The funding environment has without doubt changed over the last few years and become a lot more challenging. Groups I’ve spoken to recently have made more applications in a month than they did in a previous year. Grants are becoming smaller, more niche, or are closing down. There is also more competition for the funds on offer, all of which has created a difficult environment in which to secure funding and is taking up more and more organisational time – not just in making applications, but also in finding suitable grant opportunities.

There are, I think, several compounding issues that have led to this and, unfortunately, these are unlikely to change very soon.

Covid poured a huge amount of money into the sector, which allowed many groups to expand and deliver much-needed services and activities in order to combat the impact of the pandemic. Whilst this enabled groups to grow and expand at the time, many of these grants have now ended, leaving organisations with larger staff teams that still need funding. In some cases, the new services have ended, but in many others they have demonstrated an ongoing need and therefore need to be continued.

A further impact of this was that some funders expanded resources to help groups through the pandemic and afterwards cut back on grant-making to re-evaluate priorities and how they want to operate.
“Due to the high volume of applications received in 2025, the Trust will only be accepting applications under the following category…”
This type of response from funders is becoming more common.

Alongside this, two of the biggest funders in the sector paused receiving applications to review their strategies. First, Tudor Trust closed for around 18 months to review its working practices and, when it reopened, switched to an invitation-only programme. This was especially significant because the Trust was one of the funders that would fund larger amounts over multiple years and had broad criteria.

The Henry Smith Charity then also closed for a review and, whilst this was for a shorter period, when it reopened it switched to a rounds-based process and tightened the focus of its work. Previously, it had broad criteria and allowed large, multi-year grants.

The impact of this was that smaller funders saw an increase in applications as organisations sought alternative funding sources. Some of these funders then became overwhelmed and closed to applications or tightened their criteria. I have seen funders who, in 2025, were not going to accept new applications until autumn 2026. Some trusts have also increased the length of time before an organisation can reapply for funding, from 1–2 years and in some cases up to 3 years.

Where one large application to a major funder might previously have funded an organisation, groups are now in a position where they need three, four or more smaller grants, often on an annual basis, to fill the gap. This has increased the workload for funders in assessing applications, as well as the time organisations spend preparing bids. I also feel that as groups run out of best-fit funders, they begin applying to those that are not such a close match, further adding to the number of applications being submitted.

A further addition to the mix is the increasing use of AI to produce grant applications. This allows more applications to be generated and submitted. However, whilst AI can help write strong applications, it can also very quickly produce poor, bland and generic-sounding bids if it is not guided properly and given the detailed information needed.

Rises in the cost of living have increased both the demand for many charitable services and the cost of delivering them. This has, in turn, increased the need for funding. Alongside this, grants from the statutory sector have rarely increased in line with the rising cost of living, leaving a black hole in organisational finances that needs to be filled.

So where does this leave groups?

There is no easy solution, but my recommendations to help weather the storm and build future resilience are:

1. Ensure you are capturing the true impact of your work so you can tell prospective funders how good you are and the difference you are making. Never forget that you are competing against other groups for funding, so be clear about what makes your work a better investment.
2. Be specific in applications. Use accurate data and examples. Nothing screams AI like a vague and generic application and, even if it is not AI-generated, a lack of detail lessens the impact of your work.
3. Invest time in searching for the best funding match for your work. Check funder criteria and who they have funded (this is normally available via their accounts on the Charity Commission website). If possible, contact the funder prior to making an application. AI can help with this, but it needs directing to the right places to search and is best used in incremental steps rather than a single prompt, which allows more opportunity for error or misunderstanding to creep in.
4. Demonstrate added value. Show funders how a project adds value to other work or how it is integral to the wider support you are delivering.
5. Don’t rely solely on grants. Easier said than done, but even small steps to diversify income will help. Look to develop donations and/or sponsorship, and consider whether you have assets that can generate income. Whilst these may not be sufficient to fund a project on their own, they do three important things:
   – they show funders that you are trying to raise money and are not just looking for grant support;
   – they demonstrate that the community values your work enough to support it financially; and
   – they reduce the amount of grant funding you need to request, lowering the cost per beneficiary and making you a more attractive proposition to fund.

So yes, the funding environment has become a lot more challenging, and grants are taking longer and getting harder to secure. There are resources and AI tools that can lessen the burden if used wisely and appropriately. Alongside this, good application-writing practice that focuses on clearly defined need, combined with investment in non-grant income, will pay dividends in the long run.