Many organisations find themselves in the position of becoming a grantmaker without having planned for it. A bequest funds a new foundation. A company launches a corporate giving programme. A community trust transitions from investment management to active grantmaking. An iwi establishes a new grants fund. Whatever the origin, the experience of new grantmakers is often similar: significant responsibility, limited institutional knowledge, and urgent pressure to start making grants.
This guide is for first-time funders — organisations and individuals who are new to grantmaking and need to understand the basics before they can design an effective programme.
Define your purpose. Why does your grants programme exist? What problem are you trying to address? What change do you want to see in the world? Effective grantmaking starts with a clear purpose — not a list of categories, but a theory of change. What do you believe about why the problem exists, and how does funding community organisations address it?
Know your legal obligations. Grantmaking by incorporated organisations is subject to legal requirements. Charitable trusts operate under their trust deed — the document that defines who can receive grants and for what purposes. Community trusts in New Zealand have specific obligations under the Trustee Act. Gaming trusts operate under the Racing Industry Act and associated conditions. Before making your first grant, understand what your governing document allows and requires.
Understand your funding source. Where does your grant money come from? Endowment income (from an invested fund), gaming income (from gaming machine proceeds), corporate donations, or government appropriation — each has implications for how you can and should use it. Gaming trust funds in New Zealand can only be used for authorised purposes; endowment income may have specified categories in the trust deed.
Establish your governance. Grantmaking requires decision-making governance — who decides which grants are made, by what process, with what documentation. A board of trustees, a grants committee, or a combination? How will conflicts of interest be managed when decision-makers have relationships with potential grantees? Getting governance right before you start is much easier than retrofitting it after making grants.
Start simple. New grantmakers often try to design the perfect programme before making a single grant. This is understandable but counterproductive. Start with a simple programme — a small number of grants in a defined area, with a straightforward process — and learn from it before scaling.
Know your geography. Does your mandate require you to fund in a specific geographic area? Community trusts typically have defined regions; corporate giving programmes may be national or international. Geographic clarity prevents scope creep and helps applicants understand whether they qualify.
Define what you will and won't fund. What activities will your programme support? Project costs only, or also operating costs? Capital expenditure? Salaries? What activities are excluded — lobbying, religious activities, for-profit enterprises? Clear definitions prevent misunderstanding and help applicants self-select.
Set your grant size range. What is the minimum and maximum grant your programme will make? Grant size signals your programme's target audience. Small maximum grants (under $5,000) signal that you're serving grassroots community groups. Large minimum grants (over $50,000) signal that you're looking for significant strategic investment. Most programmes benefit from having a clear range.
Decide on grant duration. Will you make one-off grants or multi-year commitments? One-off grants are simpler to manage but less impactful for organisations that need sustained support. Multi-year grants require more confidence in the grantee relationship but produce better outcomes for many types of work.
Write your guidelines. Application guidelines are your primary communication with potential applicants. Good guidelines explain: who can apply, what you fund, how to apply, what to include, and how decisions are made. Plain language, clear structure, and honest guidance about your priorities make guidelines genuinely useful.
Design a proportionate process. Match your application process to your grant size. A $2,000 community grant should have a simple one-page application. A $200,000 strategic investment warrants a multi-stage process with detailed budget requirements. Over-engineered processes for small grants create barriers and waste everyone's time.
Plan for volume. How many applications do you expect? If you're new and have no track record, you may receive fewer applications than expected. If you've publicised your programme widely, you may receive more than you can manage. Plan for both scenarios.
Allow enough time. Most first-time grantmakers underestimate how long assessment takes. Allow at least four to six weeks between close date and decision date for a meaningful assessment process, regardless of programme size.
Making grants without a process. Early relationship-based grants — funding people you know without a formal process — create precedents that are hard to unwind. Even in your first round, have a documented process.
Funding only familiar organisations. It's natural to fund organisations you know. But the best grants often go to organisations you've never heard of. Actively communicating your programme beyond your existing networks reaches organisations that need funding most.
Under-investing in relationships. Grantmaking is a relationship business. The most effective funders invest in knowing their grantees — understanding their work, visiting their programmes, being genuinely curious about what they're learning. This doesn't mean only funding friends; it means building genuine understanding of the work you're funding.
Setting reporting requirements you can't use. New grantmakers often require extensive reporting to demonstrate accountability. If you don't have the capacity to read and use the reports you require, you're creating burden without benefit. Report requirements should match your capacity and your genuine need for information.
Making the grant agreement too complicated. Grant agreements need to be clear about conditions, but legal complexity that confuses grantees undermines the relationship. Use clear language, and make sure grantees understand what they've agreed to.
Document your decisions. Why did you fund this application and not that one? Documenting your assessment reasoning builds institutional knowledge, creates accountability, and helps you be consistent over time.
Review your programme regularly. After your first full round, ask: What did we learn? Who did we fund? Who didn't apply that we hoped would? What would we do differently? Systematic programme review improves practice.
Connect with the grantmaking sector. Philanthropy New Zealand is the membership body for grantmakers in New Zealand; Philanthropy Australia in Australia. Both offer training, resources, and peer networks for new grantmakers. These are among the most valuable resources available.
Hire expertise when you need it. If you're a new grantmaker without experienced grants staff, consider engaging a grantmaking consultant to help you design your programme or assess your first round. External expertise is particularly valuable at the design stage.
Tahua is designed to help new grantmakers establish professional grant programmes from the start — with guided programme design, applicant portals, assessment tools, and grant management workflows that grow with your programme.