Funding from UK grantmakers to good causes has risen by 4% year-on-year to more than £24bn, marginally outpacing inflation, according to new research.
Based on data from more than 14,000 funders, the latest annual UKGrantmaking publication says that funding from trusts and foundations grew by 1% to £8.42m in 2024-25, making up the largest portion of the grants made.
Government grants were the second most significant source of funding, rising by 3% to £6.93m, according to the research published today.
Grantmaking by donor-advised funds (DAFs) increased by 8% year-on-year to £2.4bn, which is 29% higher than 2022-23 levels.
Meanwhile, National Lottery distributors gave out £2.57m, a 1% increase on the year before.
Most grantmakers distributed under £1m in total in 2024-25, while endowments have remained relatively flat since 2021, the research says, representing a decline in real terms.
Some 18% of grants to local or regional organisations were awarded to those based in the most deprived areas, compared to 4% in the least deprived areas.
Meanwhile, based on available data from 340 funders, the average grant size increased by 49% to £19,635 in 2024-25, driven by the National Lottery Community Fund (NLCF) doubling the maximum amount of funding it offers to smaller charities.
Catherine Seymour, director of policy and programmes at the Association of Charitable Foundations (ACF), said the rise in grant spending by foundations was a “testament to […] sustained commitment through some of the most challenging years in recent memory”.
“Yet we know that even as spending has grown, many grantseekers haven’t felt it,” she said.
“That isn’t a contradiction – it reflects the scale of unmet need, the reduction in government grant funding, and the pressures charities are navigating.
“Foundations are making intentional, long-term decisions about how to sustain their giving and that matters – because foundation funding represents one third of all grants awarded in the UK.”
UKGrantmaking is published by Funders Together and brings together 360Giving, ACF, the Association of Charitable Organisations, UK Community Foundations, Pears Foundation and London Funders.
NLCF funded 13,000 projects
Separately, NLCF has today published its impact report for 2024-25, in which £791m was awarded to over 13,000 community projects.
Some 51% of the funding went to the top 30% most deprived areas of the UK, NLCF reported.
In addition, NLCF’s survey of grant recipients whose funded work ended in 2024-25 found that they collectively supported 6.8 million people across the life of the projects.
NLCF chief executive David Knott said: “If we want a healthier, fairer and more resilient future, communities need stronger long-term backing.
“That means funding but it also means a different relationship between institutions and the people and places they serve, one built on trust, patience and local knowledge.”
Knott added: “We will remain absolutely committed to grassroots funding, while also stepping up to make bigger, bolder and longer-term commitments that help communities lead the change they know is needed.”
