Grant agreements: what the funding conditions really require.

This article is for informational purposes and general commentary only. It does not constitute legal advice and does not create a solicitor-client relationship.

A grant agreement is the contract between a funding body and a recipient that sets out what the money can be used for and what the recipient must do in return. Arts funding in Australia comes from bodies such as Creative Australia, the federal arts funding and advisory body formerly known as the Australia Council for the Arts, along with state and territory arts agencies and local councils. Whatever the source, the agreement is binding, and the conditions matter as much as the amount.

The most common problem is treating the grant as a gift and reading the agreement only when something goes wrong. The conditions govern how you spend the money, what you must deliver, how you report, what happens to unspent funds, and how you must acknowledge the funder. Understanding them before you accept protects both the project and your standing for future funding.

Permitted use of funds

A grant is almost always tied to a specific project and budget. Spending outside the approved purpose, or shifting money between budget lines without approval, can breach the agreement. If the project changes, seek a variation in writing rather than quietly redirecting funds.

Milestones, deliverables and reporting

Funding is often released against milestones, and payment of later instalments can depend on meeting earlier ones and reporting on progress. Read what you must deliver, and when, and diarise the reporting dates. Missing a report is a breach even where the artistic work is going well.

Acquittal and unspent funds

At the end, most grants require an acquittal: a report, usually with financial statements, showing the money was spent on the approved purpose. Many agreements require unspent funds to be returned, and some allow the funder to recover, or claw back, funds that were misspent or not acquitted. Keep clean financial records from day one, because the acquittal depends on them.

Acknowledgement and publicity

Funders usually require acknowledgement, such as their logo on marketing and a set form of words in programs and media. These clauses are conditions, not suggestions. Failing to acknowledge the funder correctly can breach the agreement, and it can also harm your relationship with a body you may want to apply to again.

Intellectual property

Read the intellectual property clause. Many arts grants let the recipient keep ownership of the work they create, while granting the funder a licence to use material about the project for promotion and reporting. Some agreements go further. Know what rights you are giving away, and make sure the grant terms fit any separate arrangements with collaborators, commissioned artists or a co-producer.

Insurance, work health and safety, and other obligations

Agreements often require the recipient to hold insurance, comply with work health and safety and child-safety obligations, and meet other standards during the funded project. These are enforceable terms. Build the cost and the compliance work into the project budget and plan, not as an afterthought.

Variation, termination and audit

Look for how the agreement can be varied, when the funder can terminate or suspend funding, and whether the funder can audit your records. A funder can often terminate for breach or if the project cannot proceed, and may require repayment. If circumstances change, the safest course is to talk to the funder early and agree a written variation rather than risk a breach.

GST, auspicing and structure

Grants can have GST consequences depending on what the recipient does in return, so check the treatment with your accountant. Unincorporated groups sometimes receive funding through an auspicing arrangement, where an incorporated organisation holds and administers the grant on the group's behalf under its own agreement. That adds a second layer of obligations worth understanding before you sign.

Frequently asked.

Is a grant a contract?

Yes. A grant agreement is a binding contract that sets out what the money can be used for and what the recipient must do, including reporting, acquittal and acknowledgement.

What happens to unspent grant money?

Many agreements require unspent funds to be returned, and some allow the funder to recover misspent or unacquitted funds. Check the specific terms and keep clean financial records.

Do I keep the copyright in work funded by a grant?

Often yes, with the funder taking a licence to use project material for promotion and reporting. Read the intellectual property clause, as some agreements go further.

What is an acquittal?

A final report, usually with financial statements, showing the grant was spent on the approved purpose. Payment of some funding and eligibility for future grants can depend on it.

What if my project changes after I get the grant?

Seek a written variation from the funder rather than redirecting funds yourself. Spending outside the approved purpose can breach the agreement.

If you are a performer, producer, venue, or independent practitioner and this raises a question about your own situation, Aaron Kernaghan and the team at Brady & Associates Lawyers can give you tailored guidance. Call 0421 717 019 or contact the firm.

This article is for informational purposes and general commentary only. It does not constitute legal advice and does not create a solicitor-client relationship. It reflects the law in Australia as at 13 September 2026, with a focus on Commonwealth law and New South Wales and ACT practice. The law changes and applies differently to every set of facts. Written by Aaron Kernaghan, Brady & Associates Lawyers.

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