The event is believed to be New Zealand's longest-running festival and this year's will be the 58th.
The committee held a special meeting last week and decided on a new focus for festival proceeds.
Starting with the proceeds from this year's festival, from September 26 to October 11, grants will be available for education in the area of the arts.
Chairwoman Clair Higginson said from the outset in 1957 the festival had been all about raising funds for the local community.
The committee felt it was no longer the festival's place to raise funds for ''big ticket'' items, such as the first target of festival funds in the 1950s, Alexandra's Centennial Pool.
''The community is now blessed with other, far larger funders, to help with such projects,'' she said.
Since the festival came back to ''a sound financial footing'', the committee had focused on using local organisations to provide services so financial benefits could be gained by those groups.
The festival would continue to do that and its financial position had now improved to the extent it could offer grants from the proceeds again.
Ms Higginson said the festival had always had a strong arts base.
Artistic floats were created every year for the procession, and many arts-based supporting events ran alongside the festival, including the Alexandra Musical Society's annual production and the Central Otago Arts Society's festival exhibition.
The WoolOn fashion and design event had also been part of the festival for several years and was an integral part of the programme, she said.
''The committee felt supporting the arts locally provided great synergy ... the special general meeting agreed.''
From this year on, grants from festival funds will be available for educational purposes for artistic endeavours, she said.
People who were based in the Central Otago District Council Vincent ward, who had immediate family living there, or who were educated in the area would be eligible.
The festival was declared technically insolvent after the 2009 event, after three successive years of losses, as it owed creditors more than $80,000.
A public meeting was held to discuss the future of the event and a public appeal was started which netted more than $9000.
As well as the community rallying in support, the Vincent Community Board also offered to bail out the festival, giving a $50,000 grant and a loan to repay the debts.
A successful ''back-to-basics'' festival was staged in 2010, with a trimmed-back budget, and the event made a profit and has continued to make one every year since then.
Blooming finances
Festival year profit/loss
2013 $5925 (profit)
2012 $13,569 (profit)
2011 $27,149 (profit)
2010 $30,000 (profit)
2009 $73,143 (loss)*
2008 $38,325 (loss)
2007 $22,983 (loss)
*owed $81,920 to creditors; declared technically insolvent)
