Grantmaking by largest foundations rose by 13% during pandemic, ACF reports

25 May 2023 News

Grantmaking by the UK’s largest foundations rose by 13% in 2020-21 despite their incomes reducing, according to new research.

The Foundation Giving Trends 2022 report, released today by the Association of Charitable Foundations (ACF), shows that the country’s 300 largest grantmakers distributed grants worth £3.7bn that year compared with £3.3bn in 2019-20.

The rise is despite foundations’ total income falling by 10% in 2020-21, partly due to the impact of the pandemic, the report says.

The 13% increase in grants in 2020-21 compares to a 5.7% average annual growth of grantmaking recorded over five years.

Record £3.7bn distributed

This year’s report shows that the 300 biggest foundations continued to focus their responses on coronavirus, while tackling its impact on communities experiencing racial inequity.

Of the £3.7bn they gave out in 2020-21, at least £276m was distributed to combat Covid-19, excluding government grants and co-funding. This compares with £155m the previous year.

Family and personal foundations gave out £2bn, an 11% increase on the previous year, while corporate foundations gave out a record £239m, a 17% rise.  

Total spending was up 8% to £5bn, driven by the growth in grantmaking, while total income declined by 10% in real terms to £4bn. 

The report notes that more foundations were embracing total-return approaches, which “limit the value of reported annual income as an indicator of their total financial capacity”.   

Foundations’ total assets were 19% greater in 2020-21, reaching a new high of £87.3bn “amid major market volatility”, the report says. 

Wellcome gave out the most money in 2020-21, with its grant total increasing by £111m to £793.7m. It was followed by the Children’s Investment Fund Foundation (£245m), Leverhulme Trust (£135.8m) and Garfield Weston Foundation (£96.7m)

Foundations ‘stepped up’ during Covid-19

ACF chief executive Carol Mack said: “This year’s research shows how foundations stepped up during the Covid-19 pandemic. They increased their spend on grant-making - making over £430m in covid-related grants to charities from 2019-21. 

“Simultaneously foundations responded by adapting their grant-making practices; collaborating with other funders, pooling funds and flexing their grant-making, all while keeping their own costs stable.” 

The report looked at data for financial years ending in the 12 months to April 2021 from 300 independent philanthropically-funded charitable foundations listed by levels of grant-making.

It was carried out by Cat Walker of the Researchery and supported by Pears Foundation.

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