As substantial providers of public services, the consequences of charity instability manifest in increasing inequalities, the loss of critical services, the erosion of social infrastructure, and greater pressure on public systems. UK foundations are becoming an increasingly important lifeline for charities, while also grappling with rising applications and challenging decisions about how to give with the greatest impact.
So, as public giving continues to fall, how can foundations best help to provide stability, invest in resilience and support charities to adapt to this new reality?
1. Prioritise stability over short-term growth
With donor numbers declining steadily over the past decade, many charities are operating with significantly less predictable income. Pilots, one-off grants or short 12-month programmes do little to offset this instability. Stability itself is a mechanism for survival.
Foundations can make the greatest impact by shifting more of their portfolio toward:
- Longer-term multi-year commitments, giving charities the confidence to plan and reduce the costs of annually trying to secure repeat or replacement funding. Delivering and evidencing impact takes time and longer-term support is an investment in sustained provision and the routes to systemic changes.
- Supporting the proven work that charities already deliver, recognising that they are the experts, is often a more effective route to sector stability than funding new organisations doing similar work. Backing established provision helps charities maintain momentum, protect essential services, and reduce duplication across the sector.
2. Increase the share of unrestricted and flexible funding
This reduction in public giving directly affects an organisation’s ability to cover its core costs, including employees, systems, fundraising, and infrastructure.
Unrestricted funding allows charities to:
- cover rising operational costs
- respond quickly to crises or demand spikes
- invest in fundraising when they most need to.
Flexibility has become a core risk management tool and is critical to resilience. A growing body of evidence1 shows that unrestricted funding generates stronger long-term impact.
3. Fund inclusion, not just impact
Our UK Giving 2026 report reveals a striking shift in public participation: half of respondents told us they do not give to charity at all. While affordability remains the biggest barrier, our data also shows a deeper challenge - disengagement. Among those who are not donating, 28% say they are simply not interested in charities, rising to an alarming 49% among higher and additional‑rate taxpayers.
Despite incomes of at least over £125,000, additional rate taxpayers are no more likely to donate than people whose income is low enough that they pay no tax at all.
This matters because a healthy civil society depends on broad participation. To address this, foundations can fund charities to:
- Develop inclusive engagement strategies that do not rely solely on financial giving.
- Build relationships and awareness programmes even when income is not immediate.
- Broaden engagement beyond financial giving, building awareness and participation through volunteering, advocacy and other inclusive pathways.
- Maintain trust through consistent impact communication, clear storytelling, operational efficiency and excellent supporter care.
4. Help charities adapt to changing giving behaviours
With an estimated 2.8 million people cancelling one of their regular donations in 2025, and both the volume and value of donations and individual sponsorships declining, charities need the freedom to test, learn, and adapt.
Foundations can support this by funding:
- new approaches to donor recruitment
- pilots for alternative giving routes
- digital engagement models that don’t rely on traditional fundraising funnels.
Crucially, learning-led approaches take time. Returns on investment are rarely immediate. Funders who understand the strategic nature of this work can help charities unlock sustainable, long-term gains.
5.Recognise that donor decline affects some groups more than others
The decline in giving is not evenly distributed. Some charitable causes — such as international development — have experienced substantial real-terms drops in income. Areas including homelessness, refugees, mental health, human rights and poverty relief, receive lower levels of donations than causes such as health, children, young people and animals.
Foundations have an opportunity to factor these disparities into their decision making by:
- considering those organisations whose work always struggles to attract individual donors
- working in coalition with other funders focused on causal areas to deepen understanding of the communities and causes being left behind
- evaluating the impact on existing charity partners that rely on you if you are thinking changing the type and size of charities you supported.
6. Invest in organisational resilience, not just programmes
Donor decline represents a structural issue rather than a temporary disruption. Combined with rising costs and growing demand, this leaves many charities teetering on the edge of survival.
As a result, investment in their underlying organisational health is essential, not only to sustain charities but maximise their impact for:
- leadership development and governance
- embedding lived experience
- impact measurement and evaluation frameworks
- fundraising capacity and training
- robust financial systems
- infrastructure and processes for efficiency
- technology and digital transformation.
These structural needs are often underfunded, dismissed as “overheads”. In reality, they are the capabilities that charities need to deliver impact consistently and adapt to constant change. Funding resilience is funding impact.
Foundations have a vital role in shaping a stronger future
CAF’s latest UK Giving 2026 findings underline that the sector is changing and funders who evolve their strategies now will be best placed to ensure their support drives meaningful, lasting impact and to help reshape the giving landscape for a new era.
