Grant funding for the voluntary and community sector from central government fell by 26% last year, according to a new dataset.
According to data from 360Giving’s new UKGrantmaking data platform, central government distributed £3.03bn to the sector from April 2022 to March 2023 compared to £4.12bn the previous financial year.
It calculated this as a 33% decrease in real terms, when taking account of inflation according to the Consumer Price Index.
360Giving chief executive Tania Cohen said the fall in government funding is likely because the previous year was “artificially inflated” due to emergency funding provided to the sector during the Covid-19 pandemic.
Departments cut funding
According to the data, the Department for Education distributed the most in grants to the voluntary sector in 2022-23 with £655m.
Grant funding from the Department for Levelling Up, Housing and Communities dropped by 43% to £634m in 2022-23, 43% less than the £1.1bn it gave in 2021-22.
The Department for Culture, Media and Sport gave £415m in grants in 2022-23, a 23% increase from £336m the previous year.
Meanwhile, the Department for International Trade distributed 79% less in funds in 2022-23 than the previous year, down from £2.7m to £600,000.
National Lottery distributor funding falls by 13%
Elsewhere, National Lottery distributors reduced their grantmaking overall by 13% in 2022-23, down from £2.70bn to £2.36bn.
A significant contributor to this was the decrease in grantmaking by Sport England of over £420m between the financial years.
Sport Northern Ireland's funding also dropped by 61%, from £7.69m to £2.98m in 2022-23.
Meanwhile, both the Arts Council of England and National Lottery Community Fund’s grantmaking increased by 4%.
Money from largest grantmakers declines
Overall, the data shows that 13,000 UK grantmakers distributed over £20bn in grants during 2022-23.
It found that the vast majority of grantmakers distributed under £1m in grants per year.
Most of the grants awarded were small, with funding of under £10,000 for a year or less being the most common.
It found that total grantmaking of the 100 largest family foundations decreased by less than 1%, but this was a 9% decline in real terms when adjusted for inflation.
Some 30 of the largest family foundations decreased their funding, four of which did so by over £10m. These were the Leverhulme Trust, Esmee Fairbairn Foundation, Rhodes Trust and Arcadia.
Meanwhile, 69 of the largest family foundations increased their funding during the year, including the Gatsby Charitable Foundation and seven others which did so by £10m each.
At the same time, the largest 300 foundations overall increased their grantmaking by 14% during this period.
‘Enhancing openess and transparency’
The new dataset was collated from charity regulators, funder accounts and data published from the 360Giving Standard.
It was created in collaboration with the Association of Charitable Foundations (ACF), the Association of Charitable Organisations, UK Community Foundations and London Funders, with support from CCLA and the Pears Foundation.
Cohen said: “I’m pleased that we have been able to bring partners together for this collaborative project to help us to better understand grantmaking in the UK - and we’re excited to build on it in the years ahead.
“We’re proud that everyone can access this valuable data in one place for free, and that it is openly available for people to use for their own purposes.
“Sharing data in this way will make it easier for everyone to understand, collaborate, and support grantmaking to become more informed, effective and strategic”.
Carol Mack, chief executive of ACF, said: “This innovative tool represents a significant step forward in enhancing openness and transparency across the entire grantmaking community.
“The platform provides comprehensive access to a wide array of data related to grantmakers and grantmaking.
“This will enable foundations and the wider sector to make more informed decisions, enhance their learning and impact, and — through greater transparency – will make visible fresh possibilities for collaboration.”
