Starting a grant programme — or stepping into a grants management role for the first time — can feel overwhelming. The vocabulary is unfamiliar, the processes seem complex, and the stakes feel high: you're making decisions about public or charitable money.
This guide explains the fundamentals of grantmaking clearly, without assuming prior knowledge.
Grantmaking is the practice of distributing charitable or public funds to organisations and individuals through a defined process. A funder (or grantor) decides who receives money from a pool of available funds; the recipient (a grantee) uses those funds for an approved purpose and reports back on what was achieved.
Grantmaking is different from:
- Contracting, where a funder pays for specific services to be delivered to the funder's specifications
- Charitable donations, which are typically unrestricted and informal
- Loans or investments, which expect financial return
Grants are typically conditional — the grantee must use the money for the approved purpose, deliver the approved activities, and report on outcomes. But grants are not commercial transactions — the relationship is based on shared purpose rather than market exchange.
Government agencies administer grants for public purposes — arts, community services, research, economic development. Government grants use public money and carry public accountability obligations.
Foundations — private foundations (established by wealthy individuals or families), community foundations (endowed by communities), and corporate foundations (established by companies) — distribute grant funds to achieve charitable purposes.
Gaming trusts — in New Zealand, organisations licensed to distribute gaming machine (pokie) proceeds to the community. Gaming trusts are a distinctive feature of New Zealand philanthropy.
Community trusts — trusts established from former community assets (electricity company sales, etc.) that distribute investment returns as grants.
Clubs and associations — many sports clubs, community organisations, and professional associations run small grant programmes for their members or the community they serve.
Most grant programmes follow a similar cycle:
Conflict of interest (COI). When a decision-maker or assessor has a personal, financial, or professional relationship with an applicant that could influence — or appear to influence — their judgment. COI must be declared before anyone participates in assessment or decision-making on related applications.
Delegation of authority. The formal authority to approve grants — who can approve what size of grant. Grants approved by someone without sufficient authority are a compliance failure.
Audit trail. A complete record of all actions taken in the grant process — who did what, when. Audit trails are essential for accountability and for responding to questions about how decisions were made.
Eligibility criteria. The minimum requirements an applicant must meet to be considered for funding. Ineligible applications should not proceed to assessment.
Assessment criteria. The factors considered in evaluating and comparing applications. Assessment criteria should be published in advance so applicants know what will be assessed.
Grant agreement. The formal contract between the funder and grantee — setting out the conditions of the grant, what must be delivered, how money can be spent, and what reporting is required.
Acquittal. The grantee's formal account of how grant funds were spent — typically a financial statement showing expenditure by category, with evidence, and a narrative confirming activities were delivered.
Not documenting decisions. Every grant decision must be recorded — who approved it, on what basis, on what date. Undocumented verbal decisions are not accountable decisions.
Missing eligibility checks. Funding ineligible organisations — for profit businesses receiving grants that require charitable status, for example — can be a serious compliance failure with legal consequences.
Ignoring COI. Not declaring and managing conflicts of interest in assessment and decision-making undermines the integrity of the process.
Under-specifying reporting requirements. Grants without clear reporting requirements leave the funder unable to know whether funded activities were delivered or funds were used appropriately.
Tahua is designed to make grants management accessible — with guided workflows that walk new grants administrators through each stage of the process.