The Role of Growth and Financial Stability in English and Welsh Grant Allocation

The study “Rescuing the losers or betting on the winners? The impact of income growth and volatility on grant funding” by Alasdair Rutherford  and Astrid Pennerstorfer examines how a English and Welsh charity’s financial performance influences its likelihood of securing grant funding. Drawing on a unique dataset that combines foundation grant data with financial information from 5,693 charities between 1997 and 2015, the researchers analysed the relationship between income growth, income volatility, and funding success. The findings show that larger organisations and charities demonstrating positive income growth are significantly more likely to receive grants. The study also reveals that income volatility negatively affects funding prospects. In other words, organisations with less predictable financial performance may be viewed as riskier investments by grant-makers.