PRESS RELEASE- Regulator publishes new guidelines on grant-making as charity sector continues to feel financial squeeze

The Charity Commission has today published new guidance to help charity trustees make confident, responsible grant-making decisions at a time when many charities are facing sustained financial pressure. 

Thousands of charities fulfil their charitable objectives by providing grants to other organisations. This guidance outlines the key principles of effective grant-making, covering everything from setting funding priorities and undertaking due diligence to monitoring funded projects and measuring impact.

In March, the charity regulator reported that grant-making charities distributed £17.84 billion in grants during 2024, an increase from £16.97 billion in 2023. Of this total, £12 billion was awarded to other charities. Despite this growth in grant distribution, the regulator's analysis highlighted continued financial pressures across parts of the sector for the third consecutive year, against a backdrop of demand for charitable services in England and Wales rising to three times previous levels.

The updated guidance replaces and broadens previous advice to cover all aspects of grant-making. It provides greater clarity that grant-making charities can award unrestricted funding to charities whose purposes are the same as, or narrower than, their own. This approach gives recipient organisations greater flexibility to allocate funds where they are needed most, provided they are used to further charitable purposes. Unrestricted grants can help charities respond to changing needs, adapt their activities, and meet essential operational costs, supporting both sustainability and long-term impact.

Read the guide here

Read the press release here