Last month, we reached out to our members to understand the growing demand for grants. Through a short survey, we collected valuable insights into the challenges funders are facing in keeping up with high volumes of applications. We received 42 responses, and the survey confirmed what many in the sector have been observing: demand for funding is rising, but resources are not keeping pace. Stagnant funding pots and the impact of inflation are stretching existing grant programmes. While the results can’t represent every funder and every sector, they add more detail to the overall picture and help understand where further steps could be taken to bring change into the funding process.
Our survey revealed some striking trends:
- Most respondents reported a 10-25% increase in funding requests, with some experiencing the highest application volumes seen in four to five years.
- Funders also noted a growing trend: grantees are seeking larger grants to cope with rising costs.
- Most funders reported adopting restrictive strategies in response to demand.
- Funding pots have stagnated: Compared to the 2023-24 financial year, fewer funders have increased their total funding pot for 2024-25. Most respondents reported no change in the total funding available for grants, whereas last year, many funders reported increasing their funding capacity.
- Most funders reported an increase in their fund/endowment value over the five-year period to 2023
We have exhausted current efficiencies in operations. Demand is historically high. We need much greater coordination as a sector
Survey respondent
Spillover effects and need for collaboration
In both our survey and Insight meeting earlier this week, funders shared some of the steps they are taking to respond to demand: many are streamlining processes to reduce the time spent on applications. Using different digital tools, introducing tighter eligibility screening, simplifying guidelines and making use of EIO are some of the methods shared.
But the data also shows that to manage rising demand, many funders have adopted restrictive strategies – such as tightening criteria or geographic focus. However, this approach appears to have unintended consequences: the increased demand for some grants was often attributed to other funders’ restrictions, creating a spillover effect.
Rather than simply shifting demand between funders, there is a clear need for greater collaboration and communication to find sustainable solutions that address the root causes of rising demand. KPMG’s report on disruptive philanthropy further highlights the power of collaboration. At a time when the sector is seeing rising demand and stagnation of funding pots, collaboration could be a key to funding in a sustainable manner.
Is grantmaking keeping pace with endowment growth?
While funders reported an increase in the total amount available for grants last year, most indicated no further changes this year. This suggests that available funding has plateaued after the post-Covid uptick, even as societal challenges continue to intensify.
Interestingly, many funders noted a rise in their endowment values over the past five years. According to an ACF report, endowments experienced significant growth following Covid, driven by favourable market conditions. However, this growth hasn’t translated into sustained increases in grant-making. Data from 360Giving shows a decline in both the number and value of grants distributed between 2019 and 2024.
As a community of funders, we are all mindful of the need for funding to keep up with the evolving needs of communities. In our December Insight meeting, we talked about the wider system of statutory and independent funding and how the reduction in many local authority budgets has impacted funding elsewhere – not just as a result of their reduced grants budgets but the erosion of contracts which leaves organisations with gaps to plug, leaving them with little resource or time to imagine and fight for a better alternative for the communities they support.
There continues to be a huge appetite among our members to work together, try new ways of investing and shifting practice to ensure funded partners can thrive and not just survive. As we look to 2025, we look forward to carrying on this conversation and accelerating our collective efforts to do this.
To read more about our survey results, download our slide pack here.