Grant givers already ‘facing major funding challenges’ pre-pandemic, report reveals

Charitable foundations were already beginning to face major funding challenges to meet increasing demand for support, in the year before the Covid-19 health crisis.

The warning has been revealed in latest figures from the Association of Charitable Foundations (ACF) in its Foundation Giving Trends Update 2020 report.

This found that grant making in 2018/19 grew by 5.7%. But this was on the back of “very low (near zero) growth in assets, mainly due to low growth in the value of investments”.

While the net assets of the top 300 charitable foundations reached a record £70.3bn in 2018/19, the annual rate of growth remained the same as the previous year at 0.8%.

In addition, investment income growth was negative for the second year in a row.

Uncertainty around Brexit, as well as US and China trade disputes, are among factors in the slowdown in the value of foundations’ investments.

Climate change

The ACF’s latest update also found a renewed focus on climate change among foundations pre-pandemic.

The Esmee Fairbairn Foundation said “the realities of climate change became unavoidable, and the foundation sector is now engaging with it in a way it as not done so before”.

The foundation is one of 14 grant givers to sign the Funder Commitment on Climate Change, where they pledge to consider how their investments and operations contribute to a “post carbon society”.

A full report on giving trends by charitable foundations will be published by the ACF later this year.

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