How National Lottery funding has changed

During the summer of 2023, grant giver The National Lottery Community Fund (NLCF) announced its first major overhaul of the way funding is handed out.

The NLCF’s funding strategy outlines its plans up until 2030 with a strong focus on using funding for environmental change in response to increasing concerns about climate change.

This is underpinned by a renewed set of missions focusing on improving communities, children, and young people’s lives, and the health of the nation.

There is also a fresh focus on boosting funding for small charities, including doubling the amount and length of grants they receive, a move widely called for in the charity sector.

This new approach is based on consultation carried out in 2022, which involved 18,000 interactions with communities, charities, and other stakeholders.

An overhaul to the NLCF’s funding strategy had been called for by government in 2022 in its response to a review of civil society carried out by Conservative MP Danny Kruger in 2020, which called for more local and community led distribution of funding.

Through the National Lottery more than £30m is raised each week for good causes in the UK. In 2022, the NLCF awarded more than half a billion pounds to charities and community projects.

Here we outline the main changes from this major backer of good causes and how they impact on charities.

Four key missions

Changes to funding have been announced through four key missions for the funder. These are:

• Supporting communities to come together
• To be environmentally sustainable
• Help children and young people thrive
• Enable people to live healthier lives

These are further underpinned by five key values for its funding to ensure it is inclusive, ambitious, impact focused, adaptable, and compassionate.

Improved funding for small charities

Increasing evidence is emerging of the benefits for charities of flexible and unrestricted grants available for them to spend over a longer period of time.

The NLCF has sought to address this need, particularly for small charities, as well as its mission to support communities, by increasing grants available through its National Lottery Awards for All scheme from £10,000 to £20,000.

In addition, grants through this scheme will be available for two years rather than one. These changes come into force from Autumn 2023 and increases the funder’s investment in grassroots organisations to more than £1bn until 2030.

Typically, its funding will be for between one and five years, with the NLCF’s strategy pledging “flexibility to support some projects and approaches targeting longer-term or transformational change up to ten years”.

Also £15m has been earmarked for a newly created connecting communities programme to support local organisations. This launches in 2023.

“Our new strategy will see us turbo charging our support for grassroots projects while also focusing our funding fire power on four of the big social issues facing the UK and its communities today,” says NLCF Chief Executive David Knott.

“Why? Because the money we plough into grassroots reaches the most people and mobilises the most volunteers out of all our funding, and because we’ve listened carefully to different communities and stakeholders to understand where our grants can make the biggest impact.”

Green funding prioritised

The commitment to promote environmental sustainability is being backed up through an extra £9m in grants to be available through the NLCF’s Climate Action Fund. This takes its total investment in environmental causes to £35m in 2023.

Priorities within this green pledge include reducing carbon emissions and negative environmental impacts while supporting schemes that promote positive environmental attitudes. The funder also wants to “establish equality of access to the national environment” as well as “improve the quality of natural spaces”, according to its strategy.

Extra funding is certainly needed: as of summer 2023, the Climate Action Fund has been subject to “a high number of applications”, according to the funder.

The NLCF has also promised to embed support for environmental action across all its funding as well as for specific projects to tackle climate change.

Children and Health

Supporting good causes that improve children’s lives is a key aspect of the NLCF’s new funding pledges. This include creating opportunities for children and young people “from all backgrounds” to enjoy community experiences.

Helping young people shape decisions that affect them is another priority within this pledge. In addition, the grant maker wants to ensure children and young people have access to “safe spaces to play, participate, socialise and get support”, adds the new strategy.

Its pledge to improve the health of all people includes specific priorities to reduce health inequality, increase opportunities for community participation to shape better health services and to take a preventative approach to health.