Funding the underfunded environment: how to invest where it’s needed most

In this blog, Flora Charatan,  NPC Consultant, writes of the challenges of funding neglected environmental causes. 

Funders face a complex picture when deciding where to focus. As charities battle the economic headwinds of inflation and the cost-of-living crisis, and intertwined social and environmental issues rise up the agenda, it’s increasingly difficult to prioritise what to fund, or to assess need in one area of funding against another. Harder still is identifying new funding areas—the gaps and vacuums in the funding landscape which hide amongst information on the needs that are being addressed. If we could take time to explore these gaps, what would we find?  

This question was put to us by a new anonymous funder, who were interested in funding programmes advancing the public good that are overlooked by other funders. For their first round of funding, they identified Biodiversity and Climate Change Adaptation as a key area that needed more attention within the environmental funding landscape. The Charities Aid Foundation found that in 2023 just 4% of all donations in the UK went to conservation, the environment, and heritage cause areas, falling from 7% in 2021. Similarly The Environmental Funders Network estimates that less than 6% of giving by UK-based trusts and foundations goes to environmental issues. This is skewed towards 10 foundations which account for 69% of all environmental funding, and in turn, just 25 environmental organisations received 45% of all funding (out of a total 5,300).  

On average, environmental organisations receive grants of less than £10,000—often from a sole organisation —which implies the unsustainable and sparse nature of funding for environmental causes in the UK. Our own analysis found that the median size for a biodiversity-related grant is £1.6k. Certain regions of the UK are particularly underserved per organisation and per geographical area of nature to be protected, including Scotland, Wales, the North-East, and Island communities. 

With these gaps in mind, NPC supported the funder to identify the less ‘charismatic’ causes that could benefit from targeted biodiversity funding across the UK, from species-level interventions (such as fungi and seagrass) through to interventions at ecosystems, landscape management and policy levels. 

Here are three things we learned:  

1. A reliance on figures indicating species decline and the deterioration of natural areas to evidence funding need should be balanced with more systemic understandings. There are many ways to conceptualise environmental need, with a variety of impact stories to share with funders. But advice from leading experts at the Wildlife Trusts, the Wildlife and Countryside Links, and the Environmental Funders’ Network led us to look for programmes with the potential for long-term, systemic, and landscape-level impact which may not see tangible results for many years. 

2. Environmental charities tend to be smaller, underfunded and overstretched. Our research found that the amount of funding received per environmental charity and geographical area is uneven and out of sync with evidence of funding need in the UK. When conducting due diligence on environmental charities, funders should be mindful of their resources and capability to evidence impact, which may rely long term outcomes. We used our What Makes A Good Charity framework as a cornerstone for due diligence, whilst applying our latest guidance on how to embed DEI into your grant-making cycle to ensure an equitable approach to charity shortlisting and funding recommendations.  

3. Open, trust based conversations are critical to a new funder’s learning and developing a sustainable relationship with charities is key. Lesser-known, smaller charities not used to receiving approaches from interested funders may need more support and reassurance in accepting donations, as well as the space to share where, based on their deep knowledge of the sector, investment is most needed within their charity. The Charity Commission has accused some charity trustees of ‘personal squeamishness’ around accepting donations and this power dynamic should be mitigated through an open and trust-based dialogue between charities and potential funders, as Kate Symondson recently highlighted in a guest blog for NPC. 

Being a new funder is exciting and daunting; identifying the ‘unknown unknowns’ in any funding landscape is complex but rewarding. NPC’s Everyone’s Environment programme is taking a systematic approach to the environmental crisis, working across strands to link up social and environmental charities on key themes.  

If you are a funder interested in joining the Everyone’s Environment programme, contact Liz Gadd. And if you want support in identifying the funding gaps that you could fill, contact our Research and Consulting team for more information.