CEO blog | Adapting and responding to challenges  

23 July 2024

Carol Mack, ACF chief executive, reflects on how foundations have adapted and responded to the cost of living crisis challenges in 2022-2023.

July saw the launch of UKGrantmaking, an innovative platform designed to provide transparent and accessible data on grant-making across the UK. We were delighted to work in partnership with 360Giving and others on this groundbreaking initiative.

UKGrantmaking not only reveals that in 2022-2023 the total grant spend by foundations was £6.4bn, but also offers multiple opportunities to slice and dice the data according to your area of interest. To me, the beauty of data is the questions it prompts about what lies behind the figures. Understanding the context behind the numbers helps to develop a deeper understanding of what is going on.

So, just what were foundations experiencing in 2022-2023 as they delivered this significant £6.4bn of funding for communities and charitable causes?

This is the question that ACF’s new report, Foundations in Focus, seeks to address, drawing on conversations with a diverse sample of ACF members. In 2022-2023 the UK was emerging from the pandemic, with inflation peaking at 11% and the cost of living crisis in full swing. The pressures on many charities were immense, with some being forced to cut services, turn people away, or even close altogether. Amidst a backdrop of decreased government funding, charities have been increasingly looking to foundations, with demand for foundation support surging over the past few years.

The data suggests that although many foundations increased their grant spend in 2022-2023, they faced both economic headwinds and operational hurdles. Many adapted their grant-making practice, to give grant-holders greater flexibility to adapt to a continually changing context. Examples included offering more flexible funding options, including unrestricted grants and multi-year funding. Some offered funding specifically for organisational and administrative expenses to ensure that grant-holders could maintain these essential functions in a challenging financial landscape. 

Many foundations have found themselves expanding their traditional roles, stepping in where public funding and other support mechanisms have fallen short. Our report gives plenty of examples of quick adaptations and efficient responses to the evolving needs of the communities and causes that foundations care about.

But foundation funding, important though it is, cannot possibly fill the enormous gap between greater need and diminished resources. And some foundations fear that stepping in to fill gaps in pressing needs, comes at the expense of funding work to find fresh solutions to challenging problems – papering over the cracks and leaving the fundamental problem unchanged.

So it is hardly surprising that foundations have been asking themselves some fundamental questions about how they work, with many actively reflecting on their strategies. A handful of members have chosen to spend all of their assets to meet current need, while others have set up new funds, pivoted their strategies to focus on marginalised communities, or fundamentally re-evaluated their approach. Foundations in Focus explores these big conversations too.

Improving quantitative data collection in the foundation sector is a collective responsibility – and all foundations can play a part by sharing their data with 360Giving to build an ever clearer picture of what is happening in our sector. For ACF’s part, we are proud to have partnered with 360Giving on their UKGrantmaking platform, and are grateful for the support of Pears Foundation with our Foundations in Focus research and report.

Complementing robust data with qualitative insights enables us to paint a fuller picture of the sector’s landscape and support foundations in making strategic, impactful decisions.  By fostering a culture of transparency and collaboration, we can better understand and navigate the complexities of the foundation sector, ensuring it remains resilient and effective both now and in the years to come.