Grants Decision Tree Tool

A range of financial arrangements can be used  to address policy outcomes. It is the responsibility of each entity to decide what type of financial arrangement is most appropriate and to apply the relevant framework. Officials must ensure that they use the latest versions of the CPRs and CGRGs when considering the type of arrangement an activity might be. In making this decision, it should be underpinned by analysis and a strong policy rationale that is well documented.

For some funding programs, it can be difficult to determine whether they are a grant or a procurement. To assist in determining what the financial arrangement is likely to be, there are some considerations and questions that can be asked.

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Officials often need to determine if an arrangement a grant or a procurement or something else?
Often these distinctions aren’t immediately obvious.

In determining the answer to this question, entities need to consider:

  • What is the substantive purpose for which the funds are to be provided;
  • What are the characteristics of the arrangement;
  • What is the source of the funds; and
  • Where services are provided and who is the beneficiary of the services (a Commonwealth entity or part of the community?).

What is considered a Grant

A ‘grant’ is an arrangement for the provision of financial assistance by the Commonwealth or on behalf of the Commonwealth.

  • under which relevant money or other CRF money is to be paid to a grantee other than the Commonwealth; and
  • which is intended to help address one or more of the Australian Government’s policy outcomes while assisting the grantee achieve its objectives. (CGRGs 2.3)

Grants may include: research grants; grants that provide for the delivery of services; grants that help fund infrastructure; or grants that help build capacity. 

The following considerations may assist when determining if a financial arrangement is more likely to be a grant. These include: 

  • The services, either in whole or in part, would be provided anyway, without a contribution from the Government. 
  • Financial assistance is provided to a target population. 
  • The financial assistance is for the purposes of conducting a pilot, facilitating research or entrepreneurship. 
  • The financial assistance is intended to build capacity or capability in the business or organisation.

There are some financial arrangements that are not grants for the purposes of the CGRGs (see CGRGs 2.6). An example is a financial arrangement by or on behalf of the Commonwealth that is a ‘procurement’. A procurement has its own legislative framework in the Commonwealth Procurement Rules or CPRs.

To help understand whether your agency may be seeking to undertake either a ‘grant’ or a ‘procurement’ a simple guide is below:

Note: Resource Management Guide 411 provides useful information on a range of financial arrangements, including grants and procurement, and may assist further. If in doubt, please consult your agency’s legal area.

Questions to help determine the type of financial arrangement

This tool is a guide to help when determining what type of financial arrangement is being considered. It is recommended that you contact your legal and/or internal grants team on specific advice on what the financial arrangement is.

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