Grant-making by foundations rose by 6.4 per cent over the past year to £2.5bn, according to a new report published today by the Association of Charitable Foundations.
The report says this uplift came despite a £50m fall in grant-making in 2014 by the Wellcome Trust, which is by far the largest individual grant-maker.
The £2.5bn in grants given in 2013/14 still falls short, however, of the £2.9bn that was given before the financial crash of 2008, which the report says shows that the growth is tentative, the after-effects of the recession are still being felt and trustees are facing challenging choices.
The report, Giving Trends: Top 300 Foundation Grant-Makers 2015, uses figures from the most recently available annual reports of the top 300 UK foundations based on the annual value of the grants they give out. It was co-authored by Cathy Pharoah, professor of charity funding at Cass Business School.
It says that grant-making by the top 300 foundations rose from £2.3bn in 2012/13 to £2.5bn in 2013/14, while the income of foundations rose from £2.7bn to £2.8bn over the same period.
The report says a significant factor contributing to the upturn in grant-making was the growth in foundation income, which it attributes to the recovery of investment returns. Of the foundations that experienced income growth last year, more than 75 per cent increased their grant-making. Of the top 300 foundations, 65 per cent experienced a real increase in grant-making.
The report says: "Two years of consistent growth in foundations’ asset value have seen a healthy hike in grant-making of 6.4 per cent for this year’s top 300, still outstripping overall income growth of 3.6 per cent. With the economy predicted to maintain stable, though not spectacular growth, we might expect a period of more predictable and moderately increased grant-making. However, this is unlikely to ease the pressure faced by funds as government spending reductions bite ever deeper."
The Wellcome Trust was again by far the largest grant-maker by value, making grants worth £487.7m in the year to September 2014, the report says. Comic Relief was second with grants worth £103.1m made in the year to July 2013. The Children’s Investment Fund Foundation was third, giving out £68.6m in the year to August 2013.
The total assets owned by the top 300 foundations rose to a value of £52bn in 2013/14, which was substantially boosted by a £1.7bn increase in the funds of the Wellcome Trust. This represented a combined increase in the value of assets of almost 13 per cent since last year’s report.
The report says the top 300 foundations accounted for more than 90 per cent of the giving by value of the 10,000 foundations in the UK.
Foundations represented 13 per cent of total giving from private sources to charitable causes in the UK, down from 14 per cent last year, the report says.
It says that corporate foundations collectively accounted for about 9 per cent of giving by foundations, at around £217m.