A few months ago we published a blog on how the charity grant funding market is responding to Covid-19, in response to what has been an intense year for grant fundraisers, largely as a result of frequent changes in the approaches taken by grant makers. Another of our previous blogs, Fundraising in the new normal outlined some early thinking on likely trends in fundraising arising from the pandemic.

Earlier this week the Association of Charitable Foundations published a report based on a survey of its members, which reveals some interesting insights into how grant making is likely to change in the short and medium term.

The headline findings are:

• 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 overhauls to how they assess applicants.

• 9 out of 10 expect to maintain or increase grant funding for civil society in 2021 – 45% plan to maintain their 2020 level of grant spending in 2021 and 41% plan to increase it, but many of these plans were uncertain in the longer term.

• Many foundations plan to maintain or return to their usual funding programmes or areas of focus in 2021, but apply a ‘coronavirus lens’ to their work or offer additional support particular groups that have been most affected.

• Nearly half are planning to establish a new fund or re-align grant programmes in 2021 to focus on direct support for people or sectors most affected by coronavirus.

• Many expect a negative impact on their own finances (40%) and predict financial turbulence.

• More than 8 out of 10 stated an ongoing commitment to increased flexibility for grantees and reduced administration for funding applicants, with some stating this will remain a permanent feature of their practice.

• 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.

• Two-thirds of foundations intend to collaborate with other funders in 2021, such as to align strategies, pool funds and share information. Central to the responses was evidence of foundations striving to align strategies, pool funds and share information.

• 70% of foundations reported the same or more demand on their resources at the start of 2021 as in the aftermath of the first lockdown a year ago. 30% of foundations, however, reported a fall in demand compared to the first lockdown, particularly in terms of emergency health response funding. 

There is some encouraging news here about continued levels of funding in the short to medium term, but the long term remains uncertain. With many foundations having invested their endowments in commercial property, the impacts of the pandemic are likely to be severe for the long term value of those investments and hence availability of funding in the long term. 40% of foundations forecast that their finances will be negatively impacted by the pandemic, although half predict no change. 

Another interesting finding from the survey is that foundations identified a huge range of charitable sectors likely to be in most need of funding, with culture, health, education, employment and training, and housing the most commonly chosen. Several foundations reported plans or actions to create specific funding programmes or ring-fenced funding for Black, Asian and Minority Ethnic-led organisations and communities, potentially accelerating the trend in this direction in recent months. 

The situation, therefore, remains volatile and uncertain but there are some important clues in this survey about what the future of grant funding might hold.

If you would like to explore how we can help your charity with its grant fundraising, please contact us at julian@almondtreeconsulting.co.uk.