In June 2026, the Charity Commission published updated guidance on grant-making to help trustees make confident, responsible grant-making decisions.
The guidance replaces and expands on existing guidance to now cover all grant-making. Key changes include clearer confirmation that charities can provide unrestricted grants to charities with the same, or narrower, purposes than their own, as well as make grants to non-charities, provided trustees properly assess and manage the associated risks.
Grant-making charities number in the thousands and are a vital resource for the sector. In March, the regulator reported that grant-making charities awarded £17.84 billion in grants during 2024, up from £16.97 billion in 2023, including £12 billion to other charities, despite analysis indicating continued financial pressure across parts of the sector.
Key points from the updated guidance
Before approving a grant, trustees and management should confirm that they have:
Purpose & public benefit
- Checked the grant furthers the charity’s purposes as set out in the governing document
- Ensured the funding will deliver public benefit and not support other purposes.
Decision-making & process
- Agreed clear grant making priorities, criteria and decision-making processes
- Identified and managed any conflicts of interest.
- Kept an appropriate record of decisions and reasons.
Due diligence & risk
- Carried out proportionate checks on the recipient organisation, including whether it is a charity or not
- Assessed delivery, governance, financial and safeguarding risks
- Taken extra care and applied enhanced checks where risks are higher (for example, overseas or non-charity grants).
Grant terms
- Set clear written terms explaining what the grant can and cannot be used for
- Confirmed reporting, monitoring and clawback arrangements if terms are not met
- Restricted grants where required, particularly for non-charities or charities with wider purposes.
Monitoring & oversight
- Agreed how the grant will be monitored and what evidence will be required
- Considered whether the grant achieved its intended impact
- Taken prompt action if funds are not used as agreed, including suspending funding or escalating issues where appropriate.
Reporting
- Ensured grant-making policies and activity are appropriately explained in the Trustees’ Annual Report where grant-making is significant.
Next Steps
We recommend reviewing the updated guidance and using the points above as a practical checklist for your organisation. If you would like to discuss the guidance further, or would like support reviewing your existing processes, please get in touch with PEM.
Please note that this content is not intended to give specific technical advice. It is designed to highlight some of the key changes rather than provide an exhaustive explanation of the topics. Professional advice should always be sought before action is either taken or refrained from as a result of information contained herein.
