Third Sector Trends study finds continued reliance on grants across the voluntary sector

Voluntary organisations’ working relationship with grant-making trusts and foundations: 2019-2025 (Third Sector Trends in England and Wales, percentage ‘agree’ or ‘strongly agree’ 2019, n=3,958, 2022 n=5,978, 2025, n=8,556)  

This summary draws together insights from the recent Third Sector Trends reports, published by Community Foundation North East and authored by Tony Chapman, Director of Policy & Practice at St Chad’s College and Honorary Professor of Social Policy at Durham University.

The report shows that grants remain the most important source of income for charities. While the figures point to a return to ‘business as usual’  post-Covid, they also highlight an important shift in grant-making practice towards more unrestricted and multi-year funding.

This shift reflects what Community Foundation North East believes is the right direction of travel, although the ‘bounce-back’ in funders wanting organisations to be ‘innovative’ is less positive.

Rob Williamson, Chief Executive Officer of Community Foundation North East, said:

“As a place-based funder supporting hundreds of grass-roots charities we know this can be a distraction for organisations who should be supported to keep doing what they do well – delivering support day-in-day-out for their communities.”

Overall, the study has found a significant level of optimism among charity leaders, with most expecting income to increase in the next two years. Charities appear more positive about potential income growth from relationships with business and with trusts and foundations but expect statutory income to fall.

Whilst a small proportion of organisations are assessed by the report as “struggling” financially, the vast majority are “going along as normal” and even “thriving”. Moreover, the study finds a growing proportion of organisations hold reserves, and fewer are using those reserves to meet core costs than previously. This paints an encouraging picture of a strong and resilient sector well placed to respond to the needs of its communities.

You can read the second report, ‘People, work, ambition and impact’, here.

You can read the third report, ‘Income sources, assets and financial wellbeing, here.