Grant making trusts and foundations focus too heavily on London and the South East of England over the rest of the UK, according to a new report by the Directory of Social Change.
The research published in a report entitled Sector Insight: Trusts and Foundations 2015, found that total grants from foundations were worth around £3bn a year - a return to pre-recession levels of giving.
The report focuses specifically on the 2,497 UK grant makers who appear in the DSC Directory of Grant-Making Trusts, which are responsible for around £2.65bn, 88 per cent of the overall worth.
It found that approximately £1.88bn worth of grants are made in the UK a year, of which 69 per cent are designated for distribution anywhere within England, Wales, Scotland and Northern Ireland.
But the report finds that of the other 31 per cent, the vast majority of grant money is distributed in England and, more specifically, in and around London.
In the last year, £418m was allocated by trusts and foundations to England while only £80m was given to Scotland, £65m to Wales and £3m to Northern Ireland.
Within that structure, 30 per cent of the total allocation of funds to England is distributed in London (£108m), while a further 13.4 per cent is made in the South East (£47.6m), compared to 7 per cent in the North East (25m) and just 6 per cent in the East Midlands (£21.5m).
Dame Suzi Leather, chair of the Lankelly Chase Foundation, writes in the foreword of the report: "The standout finding here is the mismatch between current spend and deprivation.
"Put simply, trusts and foundations are too London/South-East-centric, with these areas taking a whopping 43 per cent of the total grant money designated for English regions".
As an explanation for this, the DSC suggest that trusts and foundations are more likely to distribute funding to areas of the UK that have a heavy density of registered charities.
Areas like the East Midlands and the North East suffer compared to London due to the comparatively less density of registered charities in the area.
The report shows that another £767m was given to organisations overseas – predominantly in continental Europe and in Africa.
The report also breaks down how the various, sampled grant making trusts say they distribute their funds. Nearly half (48 per cent) of those sampled said they fund general charitable purposes, 38 per cent support social welfare, 34 per cent health, 33 per cent education and training, 27 per cent religion with only a quarter supporting arts, culture and sport.
Tom Traynor, the report’s co-author, writes in the executive summary that while “it is encouraging” to see that trusts and foundations have returned to “pre-recession levels”, the continued “austerity agenda” of the government could yet cause wider problems.
The most recent available metrics show that grant making from trusts has returned to pre-recession levels of £3bn, having fallen in the year 2007/08 to £2.7bn and in 2008/09 to around £2.51bn.
“It is encouraging to see that despite the financial crisis and recent recession, grant-making trusts and foundations have remained fairly resilient in the face of adversity.
“What does seem likely is further imminent cuts to statutory funding for the voluntary and community sector, and the potential increase in demand for grants that will generate will create additional pressure on trusts and foundations.
“The prevailing austerity agenda may create a ‘perfect storm’ that will strain their resources and perhaps force them to re-evaluate their strategic priorities and how they support their beneficiaries in the future.”