The Big Shifts in UK Funding

📈 Growing Priorities

• Climate adaptation & resilience (not just mitigation)
• AI & digital transformation for social good
• Systems change approaches over individual programmes
• Cost of living support (practical help, not just awareness)
• Youth mental health (post-pandemic focus continues)
• Unrestricted/core funding (trust-based approaches)

📉 Declining Priorities

• Generic awareness campaigns (need action not education)
• Capital/building projects (unless clearly necessary)
• One-off events (preference for sustained programmes)
• Research without implementation plans
• COVID-specific projects (moved to BAU)
• Siloed single-issue approaches

Trend #1: Trust-Based Philanthropy Goes Mainstream

Major funders increasingly adopting trust-based approaches:

What This Means:

• Simpler applications: National Lottery cut application form by 60% in 2024
• Unrestricted grants: Esmée Fairbairn now 80% unrestricted vs 40% five years ago
• Multi-year commitments: 3-5 year grants replacing annual renewals
• Lighter reporting: Focus on learning, not proving
• Relationship over transaction: Investment in grantee success

Strategic implication: Position for longer-term partnerships. Show capacity for self-direction and learning, not just delivery to specification.

Trend #2: Climate Funding Pivots to Adaptation

Climate funding was £280M in 2023, projected £420M by 2026. But focus shifting:

Old Focus (Declining)	New Focus (Growing)
Carbon reduction education	Community flood resilience
Renewable energy awareness	Fuel poverty solutions
Plastic reduction campaigns	Climate anxiety mental health
Wildlife conservation alone	Nature-based solutions for communities

Trend #3: Digital/AI Integration Becomes Baseline Expectation

Funders increasingly expect digital sophistication:

Data-driven delivery: Real-time tracking, dashboards, evidence generation
AI-assisted services: Chatbots for advice, personalised interventions, efficiency tools
Digital inclusion: Not separate issue but embedded in all work
Remote/hybrid delivery: Expanded reach beyond geographic boundaries

Warning:

"We use Excel" no longer positions as digitally capable. Funders expect CRM systems, digital outcome tracking, and data analysis capabilities as baseline.

Trend #4: Systems Change Over Service Delivery

Major funders increasingly interested in addressing root causes, not symptoms:

❌ Old Framing

"We'll provide 500 food parcels to families in poverty"

Service delivery without systems critique

✓ New Framing

"We'll provide emergency food while advocating for Universal Credit reform and building local employment pathways"

Service + system change + evidence for policy

Trend #5: Participation & Co-Design Non-Negotiable

Beneficiary involvement evolved from "nice to have" to "essential":

Level	What Funders Expect Now
Minimum (Small grants)	Consultation evidence, feedback mechanisms
Expected (£25K-£100K)	Co-design of programmes, lived experience advisors
Required (£100K+)	Participatory governance, peer researchers, benefit recipients in leadership

Trend #6: Equity, Diversity & Inclusion Embedded (Not Add-On)

EDI expectations evolved significantly:

Intersectional analysis: How does your work address multiple disadvantages?
Representation in leadership: Board and senior team diversity matters
Equitable access: How do you remove barriers for marginalized groups?
Decolonial approaches: Questioning assumptions, sharing power, diverse knowledge

What this means practically:

Applications need demographic data showing who you reach (and don't reach), plans to address gaps, evidence of diverse leadership, and explanation of how you embed equity—not bolt it on.

Emerging Opportunities: Where New Money Is Flowing

AI for Social Good (New: £85M 2024-2026)

Government and philanthropic funding for AI applications in health, education, social services. Focus on ethics, accessibility, and demonstrated benefit.

Community Energy Projects (Growing: £120M annually)

Local renewable energy, fuel poverty solutions, community ownership models. Post-energy crisis sustained priority.

Youth Voice & Power (Hot: £95M 2024)

Not just "youth services" but youth-led organizations, young people in governance, intergenerational power-shifting work.

Financial Resilience Support (Sustained: £180M)

Debt advice, financial literacy, savings schemes, benefit maximisation. Cost of living crisis driving long-term priority shift.

What's Falling Out of Favour

❌ Siloed mental health awareness: Preference for integrated wellbeing approaches
❌ Generic "digital skills" training: Needs clear employment/progression outcomes
❌ Arts for arts' sake: Social impact and community benefit expectations increased
❌ Large capital appeals: Buildings questioned unless operationally essential
❌ Short-term interventions: Preference for sustained support models

Strategic Positioning for 2025-2026

How to Align with Trends:

✓ Frame work in system change terms: "We deliver X while addressing root causes through Y"
✓ Embed climate lens: Even if not environmental org, show climate consideration
✓ Demonstrate participation: Lived experience in design, delivery, governance
✓ Show digital capability: Data systems, outcome tracking, modern communications
✓ Request unrestricted funding: Position for trust-based relationships
✓ Evidence equity approaches: Who you reach, barriers addressed, representation

Conclusion

Funder priorities shift faster than ever. Organizations that monitor trends, adapt positioning, and demonstrate alignment with emerging priorities secure funding more consistently than those pitching 2020's priorities in 2025's landscape.

TL;DR: 2025 Funding Trends

✓ Trust-based philanthropy: simpler applications, unrestricted funding, multi-year
✓ Climate focus shifts to adaptation and resilience (not just mitigation)
✓ Digital/AI capability expected as baseline, not special
✓ Systems change over service delivery (address root causes)
✓ Participation non-negotiable: co-design, lived experience leadership
✓ Emerging opportunities: AI for good, community energy, youth power
✓ Declining: awareness campaigns, capital projects, siloed approaches

UK Grant Funding Trends 2025: Where the Money Is Moving