As councils streamline and centralise funding, something important is at risk. Grants aren’t just transactions — they’re a craft built on local knowledge, trust, and human judgement. When small, community-facing grants are asked to move through big-system processes, the first groups to fall away are often the ones we most want to reach: volunteer‑led, emerging, place‑rooted organisations.

I’ve got around 22 years of grant-making experience, across local, regional, and national footprints. It hasn’t always been perfect grant-making — design flaws, funding constraints, and politics have all played their part. So, heaps of lessons learned…

Before I go on, and it’s worth saying plainly: any council that still invests in the voluntary and community sector deserves credit. That commitment really matters and does change lives for the better.

That said, there’s a trend worth pausing on.

Across local government, we’re increasingly seeing grants combined into single pots, governance streamlined, and delivery moved into central or commercial departments.

On the surface, this makes perfect sense: clarity, consistency, audit confidence, efficiency.

But there’s a quiet risk here — not about where the money goes, but how grant-making actually works in practice.

Grant-making isn’t just a process — it’s a craft

Decades of place-based funding evidence show that effective grant programmes rely on things that don’t always sit comfortably in portals or scoring frameworks:

  • Local intelligence about people, places, histories, and informal networks;
  • Trust-based relationships that encourage small or first-time groups to step forward;
  • Judgement in the grey areas, where some of the most valuable work sits;
  • Tolerance of uncertainty, allowing learning, iteration, and innovation.

This applies across all grant sizes — but it’s especially true at the smaller, early-stage end of programmes.

Research and evaluation consistently show that small, flexible grants punch above their weight in building confidence, social capital, and early capacity. These outcomes are often indirect, cumulative, and hard to measure in-year — but they matter hugely.

That’s why Community Chest–style funds exist at all — not as an add-on, but as a deliberate tool.

What happens when everything is standardised

Evidence from national and local evaluations suggests that when grants become more centralised and system-driven:

  • Applicant profiles shift towards larger, delivery-ready organisations;
  • Informal and volunteer-led groups self-exclude, rather than being formally rejected;
  • Innovation reduces, as risk tolerance narrows;
  • Place-specific nuance is lost, even when intentions remain inclusive.

Bodies such as the National Audit Office, the Local Government Association, and many foundation funders consistently stress proportionality — matching assurance, monitoring, and process to the size and risk of the grant.

When a £300 grant is asked to behave like a £30,000 one, the system may be compliant — but it’s no longer effective.

Trust is not the opposite of accountability

One persistent misconception is that relational, discretionary grant-making is “soft”. In reality, good grants programmes are both trusted and accountable.

  • decisions are transparent
  • judgement is documented
  • learning is shared
  • risk is understood, not eliminated

Crucially, trust expands reach.

Without it, funding tends to circulate among the same capable organisations — leaving exactly the groups we most want to engage outside the room.

A question worth asking

As more councils look to rationalise and centralise grants, the key question isn’t:

“Is this more efficient?”

It’s:

“What do we lose if grant-making becomes purely transactional?”

Because once local intelligence, trust, and discretion are designed out of a grants system, they are very hard — and very expensive — to put back in.

Part Two

Practical lessons learned from grant-making at scale

One size never fits all – Small grants don’t need big-grant processes. Checks and paperwork should grow with the size and risk of the funding.

Small grants only work if they stay small and simple – Once micro-grants start to feel complicated, volunteers and first-time groups stop applying.

Good decisions need judgement, not just scoring – Context and local knowledge matter. Frameworks help, but they shouldn’t replace human judgement.

Systems should support people, not filter them out – Online portals are useful tools, but they shouldn’t become the only way in — especially for smaller grants.

Distance matters – The closer funding decisions are to communities, the better they reflect real need.

Local knowledge doesn’t happen by accident – It takes time, listening, and relationships. If this isn’t resourced, it quietly disappears.

Who’s missing matters as much as who’s funded – It’s just as important to notice who never applies as it is to track who gets the money.

If we want local grant funding to reach the people and places that need it and protect innovation in our sector, we must make deliberate choices. Let’s keep processes proportionate, keep judgement close to place, and keep space for the groups who might otherwise never step forward.

Mark Reading, CEO 

Mark has over 20 years of experience in the third sector, working in both infrastructure and funding roles. He has previously worked as a grants officer and grants manager at local, regional and national levels.