Sector Infrastructure Funding 2022

Voluntary sector infrastructure bodies perform vital roles supporting and enabling voluntary and community organisations, both locally and at a national level. This report explores how the voluntary sector infrastructure has changed over the last 12 years, particularly by looking at its finances and funding. It highlights a number of challenges around funding of these organisations.

It is our intention that this research provides context to grantmakers to inform strategy development and encourage funder collaboration. Infrastructure organisations are sometimes an invisible part of the sector, but we all feel the impact when organisations close, either directly or indirectly.

The Paul Hamlyn Foundation has commissioned 360Giving to support this analysis as a starting point to facilitate discussions and support more active decision-making in what is likely to be a very challenging period for the sector.

The data used in this report is available to explore. As noted in the report methodology in the appendix, identifying the full extent of organisations and detailed information about them, particularly those that had closed, was challenging. We’ve used data from the Charity Commission, regulators in Scotland and Northern Ireland and 360Giving publishers to identify and analyse these organisations. There are some gaps in the data, but we believe it gives an overview of voluntary sector infrastructure and how it has changed.

Key conclusions

The report highlights a number of challenges around funding for these organisations over time:

• The sector infrastructure has not grown in real terms over the last decade, following large falls in the size of the sector before that. This is despite growth in the voluntary and community sector as a whole over the same period. This means that, compared to the picture in 2009-10, voluntary sector infrastructure in 2020-21 was much smaller, but supporting a larger voluntary sector. The level of capacity building support available for charities has been further masked by increased diversity in the kinds of work delivered and income generating activities included in the turnover.
• Although funding from non government grantmakers is only a small percentage of the total funding for infrastructure, these grants are an important part of the funding mix for some organisations, particularly for specialist organisations supporting marginalised groups who are least able to pay for services, and where the capacity building support might not be available without this grant funding.
• Very few trusts and foundations fund the sector infrastructure organisations and it is a very fragile ecosystem. Changes to funder strategies expose this vulnerability with some infrastructure bodies reporting that they have few funders that they are even eligible to apply to. This means change in the strategies of one funder are likely to have an impact on the applications received by others.
• Covid-19 had a significant impact on voluntary sector infrastructure funding, including large one-off grants to help infrastructure bodies support their members, as well as help them survive as organisations themselves. While this impact has manifested in a rise in the total incoming resources of the sector in 2020-21, it is unlikely that these increased resources will be sustained over time. In addition there is a risk that through their work during the pandemic and the cost of living crisis, some of these organisations are trying to support an increased number of charities and community groups needing support when their own funding position is precarious.