9 out of 10 Foundations to Maintain or Increase Grant Funding for 2021

New report finds nine out of 10 foundations expect to maintain or increase grant funding for charities in 2021.

A report published today (13 April) by the Association of Charitable Foundations (ACF) finds that nearly 9 out of 10 foundations plan to either maintain grant spending or increase it in 2021, with only a few proposing to decrease funding.

In March 2021, the ACF surveyed its members to understand what the impact of coronavirus was in their work in 2020, and what their forecast was for 2021. Responses were received from 80 charitable foundations across the UK, with representation from small, medium and large grant-making charities.

Key findings of the report include:

  • Nearly all (96%) of respondents adapted to the coronavirus pandemic – including new grant programmes, increased funding, closer collaboration with other funders and remodelled assessments of applicants.
  • Nearly half (45%) plan to maintain their 2020 level of grant spending in 2021 and 41% plan to increase it.
  • 70% of foundations report the same or more demand on their resources at the start of 2021 as after the first lockdown a year ago.
  • Nearly half are planning to establish a new fund or re-align grant programmes in 2021 to focus on direct support for people or sectors most affected by coronavirus.
  • 84% said that they would continue to offer the flexibilities around reporting and payments that they introduced in 2020, with some stating this will remain a permanent feature of their practice.
  • Two thirds say they will work differently in 2021 because of the ongoing impact of the pandemic, with nearly half of this group saying they thought this would extend beyond 2021.

ACF’s Head of Policy and author of the report, Max Rutherford, said:

“In 2020, foundations across the UK stepped up to meet the hugely increased need of the communities and causes they care about. We now know this support is likely to continue in 2021, with funding levels to be maintained or increased in nearly all cases. We also welcome the finding that many of the positive changes to funder processes – such as increased flexibility for grantees and reduced administration for applicants – are set to be embedded beyond the emergency response”.

The report also highlights the financial impact on funders, with 40% of foundations forecasting that their finances will be negatively impacted by the pandemic, although half predict no change. The largest foundations giving more than £5m per year expect to be the most affected. Yet, despite this reported impact to finances, most grant-making foundations still maintain a commitment to their funding programmes and are remaining flexible to meet the changing needs of the sector.

The full report, Rising to the Challenge Charitable Foundations’ Responses to Coronavirus and their Forecast for the Future can be found here.