Funders in Flux

Over the last few months, we have seen a spike in the number of funders who have closed their grant programmes due to unprecedented demand and/or to review their strategy.  

The Schroder Charity Trust stopped its funding programme because of “unsustainable” increases in applications. City Bridge Foundation is closing its rolling grants programme at the same time that their £200 million uplift is about to end. Albert Hunt Trust have announced moves to spend less and change their grant criteria. Valencia Communities Fund is closing after 23 years after their corporate backer revoked their financial support. The Henry Smith Charity is closing their Improving Lives and Strengthening Communities grant programme while it conducts a strategic review. The Tudor Trust is winding down its current grant-making strategy to re-evaluate and develop a new one centred around racial, social and economic justice. Lankelly Chase, a 60-year-old funder, is going one step further and closing and redistributing over £100m in assets, citing their inability to reconcile their entanglement with colonial capitalism. £8m of its capital (6% of its endowment) will be given to the Baobab Foundation, an organisation set up in 2021 with a focus on funding Black and global majority communities in the UK. The rest is yet to be decided.  

There are two tendencies at play here. One is that funders are overwhelmed by demand and have to stop their normal processes. The other is more of an existential reckoning: what is the role of funders in maintaining an unequal (racist/sexist) system? And what can be done about it?  

The first tendency – that there is less money to go around and competition gets fiercer – is the inevitable outcome of the decade of austerity that slashed local council budgets and prioritised commissioning as a (so-called) money-saving tool. The social crisis has upped demand for our services and there is nothing extra (supposedly) to go around. Funders have, therefore, become inundated. These pressures are the canary in the coal mine for the future of small charities in the UK. 

The second tendency comes from a place of well-meaning. If we ask decision-makers and purse-holders to take structural power imbalances seriously, then we can’t be surprised when they start rethinking their role and priorities. This is all well and good, but what does this review process look like? Is it transparent? Who are they consulting? How are they making their decisions? Does it reflect grassroots needs? And crucially, will it help the voluntary and community sector financially in the long run? 

Lankelly Chase has made the most radical announcement so far in its announcement that it will dissolve itself and give away its assets. Our worry is that once this money has been redistributed, there is no long-term strategy to develop and maintain a more financially secure and independent charity sector. However, this massive financial giveaway presents a brilliant opportunity to divest power and resources; we hope for more open consultation to harness more radical ideas of how this can be managed in the most innovative and far-reaching ways... 

January 2025