The Fundraising Crunch: a challenging time for small charities like Local Welcome

Written by: Rhiannon Prideaux (Local Welcome’s Fundraiser)

Posted on: 28 October 2025

Since I started working as a freelance fundraiser for small charities in 2022, I’ve seen the grant funding landscape shift dramatically - and unfortunately not in our favour. For organisations like Local Welcome, which have traditionally relied on grants to keep vital community work going, the funding climate has become increasingly competitive and challenging.

Some common responses we've had from funders for recent unsuccessful applications have included:

“We’re experiencing unprecedented demand for funding.” 

“The trust receives far more requests than it can meet, even when the work aligns with our criteria.”

“We do not have capacity to provide individual feedback due to the high amount of applications we receive”

This sense of increased competition is not just anecdotal. Grant-making foundations report a 30–50% surge in applications, with some seeing their numbers double. The result? Fewer awards, longer odds, and more charities left struggling to meet their costs.

What’s behind this funding crunch?

  • 📉 Shrinking Statutory Support: A £1 billion cut in government funding has left a gaping hole in support for vulnerable groups. More charities are chasing fewer pots of money.

  • 💸 Cost of Living Crisis: Individual giving has gone down since the pandemic. Only 50% of UK adults donated to charity in 2024 - 4 million fewer than in 2019.

  • 🌍 Global Instability: The pandemic, conflict in different regions of the world, and global economic volatility have squeezed both public and private giving.

  • 📈 Rising Costs: Charities face higher operating costs and growing demand, pushing fundraising targets even higher and increasing competition for funds.

So the climate is particularly tough at the moment. And within this context we’re a  unique organisation trying to bring about change in ways that don’t always grab the attention of funders. For charities working with refugees and asylum seekers, many funders focus on intensive, specialist casework - legal aid, housing, trauma support. These are essential services, but they’re not the only way to make a difference. 

We offer something different: a warm, community-led approach that fosters belonging through shared meals and storytelling. It’s not about solving individual crises - it’s about preventing isolation and building a network of welcome. This kind of social cohesion is powerful, but it doesn’t fit neatly into conventional metrics. Funders often want hard data: how many people got jobs, housing, or advice. As anyone who has attended a Local Welcome meal will know, the impact of these, where friendships are formed, confidence is built, and barriers are broken, is real.  However, these outcomes - though important and valuable - are less quantifiable (though we think we do a pretty good job).

So, what can we do?

Though we know the above sounds like bad news for Local Welcome, we remain optimistic about the potential alternatives we have to hand. Our strength is in growing our loyal base of members and supporters so we are less reliant on grant funding in the future. This is one of the reasons why we have launched our Support the Welcome campaign.

Our focus on the local and community make our work most attractive to local people and businesses who care about your community. Therefore, we’ve been exploring fundraising methods which each of our group’s local communities can get behind:

  • Asking members that can afford it to make monthly donations 

  • Getting support or sponsorship from local businesses where our groups are based 

  • Local fundraising events or group crowdfunding

Here’s how you can support our Local Welcome groups to continue cooking and eating together: 

  1. Support the Welcome by helping us grow to 100 supporters or 10 groups here.

  2. Attending meals but haven’t set up a membership donation you can afford yet? Set yours up here.

  3. Already donating monthly? Find out how to adjust your contribution here.

  4. Book onto a meal here.

  5. See where to follow us and help spread our message here.