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How do grants fit in to all this?

Skip Navigation LinksThe Funding Reform Funding and Contracting How do grants fit in this?

The DCSP Policy clearly distinguishes between funding and contracting options. Under funding options, we have two further options – grants and ‘flexible arrangements’. In contracting arrangements, we have ‘service agreements’ and ‘commercial contracts’.
Grants aren’t new to most of us in the sector. We are all familiar with the concept of grants – a one-off payment for a specific purpose, or for a community organisation which Government wants to support. They are usually short-term but can exceed a financial year and are usually appropriate for seed funding, pilots, research or events rather than on-going services.

In the past, organisations or purposes sometimes have been funded through grants when in actual fact they should have been funded through a contracting arrangement, such as a service agreement.
Under the principle of sustainability, which is a core purpose of the DCSP Policy, many services that may have been funded by a rolling grants process will more than likely now be funded by a service agreement. This is because for any service that is more long term, that is, not seed funding, pilots, research or events, a service agreement is a much more sustainable and appropriate mechanism of funding that service.

Although it’s not clear now, it is likely that under the DCSP Policy we will see some reduction in the number of large value grants that do not relate to seed funding or short-term projects. In terms of how the grants will operate under the DCSP Policy, it is likely that there will not be too much of a change. Once you receive a grant, the mechanisms for dispersing and reporting on that grant will probably not change much.

The “Nature of the relationship” principle pertaining to partnership and collaboration under the DCSP policy means that you should still be involved in a collaborative relationship with your government funding body in identifying community outcomes and the mechanisms for delivering outcomes.

The funding and contracting changes emphasise sustainability of services. So when applying for a grant, you still need to ensure that the grant will allow you enough cash flow to deliver the outcome effectively. Don’t overpromise and under-deliver, or potentially compromise on quality. As per the advice for tendering, if you are putting forward a grant application make sure you are considering all of your costs, and if you need to, alter the size of the service in order to ensure that you are not running at a loss as an organisation in delivering on the outcome.

Finally, the “Reducing the administrative burden” changes reflect the importance of ensuring that community service organisations do not have to spend time on overly burdensome reporting and collecting data that doesn’t relate directly to proving outcomes. The principles of the relationship and the policy still apply to any relationship you have with a government department, regardless of whether it is ‘funding’ or ‘contracting’.

click here to see a fact sheet on the component II funding 

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