Why Boards are betting on Grants – and what it’s costing Community Fundraising – Raise + Recruit
19 Nov 2025
John Austin

Why Boards are betting on Grants – and what it’s costing Community Fundraising

Why Boards are betting on Grants – and what it’s costing Community Fundraising

In a recent article I argued that community fundraising isn’t dying – leadership attention is.

The natural next question is: why has leadership attention moved? Why are so many boards quietly pivoting from community fundraising towards trusts, grants, statutory income and a handful of major donors?

When you look at the numbers, the shift is understandable. When you look at the full picture, it’s also risky.

1. The Funding Mix Has Tilted – and Boards Have Followed It

First, the context.

According to NCVO’s UK Civil Society Almanac 2024, almost half (48%) of sector income now comes from the public, with government providing around 26%.

But underneath that headline, the story is very uneven:

At the same time, the pandemic smashed in-person events and trading income. NCVO estimated billions in lost fundraising and trading income in the first months of Covid, largely driven by event cancellations.

So from a board’s perspective, the story since 2020 looks like this:

No surprise, then, that trusts, foundations and statutory grants now feel like the “responsible” bet in the boardroom.

2. The Seduction of Grant ROI

On paper, grants look like a CFO’s dream.

Recent ROI benchmarking from LarkOwl and HE Award Solutions, based on UK charities, found approximate returns per £1 spent:

NCVO’s broader sector picture is slightly more conservative, but still clear: for every £1 spent on fundraising, charities receive over £4 in return on average.

If you put that into a board pack with no further nuance, it tells a simple story:

“Grants are our most efficient income stream. Let’s invest there.”

That’s the gravitational pull you’re feeling in many organisations.

But those ratios hide three critical facts:

  1. Success rates
  2. Time cost
  3. Strategic value beyond in-year income

Let’s take those in turn.

3. The Odds of Grant Success Are Worse Than They Look

We don’t have one universal number for “grant success rate” – it varies by funder type, cause, track record and application volume – but recent UK data paints a fairly consistent picture:

One meta-analysis summarised it neatly: “foundation grants are highly competitive, with success chances anywhere from under 10% up to ~50%, depending on the funder.”

So yes, you may see a 10x–20x ROI on the grants that land. But to get those wins, you’re often absorbing two, three, four or more failed applications per success.

Unless you explicitly count the cost of all those “no”s, the ROI story you’re giving your board is incomplete.

4. The Hidden Time Cost of Grant Funding

Grant funding doesn’t just cost money. It costs time – and a lot of it.

A major study for the Law Family Commission on Civil Society found that UK charities spend at least £900 million a year just applying for grants from trusts and foundations.

Drilling down:

On top of that, one analysis estimated an average of 40 hours of staff time per grant just on reporting – equating to 15.8 million hours a year across the sector.

Then there’s the time waiting:

If you convert that into a “time ROI” narrative:

For every successful grant your charity secures, staff may have invested dozens of hours across multiple unsuccessful applications, plus reporting, stewardship and waiting time.

Most board reports never show that side of the equation.

5. Why Community Fundraising Has Lost the Argument in the Boardroom

Given all that, why has community fundraising lost out?

It’s rarely because leaders don’t like community fundraising. It’s because community doesn’t present as well in the language of risk, ROI and strategic scale.

A few big drivers:

a) Volunteering and capacity constraints

Formal volunteering is still below pre-pandemic levels. Recent data suggests:

If you’re already struggling to recruit volunteers, choosing to run another community event can look like “taking on operational risk”, whereas a grant bid feels like a desk exercise.

b) Perceived public “fatigue”

Cost-of-living pressures have fed a narrative that “the public are tapped out”. One 2025 survey suggested nearly 60% of Brits feel ‘charity fatigue’ and many feel pressured to give money they can’t afford.

Even if community fundraising appetite remains strong in practice, this perception makes community feel politically riskier in the boardroom than approaching a handful of institutional funders.

c) The ‘big number’ bias

A single six-figure, multi-year grant:

Versus a patchwork of hundreds or thousands of supporters giving smaller amounts, attending events, organising their own challenges.

Community fundraising is often still seen as:

“Nice engagement, but not serious money.”

Yet sector data tells a different story: in 2024, 53% of charities expected income growth from fundraising events and activities, particularly small community events.

The demand is there. The narrative is not.

d) Grant funding appears to solve multiple problems at once

Recent shifts in the funding landscape show:

From a board’s view, the big strategic grants look like a way to:

If your board conversations are dominated by programmes and risk, not supporter relationships and long-term resilience, grant income will always win the slide deck.

6. The Strategic Problem: Income vs Infrastructure

Here’s the crux:

Grants and contracts buy you delivery. Community fundraising builds you infrastructure.

Several recent analyses have questioned whether grant-funding, as currently structured, is really built for long-term impact. Short-term, tightly restricted, project-based grants can:

Community fundraising, by contrast:

From a resilience perspective, the real risk isn’t that community fundraising is “low value”. It’s that your organisation becomes structurally dependent on a small group of funders whose own strategies can change overnight.

7. What CEOs and Fundraising Directors Can Do Next

This is where you can change the conversation at board level.

1. Start reporting true cost per £ raised for grants

When you present grant performance:

Alongside the usual ROI, add metrics like:

You’ll often find community fundraising compares much more favourably on these measures.

2. Put community fundraising into the risk conversation, not just the income one

Boards understand diversification.

Use data like NCVO’s – where 48% of sector income comes from the public – to ask:

Community fundraising then becomes a risk mitigation strategy, not a “nice-to-have channel”.

3. Report community fundraising in people metrics, not just cash

For community/participation fundraising, make sure your board sees:

You’re not just comparing £x vs £y. You’re comparing “one restricted grant” vs “thousands of people who now care enough to act for us.”

4. Stop treating events and community as the same thing

Events have a lower ROI than other methods in most benchmarks (~£2.60 per £1).

Boards often conflate that with all community fundraising.

Help them see the distinction between:

The ROI – financial and strategic – is very different.

5. Re-balance the portfolio, don’t flip it

This isn’t about abandoning grants.

Grants, contracts, major donors and legacies are all essential. The argument is:

Stop treating community fundraising as the junior partner.

A resilient portfolio in 2026:

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