulfil certain conditions to receive or retain a grant.
What is a grant?
A grant is money awarded to finance a particular activity or group.
Government grants are provided through agencies for a specific purpose and have reporting or compliance requirements as conditions of acceptance.
A grant is not usually as prescriptive as a contract. It may allow the recipient more flexibility in determining how it meets the goals it shares with the funder. Flexibility can be useful for both funder and recipient (eg, when funding contributes to or part-pays the work of an organisation and government does not seek a high level of control).
Unconditional grants may be appropriate in cases where there are limited or unspecified expectations of performance, while conditional grants have some specified expectations of performance.
Read more about different funding arrangements recommended by the Auditor-General.
Funding non-government organisations using grants
Grants are more likely to be used to fund low-risk activities that are not seen as core government services being delivered by non-government organisations.
Grants are often a suitable way to fund small organisation or to make a contribution to a community project. Grantseeking organisations are often small and/or managed exclusively by volunteers. Grantmakers are encouraged to:
- make application and reporting processes simple without compromising clarity about the purpose of the grant
- use online systems to make forms consistent
- make reporting requirements proportional to the size and purpose of the grant
- provide support to grantseekers in order to ensure applications accurately describe the project
The links below include guidance about when grants are appropriate and show examples of how some agencies, such as the Department of Internal Affairs, manage grant-making processes.
