February 1, 2026

Are grants making a comeback?

Those of us who’ve been around the voluntary, community, faith and social enterprise (VCFSE) sector for a while will remember a time when most of our funding came from grants… before the era of encouraging VCFSE organisations to bid for public sector contracts became all the rage!

Contracts work well for some larger voluntary sector organisations, but for many smaller ones, they’ve never really turned into a reality. Short timescales, mysterious online portals, large geographical areas, underfunded contracts, and the need to be able to readily increase and decrease delivery have all been significant barriers.

The most recent report from the Third Sector Trends study, undertaken by Prof Tony Chapman from Durham University, looks at the income sources, assets and financial wellbeing of VCFSE organisations across England and Wales – you can read the full report here (and all the other reports from the study here).

A couple of key things jumped out at me…

The first was around the declining interest in delivering public service contracts, particularly in middle sized organisations. Back in 2013, nearly half of organisations with an income of up to half a million pounds a year were interested in bidding for contracts; now it’s only 15% of those organisations. But, as Tony Chapman says, it’s the decrease in interest from the larger organisations that’s most startling – for those with an income of £1m – £5m, it’s down from 64% in 2013, to 42% now. That national experience certainly resonates with what we hear locally.

At the same time, we’re seeing an increased interest in “doing things differently” from parts of the public sector. There’s an appetite for a more collaborative approach, and a great guide (Purposeful Collaboration) from the Local Government Association and NCVO to help commissioners turn that intent into practice.

That’s a conversation we’re hoping to pick up with both Councils, and perhaps other partners too…

Of course, grants aren’t the answer to everything. Most VCFSE organisations will be juggling a wide range of income sources, including public donations, enterprise activity, grants and more, but perhaps we need to think more imaginatively, beyond traditional contracts (and subcontracts), if we’re going to fully involve smaller local providers in the delivery of public services?

 

Carolyn Otley
Chief Executive
Cumbria CVS