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Most foundations expect to maintain or increase grants in 2021, survey finds

13 Apr 2021 News

Nine out of 10 foundations expect to maintain or increase grant funding for charities in 2021, despite many predicting financial turbulence, according to new research.

Today The Association of Charitable Foundations (ACF) published Rising To The Challenge Charitable Foundations’ Responses To Coronavirus And Their Forecast For The Future. It is based on a survey of its members about the impact of coronavirus was on their work in 2020, and what their forecast was for 2021. 

Eighty foundations responded, with representation from small, medium and large grantmaking charities. 

The research found that although 86% are planning to maintain or increase spending, many foundations are also reporting strains on their staff and systems. Indeed 40% are expecting a negative impact on their own finances. 

The largest foundations, giving more than £5m per year, expect to be the most affected, with half forecasting a negative impact on their finances. 

A quarter of the largest funders anticipate that their grant budgets could decrease, but a third predict an increase.  

Small funders were the most likely to predict no impact from the pandemic on either their finances or their grants budgets, at 75%. 

Increased funding and closer collaboration 

Nearly all respondents, 96%, said they changed their work in 2020 in response to the coronavirus pandemic, including new grant programmes, increased funding, closer collaboration with other funders and changes to how they assess applicants. 

Some foundations reported that they are planning to apply a “coronavirus lens” to their work or offer additional support to particular groups that have been most affected. 

For example, one said: “We are looking to support more BAME partnerships based on the impacts of Covid and the Black Lives Matter campaign.”

Half plan to create or renew coronavirus-specific funding programmes this year, while more than eight out of 10 stated an ongoing commitment to increased flexibility for grantees and reduced administration for funding applicants. 

Two-thirds say they will work differently in 2021 because of the ongoing impact of the pandemic, with nearly half of this group intending to do so throughout the year, and the same number saying they thought this would extend beyond 2021. 

'There are real risks for many as government support schemes wind down'

Carol Mack, chief executive at ACF, said: “I’m proud of how foundations have stepped up and continue to do so. I also want to acknowledge the immense effort of staff and trustees, who have worked intensively and with enormous dedication, aiming to ensure their foundation’s resources achieve maximum benefit in these difficult times. 

“I’m mindful of the scale of the challenges that society faces. Funding remains very tight for charities and there are real risks for many as government support schemes wind down. Foundations will continue to play their part but the government needs to keep under review the need for wider support.”

Max Rutherford, ACF’s head of policy and author of the report, 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.”

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