The community-driven Hawke's Bay Foundation has made the first allocation from its invested funds.
Foundation chair Rebecca Turner said the allocation would have positive effects in the community.
"It is wonderful to have been able to do this - we are on a roll now," she said as the foundation reflected on its inaugural funding for the Unlicensed Driver Education Programme, set up and facilitated by the Howard League for Penal Reform.
It was something which would benefit communities - which was what the foundation was about - and formed part of the Howard League's Literacy Programme at the Hawke's Bay Regional Prison.
"What we want to do here is support this programme and get to them before they get to prison."
Ms Turner said many young men were finding themselves in a situation they did not want to be in simply because they could not get a licence due to not being able to read.
Many were finding themselves in prison due to not possessing a drivers licence - and after three offences that meant a stint behind bars.
She said re-offending figures in New Zealand were high and the Howard League the foundation's determination was to "keep them out of there".
The foundation had long helped many local charities and groups through its role as regional funding manager for the Tindall Foundation, but the criteria in the role did not allow them to fund activities such as the Unlicensed Driver Education Programme.
Through the Tindall funding, the foundation had supported a string of organisations such as the foodbanks, Age Concern, Birthright, youth and parental services, Women's Refuge and community patrols - to the tune of $327,000.
Having now created its own stand-alone fund through Hawke's Bay community's donations and bequests, meant the foundation could step up and support such programmes.
Ms Turner described it as a turning point for the organisation which is comprised of voluntary trustees and support staff.
"It marks the beginning of a permanent source of funding to support local charities."
Howard League chief executive officer Mike Williams said literacy was one key to helping young people remain crime free, and that giving prisoners that key would result in a fall in re-offending.
He said released prisoners returned to a situation where they had a much better chance of finding employment.
Mr Williams said the funding support of the Hawke's Bay Foundation and the Eastern and Central Trust was valuable in operating the programme.
It had received the blessing and support of the Corrections Department, police, Napier parole officials and the judiciary.
The funding would go into assessment and course materials and on fees for driver licence testing.
Co-ordinator of the literacy programme at the Hawke's Bay Prison, Anne Brown, said offenders were referred to her by probation staff and she worked to identify possible barriers to those referred getting a learner licence.
Literacy testing was one aspect.
She said literacy teaching could be embedded into a six-week programme which covered the content of the New Zealand Road Code in ways that are suited to the individual learner.
Other identified barriers had been funding for the tests and the availability of a computer to practice them.
"Support from the Hawke's Bay Foundation will be crucial to getting offenders fully licensed, Ms Brown said.
The power of the literacy programme was illustrated at the ninth graduation event staged at the prison last week, Ms Turner said.
"We cried - it was remarkable," she said of one young man's speech where he paid tribute to the support of his partner in pursuing his goal.
"It was beautiful - one of the most heart-moving things I've heard - about just how wonderful this woman had been for him."
Ms Turner said the foundation had about $1.3 million of funds invested, and that based on its growth predictions expects distributions to grow from $50,000 annually to in excess of $500,000 over the next 10 years.
No decision had been made at this stage on future recipients, although the foundation was in a position to accept applications from an expanded range of causes.
"The foundation will have a secure source of income to make grants each year within the community, with the amount continually increasing as more donations join the investment pool," she said.
"Most significant, though, is the fact that at that 10-year mark the very first dollar ever donated to the foundation will still be intact and continuing to benefit the community - every year, forever."
Ms Turner said one of the people who inspired her and other foundation members, Canadian Faye Wightman, would be arriving in the Bay in two weeks for a speaking engagement.
Mrs Wightman was president and CEO of the successful and acclaimed Vancouver Foundation for eight years.