CEO blog | Getting off the ‘hamster wheel’: how can foundation boards respond strategically to rising demand?
30 September 2025
ACF's chief executive, Carol Mack, shares insights from a recent event for foundation trustees, exploring why demand for funding is rising and the role of the board in responding to these challenges.
Foundations are acutely aware of the financial pressures facing the voluntary sector.
They hear about these challenges directly from the charities they support. And sadly, most are having to turn down more applicants than before because they don’t have enough resources to fund them all.
For foundation staff who are immersed in grant-making processes every day, responding to rising demand can feel like a very operational struggle. But what is the role of the trustee board in enabling foundations to respond strategically to these challenges?
ACF recently convened foundation trustees at an evening event to explore this question and share their experiences.
We’ve brought together insights from these conversations in a new guide for foundation trustees (member login required), designed to help our members reflect on what they’re already doing and consider options for further action.
Why is demand for foundation funds rising?
It was a privilege to be joined at our event by Debra Allcock Tyler, CEO of Directory of Social Change, who painted a vivid picture of the challenges facing the sector.
We heard how rising demand for foundation funding is a direct consequence of increased need for many charities’ work. At the same time, their costs have risen – this year’s National Insurance increase is one example – while government grants have declined.
As Debra said: “Charities always try to do more with less, because they are dealing with people’s lives. They have to look their service users in the eyes, and it’s hard to turn away vulnerable people who are coming to you for support. But without proper funding, they risk running themselves into the ground.”
I was heartened by Debra’s reflections on how trusts and foundations have stepped up to support the sector – particularly by funding less popular causes. The data backs this up – year after year, foundation funding has risen above inflation, recently overtaking government as the largest source of grants to charities.
It’s no wonder that after responding to successive crises, foundations’ own resources are stretched and they simply can’t meet all the needs they are presented with.
But it’s not all doom and gloom. What struck me most from talking to trustees was the wide range of practical approaches they have taken to navigate these challenges.
How are foundations responding?
We heard from Ola Opoosun, deputy chair of the Clothworkers’ Foundation, how applications to the foundation’s open grants programme doubled, significantly increasing the demands on their people and processes.
Ola told us: “As a board, it’s been important to have continual conversations about demand and how we can support our staff team”.
The trustees’ attentiveness to these issues helped them make timely decisions that had tangible benefits. They agreed a budget increase to ease immediate pressures and outsourced some grant-making to external partners, freeing up staff to focus on designing longer-term solutions – which they have now implemented.
For Henry Smith Foundation trustee Nicola Pollock, “it’s not just what you do, but how you do it that makes a difference”. Developing the foundation’s new strategy was a collaborative effort between trustees and staff. The board shaped the broader objectives and created space for the executive team to take an iterative approach. Improving the experience of grant applicants was a key driver, including reducing the time spent on unsuccessful proposals.
Nicola shared: “Being so busy on the hamster-wheel of processing large numbers of applications meant staff had limited time to speak to charities. Now they can do more talking, and less paperwork.”
Another important principle for the trustees was ensuring a continued flow of funds to the sector while reviewing their programmes. This included topping up existing grants to cover charities’ additional National Insurance costs.
Impact beyond grant-making
Grant-making is just one of the tools foundations use to have a positive impact.
Debra Allcock Tyler encouraged trustees to consider how foundations can use their voice to address the underlying causes of the sector’s challenges: “Funders have power to speak out in a way that many charities don’t. Because they aren’t asking for money, they can have a different kind of conversation with government – and by collaborating on this, their collective influence could be even stronger.”
Hill Gaston, UK Head of Sustainable Investment at Mercer, highlighted how challenging times can prompt foundations to think harder about the role of their investments: “As well as meeting financial return requirements, investments can contribute to social impact in lots of different ways, from avoiding harm to actively achieving positive outcomes for foundations’ missions.”
As one of ACF’s Official Partners, Mercer’s expertise helps our members make effective use of their investments. We’re also grateful to Mercer for generously hosting the event.
Learning from the foundation community
Foundations can’t meet every need, but trustees can draw from a wide toolbox of approaches that allow them to make a significant contribution.
To support members in responding to rising demand, ACF has developed a number of resources, including our new guide and practical tool for foundation trustees (member login required).
And if your foundation isn’t yet a member of ACF, join us to benefit from many more practical resources and a supportive community of your peers.
Conversations like the ones we had at our recent event show that, despite the scale of the challenge, foundations are taking practical action that makes a real difference – and sharing their learning to inspire others.