When local organisations raised concerns with SociaLink about changes to the Lotteries funding process, we took action to understand the impact and advocate for the sector.
Responding to funding eligibility problems
Following changes to the Lottery funding system, the Department of Internal Affairs (DIA) confirmed that almost 200 community groups had been incorrectly declared ineligible during a recent funding round. DIA apologised, updated its guidance and confirmed that organisations previously eligible for Lottery funding remained eligible.
SociaLink shared this information with local organisations, encouraged those affected to reapply before the funding round closed, and asked organisations to complete a short survey so we could understand the local impact and advocate on their behalf.
We heard from organisations experiencing other difficulties with the new process. Some had applications declined because they had applied to the wrong fund, despite following DIA’s guidance, and were directed to submit a new application. This created additional work for organisations that were already stretched.
Taking members’ concerns to DIA
Using feedback from local for-purpose organisations, SociaLink wrote to DIA’s General Manager of Community Operations on 9 October 2026.
Our letter raised concerns about funding limits for groups using fundholders, unclear guidance about which fund to apply to, the information requested in applications, difficulties contacting Lotteries and the additional workload created by more frequent funding rounds.
We also called for the proposed restructure to be paused and emphasised the importance of Community Advisors’ local knowledge, community relationships and role in supporting organisations.
SociaLink's letter to DIA
9 October 2026
Tēnā koe Aiolupotea
SociaLink – Tūhono Pāpori is the umbrella peak body for the social and community sector and represents over 1800 organisations and individuals working in the Western Bay of Plenty.
We would like to express concerns, based on feedback from for-purpose organisations, about the changes to the Lottery funding process, as well as concerns we hold regarding the restructuring process.
Changes to funding processes
A big concern has been restricting the amount to up to $10,000 for groups using a fundholder. Encouraging organisations to use fundholders incentivised groups to not establish charitable trusts or incorporated societies just in order to receive funds.
By restricting the amount of funding that groups can apply for is likely to result in the establishment of more charities and incorporated societies and subsequent increased competition for funding and volunteers. SociaLink asks that the amount a group applies for is not restricted if they use a fundholder or that the maximum amount is increased to more accurately reflect the level of funds requested prior to the recent changes.
The flow chart provided to guide organisations to determine the most appropriate fund for them has proved to not clarify the most suitable funding options for some organisations. For example, two environmental groups applied to the Community Support Services fund as their work was not a one-off event, activity or programme nor did they have a start and end date. Both groups were declined and advised to apply for the Community Projects fund demonstrating that the flow chart did not direct them to the correct fund and resulted in the two groups having to make another application, time they could ill afford.
We ask that clearer and more detailed information is provided about the funds to apply to and that there is a process for applicants to seek a review where they believe their appliction has been incorrectly categorised or assessed.
For organisations that have established histories of Lottery funding please advise how they will be treated under the revised policy and whether there are transitional arrangements for organisations affected by the changes.
The level of detail requested in the funding application has reduced significantly, so much so that we are aware of a number of groups who uploaded supplementary information to provide the assessor with a clearer view of their organisation and what they do. We know of several instances where the assesor has contacted the organisation to ask for additional information which was not asked for in the application but was included in the uploaded information. If more detail is needed to be able to assess the application, we recommend it is requested in the application.
Many organisations contacted SociaLink when unable to get through to Lotteries by phone and where emails were not responded to. We understand the system and processes have been overwhelmed during the last two funding rounds, which in and of itself is a very good reason to pause the restructure.
We would also like to note that by now offering multiple opportunities to apply for funding is creating more work for organisations that are already stretched to capacity to apply as well as more work for DIA assessors to process.
Restructure proposal
Given the issues in rolling out the changes to the funding application processes, it would appear a very unwise time to initiate a restructure process and ask that the process be paused.
Understanding communities and their local community groups is fundamental to delivering improved community outcomes. Local ‘in place’ community engagement is vital to support community groups to navigate funding, build organisational capability, connect groups with each other and collaborate with other funders to invest in communities.
We ask that the for-purpose sector and other funders that invest in communities are engaged with in relation to the restructure proposal, that Community Advisors remain in communities and that they continue to focus on community engagement, not just be funding administrators.
