The Philanthropy Advantage Report 2025
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Anna Mowbray
Senior Policy Manager
In May, the Charities Aid Foundation published new research into local giving. The new report shows strong appetite for deeper community involvement across the UK and highlights the critical role that charities play in building strong communities.
As a country, we have an opportunity to create a virtuous circle — unlocking more engagement in communities, donations to charity and a stronger sense of local pride — by investing in charities and civil society. When people see the positive impact of charities in their local community, they are much more likely to donate overall, twice as likely to give locally and three times as likely to volunteer.
Yet action is needed to ensure that we nurture this virtuous circle. Today charities are struggling in the face of a fall in giving across the UK. In 2025 people donated 0.9% of their income to charity, a decline from 1.1% in 2024. It is clear this reflects wider cost-of-living pressures, which have left many of us feeling more financially insecure. But there are some who can give more and it has never been more important to make sure a strong culture of giving is embedded in society. In tough times, we need to support each other to address shared challenges. Yet just 37% of people engaged in their community last year.
At CAF, we are committed to advocating for policy changes that will unlock more and better giving. We had long been calling for the Government to launch a strategy to boost giving, and the Government’s new plan for unlocking place-based philanthropy, Our Place to Give, is a much-needed step towards this. You can read all about this plan in a recent blog by Vicki Butler, CAF’s Head of Policy and Public Affairs.
Building on this foundation, we believe that there are steps the Government can take to catalyse the virtuous circle we want to see in our communities.
First, the Government should continue to support the brilliant place-based giving schemes already in places around the country. These schemes are a way for people to give to the communities they care about, connecting those with a link to the place — from local businesses to wealthy individuals and those who grew up there — with brilliant local charities, delivering vital support to projects that change lives.
Through Our Place to Give, the commitment to developing a community of practice for place-based giving schemes, allowing them to share intel and learn from one another, is a welcome step forward. We encourage the use of targeted funding to help these schemes to develop their capacity and become more sustainable.
Secondly, match funding offers a clear opportunity to unlock donations and build community wealth for the long term. It is encouraging to see many government departments using match funding across a range of programmes. Building on this success, there is scope to develop a targeted regional match fund scheme. Such a scheme could help build long-term endowments within communities, creating a long-term source of funding for communities insulated from political risk.
Thirdly, there is a need to support local civil society infrastructure, which has declined in recent years. As anyone in the charity sector knows, fundraising is important, skilled and time-consuming work. Charities need to be equipped to build relationships with donors and engage with local initiatives. That is why support should be directed to helping civil society organisations to fundraise and attract philanthropy.
Our Place to Give represents welcome progress towards a more strategic approach to growing giving. We now need targeted investment and collaboration from government, philanthropists and businesses to renew our culture of giving and build stronger, more resilient communities across the UK.
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