Mapping and understanding funding flows
Last week (30 April 2025) NPC published a new report (commissioned by Lloyds Bank Foundation) which maps the funding landscape for voluntary organisations working in and around the criminal justice system. The report explores what funding streams from statutory and philanthropic funders exist, and how they reach voluntary organisations (predominantly charities). The research was developed using:
- quantitative data collection on a sample of 624 charities using Charity Commission and 360Giving data
- interviews with sector stakeholders (nine charities, five funders, and three advocacy and research organisations respectively)
- a survey completed by 55 voluntary organisations working in and around the CJS
- case studies conducted on 10 voluntary organisations working with women and racially minoritised people.
Funding flows into the criminal justice voluntary sector
Statutory funding makes up double the share of income for criminal justice charities than the wider voluntary sector. 57% of the total income of our sampled criminal justice charities comes from statutory sources, compared to just 26% for the wider voluntary sector.
Almost all statutory funding goes to larger charities. 94% of statutory funding goes to charities with annual incomes above £2m. Charities with annual incomes up to £500k received only 1.42% of statutory funding.
Trusts and foundations are the main source of income for ‘small’ charities (£100k-£500k annual income) and ‘medium-sized’ charities (£500k-£1m annual income) in our sample.
Micro-charities are underrepresented in criminal justice funding flows. Of the 624 charities sampled, 46% had annual incomes of less than £100k. For comparison, 80% of the wider voluntary sector is made up of these charities.
Only 3% of total income goes to criminal justice charities working with specific ethnic groups. Just 7% of sampled charities identified ‘people of a particular ethnic or racial origin’ as the beneficiary group they focus on.
‘Children/young people’ is the beneficiary group that has received the highest proportion of income over the previous five years.
The most common beneficiary groups selected by charities in the sample are the ‘general public’, ‘children/young people’, ‘other defined groups’, ‘older people’, and ‘people with disabilities’.
Around three-quarters (71%) of criminal justice charities in the sample work on ‘offender support and rehabilitation’. The remaining 29% are classified as ‘prevention and safety’. Education/training’ is the most common subtheme, both in number of charities and the proportion of total income.
Range of funding sources
Voluntary organisations often bring different funding sources together. Voluntary organisations are careful to detail their work in applications to align with the interests of specific funders, which is easier with multi-faceted support that ‘ticks a lot of boxes’. Many research participants applied across geographies, mixing funding from large national funders with local funding sources, such as prisons or councils. They also often leverage personal relationships with individual funding commissioners, especially prison governors and other staff who commission contracts.
Challenges
The most common challenge raised with pulling together different funding sources was the time required for non-delivery tasks, especially different application and reporting requirements. Many charities felt that some funders did not understand the criminal justice sector well. There was disagreement amongst research participants over the extent to which funders should focus on innovation, with many research participants feeling this distracted from ‘tried and tested’ approaches. Charities feel that one positive of bringing different funding sources together is less vulnerability to funders pausing support due to changes in priorities.
Funding gaps
Voluntary organisations found statutory funding often comes with ‘funding gaps’. The costs of delivering contracts were not always fully recuperated, leading organisations having to seek funding to cover gaps. Delays in receiving funding created cash-flow challenges for smaller organisations in particular. Voluntary organisations tended to be more favourable in their comments towards philanthropic rather than statutory funders. Voluntary organisations also highlighted difficulties securing funding for systems change initiatives due to a perceived hesitancy from statutory funders to support this type of work, primarily due to fears of conflicts of interest.
Inclusion
Voluntary organisations were generally supportive of a perceived increasing focus among funders on Diversity, Equity, and Inclusion (DEI). But research participants highlighted challenges experienced with funder approaches to DEI. These included not covering the associated costs of integrating an equity lens (e.g. adequately funding co-design and co-delivery processes) and grouping together different identities or characteristics into catch-all terms that can overlook diverse needs and experiences.
Particular challenges were identified by participants in relation to organisations led by those with lived experience of the criminal justice system, with previous convictions preventing individuals from delivering in prisons and potentially being prohibited from becoming charity trustees.
Barriers
Funders highlighted three key barriers to a better funding landscape:
- Changes in focus and personnel at the governmental level, such as changes in ministerial roles and year-on-year uncertainty around public funding.
- Differences between prisons due to the varying nature of relationships with prison staff (especially governors).
- Time and resource constraints, with collaboration between funders seen as a bonus on top of day-to-day work.
Recommendations
The report concludes with a number of key recommendations including:
- Funders should provide more opportunities for flexible and multiyear funding to reduce application burdens, cover non-delivery costs, and support organisational learning.
- Funders should commit to minimum standards of contracting, including covering the full costs of delivery.
- Funders should align on reporting requirements suitable to the size of grants and the specifics of activities, which would likely reduce the time spent for organisations without sacrificing rigour.