It is disappointing that since 1 July 2026 that Advisors working with groups and understand them best, are no longer able to contribute to the groups assessment process due to concerns about conflict of interest. This results in loss of crucial knowledge about the organisations they are working with and is likely to result in flawed decisions, in turn weakening community outcomes. It is asked that a process is found to address perceived conflicts of interest that also allows for a community advisor’s knowledge to be able to contribute to the application assessment process.
Yours sincerely
Liz Davies
Chief Executive
SociaLink
DIA responded on 19 October, acknowledging the concerns and outlining work to review funding guidance, application requirements and applicant support. DIA also confirmed that feedback on the proposed restructure would be considered before decisions were made.
DIA's response to SociaLink
Monday, 19 October 2026
Tēnā koe Liz,
Thank you for your correspondence of 9 October, sharing your views on the importance of the Community Advisor roles.
Changes to funding processes
We acknowledge the concerns you have raised about the recent changes to Lottery funding processes and the effect these may have on community organisations. The changes are intended to make funding more accessible, provide more frequent opportunities to apply, and support consistent and transparent decision-making. We recognise, however, that some aspects of the new approach may require refinement as applicants and staff gain experience with it.
The $10,000 limit for applications made through a fundholder was introduced to balance access for groups without their own legal entity against the need for proportionate assurance and clear accountability for public funding. We will monitor how this setting operates in practice, including whether it creates unintended barriers or incentives, and will take the feedback about the level of the limit into account in future review work.
We are also reviewing the guidance that helps organisations identify the most appropriate fund. The examples you have provided are useful and will inform improvements to the flow chart and supporting information. Where an application appears better suited to another fund, we will continue to consider how applicants can be given clear, timely advice and avoid unnecessary duplication. Funding decisions remain subject to the relevant committee’s decision-making process, and applicants can seek clarification about a decision or raise concerns where they believe the process has not been correctly applied.
Organisations with a history of Lottery funding are able to apply under the revised framework, but previous funding does not guarantee future funding. Applications are considered against the current fund purpose, eligibility requirements, available funding and the relative merits of other applications. We recognise that changes can affect established organisations, and clearer information about the revised settings and any relevant transitional arrangements will be provided where appropriate.
The streamlined application form was designed to reduce the burden on applicants while still gathering the information needed for assessment. We acknowledge that assessors have sometimes needed to request further information. We will use this experience to review whether the form and guidance strike the right balance and to make the information requirements clearer.
We regret that some organisations have experienced delays reaching us by telephone or receiving an email response during recent funding rounds. Demand has been high while the new processes have been implemented. Work is under way to improve response times, strengthen applicant support and ensure that service pressures are identified and managed. The move to more frequent funding opportunities is intended to give organisations greater flexibility about when to apply; we will also monitor the workload implications for applicants, staff and committees. We are making improvements to our Community Matters website, and encourage you to continue to contact us via email at communitymatters@dia.govt.nz or by calling 0800 824 824.
DIA recently initiated a programme of work to ensure Community Operations Hāpai Hapori remains trusted, effective, and capable of delivering high-quality services and outcomes for communities, now and into the future.
Within this programme, a consultation process with Community Operations Hāpai Hapori has commenced proposing changes to our structure and roles. These changes are focused on opportunities to strengthen Community Operations systems, processes, controls, and ways of working.
Community Advisors deliver a community focused service that supports access to information, advice and funding. The current proposal does not change the following current ways of working, including:
- having on-the-ground Hapai Hapori Community Advisors working across the country supporting community organisations to access funding; and
- allowance for Community Advisors to work remotely, in accordance with DIA’s flexible working guidelines.
All feedback from DIA staff on the proposed changes will be carefully considered before decisions are made.
Thank you again for your letter and for sharing your experiences and concerns.
Ngā mihi
Aiolupotea
Aiolupotea Sina Aiono (she/her) I General Manager
Community Operations I Hāpai Hapori
Partnerships & Commissions I Te Aukaha
SociaLink has advised DIA that we, with support from the local community sector, would be happy to contribute to review discussions. We are also part of a national Constellation group, supported by HuiE!, engaging with DIA about the funding changes and proposed restructure.
Why this matters
SociaLink advocates for the needs and experiences of the Western Bay of Plenty’s community sector. By listening to our members, gathering evidence and bringing their concerns directly to decision-makers, we help ensure the sector’s experiences inform decisions that affect its work and the communities it serves.
