Giving by the country’s biggest charitable foundations rose by 13 per cent in the first year of the pandemic.
The value of grants made by the 300 richest foundations grew from £3.27bn to £3.7bn in 2020/21, research shows.
This is a far bigger year-on-year increase than the five-year average of about 6 per cent.
The Association of Charitable Foundations, which released the analysis today, said it showed how its members “stepped up” to help the voluntary sector during Covid-19.
Foundations acted during a year when charities were trying to address “a global pandemic in full throttle, with all the social chaos and economic volatility that caused”, the research says.
The ACF paper shows that the total value of the foundations’ assets rose even more sharply in this period – up nearly 20 per cent from £73.2bn to £87.3bn, driven by “strong growth in the value of investments”.
The research analyses spending, income and assets at the largest philanthropically-funded foundations, measured by the size of their annual grant-making, including Wellcome Trust, Comic Relief and BBC Children in Need.
The 300 organisations in the study represent 90 per cent of all charitable foundations and are responsible for about 40 per cent of all grant-making each year, the researchers say.
ACF found that most of the foundations – 57 per cent – increased the value of their grants in 2020/21, with an average increase of £3.5m. This figure excludes Wellcome Trust, which gives away so much money each year that it can skew overall figures.
The grants included £430m which was spent directly and indirectly on the Covid-19 crisis, including for scientific research, paying for protective equipment and to help people adjust to lockdown.
But the paper also warns: “Despite the evidence of an increase in levels of grant-making, some programmes had to be paused, redirected or repurposed towards Covid relief.
“In the ‘new normal’ foundations face a number of tough choices and may feel that the charity sector is relying on them to be a consistent, independent and flexible partner when other forms of emergency funding dry up.”
Carol Mack, chief executive of ACF, said: “This year’s research shows how foundations stepped up during the Covid-19 pandemic.
“They increased their spend on grant-making, making over £430m in Covid-related grants to charities from 2019-21.
“Simultaneously foundations responded by adapting their grant-making practices, collaborating with other funders, pooling funds and flexing their grant-making, all while keeping their own costs stable.”