ACF Foundation giving in 2024-25: what the numbers tell us
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The Association of Charitable Foundations (ACF) is one of the UKGrantmaking partners. Here, Catherine Seymour, Director of Policy and Programmes at ACF, shares her insights about what this year’s edition tells us about grantmaking from foundations across the UK
One of the things that sets foundations apart from other funders is their independence. They can move quickly, take risks and adjust their spending and investments to meet challenges and opportunities. UKGrantmaking (and before that the Foundation Giving Trends series) enables us to track these changes in grant spending. Over the last few years we can see there have been a lot of adjustments.
Through Covid, the cost of living crisis and rising global instability, we’ve seen foundation grant spending rise significantly in response. In 2020-21 total grant spending across UK foundations increased by 13% above inflation. This exceptional increase was not just sustained but grew by a further 13% and 12% (10% and 6% above inflation) respectively in the two subsequent years.
That context matters for understanding what happened next and what the most recent UKGrantmaking data shows us.
What the 2024-25 data shows
Last year’s figures tell a different story. Foundation grant spending continued to rise in cash terms, growing to £8.4 billion – but for the first time in many years, it didn’t keep pace with inflation, meaning a real terms decrease.
Before we go further, let’s look at one foundation in particular: Wellcome Trust is the UK’s largest charitable funder and their scale of spending is significant enough to shift the overall picture. Wellcome spent less in 2024-25 than the year before – and that has a measurable effect on the aggregate data. We’ll come back to this later.
Why has spending levelled off?
A few things help explain it.
Previous rises in recent years were exceptional. Foundations responded to an extraordinary period – the pandemic, economic shock, ongoing reductions in government grant funding. That response was much-needed but it could never be permanent.
Foundations can’t sustain exceptional spending indefinitely. Some of our members have told us directly that in this period they were “spending above sustainable levels”. Foundations face an important tension here: in a period of crisis, the instinct can be to give more, for some it may even be a prompt to consider spending down. But others take the opposite view – that protecting the endowment now means being able to keep giving for decades to come. There isn’t a right or a wrong answer; both reflect considered stewardship decisions in line with the foundation’s mission.
Endowments have flatlined. The data shows that since 2020, foundations’ endowments have not grown in real terms. While this does not prevent higher grant spending in the short term, sustained increases in spending above the long-term real return of endowments would gradually erode their purchasing power and reduce future grantmaking capacity. That puts a ceiling on how much they can give in grant spending without eating into the capital base and reducing the amount available for future years’ grant spending.
What can we learn from individual foundation’s spending patterns?
Coming back to Wellcome Trust: their spending dipped in 2024-25 compared to the previous year; from £1.2 billion in 2023-24 to just over £1 billion, a reduction of 14%. But their most recent annual report (not included in UKGrantmaking’s 2024-25 figures*) shows their spending rise again to £1.4 billion, an increase of 34% from 2024-25. Wellcome explained to us that their 2024-25 figure reflects the timing of large multi-year commitments rather than any change in direction – with significant grants in both the previous and following years bringing those totals back up.
For many foundations, it comes down to grant timing. Leverhulme Trust (the 7th largest UK charitable trust by grant spend) fell slightly from £128 million in 2023-24 to £120 million in 2024-25, but remains well above its £103 million spend in 2022-23. Like many foundations, its spending fluctuates year to year, mixing regular annual grant schemes with irregular ones, including some triennial schemes of varying sizes. In 2025, to mark its centenary, Leverhulme announced it will grant an additional £100 million to existing schemes – so grant expenditure is set to rise in coming years.
Like many foundations, Esmée Fairbairn Foundation increased their grant spending significantly during Covid (by £14 million) and the cost of living crisis (by £7 million). Although grant spending fell from £58 million in 2023-24 to £49 million in 2024-25, it remains substantially higher than the £37 million awarded in 2022-23.
To continue making grants over the long term, the foundation sets their annual grant budget at 4.25% of the average value of investments over the past five years. In addition to grants, the foundation has an active £60 million social investment fund, as part of their approach of using all their assets in pursuit of their mission.
Every foundation takes their own course and one foundation’s spending pattern doesn’t mean the whole sector will follow a similar route. But it does suggest that for some foundations, last year’s slowdown may reflect a short-term correction rather than a change of direction.
The bigger picture
When we zoom out, the overall spending trend still points upward. Now in its third year, UKGrantmaking is able to track longer-term trends as well as single year changes. Despite the 2024-25 dip, foundations are collectively spending more than they were two years ago: £8.4 billion compared to £7.2 billion, an increase of 14% (before applying inflation).
What the numbers don’t show
Aggregate figures provide an important measure of change but can mask what’s actually happening on the ground – which is perhaps the most important measure of all.
Even in years when foundation giving rose, many grantseekers didn’t feel it. Need has increased faster than funding, more organisations are competing for the same grants, success rates are dropping and government grant reductions have left a gap foundations can’t possibly fill. Demand is also shifting: more grantseekers are requesting longer-term funding, committing foundation resources for extended periods and reducing the total number of grants available.
When grantseekers say that funding feels harder to secure, they’re absolutely right; the data showing an ongoing upward rate in foundation spending doesn’t contradict that experience.
What this means
Foundation funding remains essential – it represents one third of all grants awarded. Foundations are making intentional decisions about how to sustain their giving over the long term to pursue their charitable missions.
But the pressures on grantseekers are real and structural. Rising need, falling government grants and increased competition aren’t going away. The question isn’t only how much foundations give, it’s also how they give.
In a tighter funding environment, practice matters. Responsive relationships, trust-based approaches and proportionate reporting requirements can make a big difference to grantseekers even when the total pot isn’t growing. ACF’s Stronger Foundations resources (available to members) set out five principles for more impactful grantmaking – something foundations can act on in any funding environment.
Data in this blog is drawn from UKGrantmaking, the definitive annual publication on grant funding in the UK, led by 360Giving in partnership with ACF, ACO, UKCF and Funders Together.
*UKGrantmaking uses April 2024 – March 2025 as the data period. Wellcome Trust’s financial year runs September-August, therefore their 2024 annual return is used for 2024-25 dataset and their 2025 return will be used for 2025-26.