New guidance for trustees was issued by the Charity Commission on 3 June 2026. This updated guidance shifts the focus from simply distributing funds to taking a more strategic, informed and impact-driven approach to grant-making. It sets out the key principles of effective practice, including establishing clear funding priorities, carrying out appropriate due diligence, and ensuring robust monitoring and impact reporting.
In summary, the guidance identifies:
- Clear alignment with purpose – ensuring every grant directly advances the charity’s aims, rather than funding activity on a more ad hoc basis.
- Better decision-making through due diligence – requiring appropriate checks on recipients so trustees understand risks and capability before awarding funds.
- Proportionate risk management – encouraging trustees to assess and manage risk thoughtfully, rather than avoid it entirely.
- Greater flexibility – such as allowing unrestricted grants to aligned charities, enabling recipients to respond to changing needs and cover core costs.
- Stronger monitoring and accountability – so trustees can track impact, learn what works, and improve future funding decisions.
Together, these elements support a more deliberate, evidence-based and adaptive approach, helping trustees maximise the impact of limited resources while remaining compliant with their duties.
The guidance highlights that additional care is needed when awarding grants to organisations that are not registered charities, as they are not subject to charity law. Trustees must ensure that any funding provided to such organisations is appropriately restricted.
Trustees should consider whether their grant-making framework remains fit for purpose in light of the new guidance. A review of funding priorities, due diligence procedures, risk management processes and impact reporting can help ensure that charitable funds are distributed effectively and in line with trustee duties. Our charities specialists would be pleased to discuss how the new guidance may affect your organisation.
To read the press release and full guidance, see the links below:
Press release: Regulator publishes new guidelines on grant-making as charity sector continues to feel financial squeeze – GOV.UK
Full guidance: Making grants to charities and other organisations – GOV.UK
If you would like to discuss anything mentioned in this article, please contact our charities team here.
This material is for informational purposes only and should not be relied upon as professional advice.
