Funding and Philanthropy in 2025: 5 trends to watch

2025 feels like it will be a seismic year and whilst it is hard to predict the future, we all want to be prepared for what is coming.

What are the biggest issues facing funding and philanthropy this year? I can see 5 key trends on the horizon: increased use of AI, the growth of impact investing, responding to government policy, a potential gentle re-opening to applications, and the continuing rise of funder collaboration.

How many of these may be semi-accurate predictions and how many may be wishful thinking, I leave up to you to decide! Maybe some of you will be reading in 2026 and will know how it all turned out.

Increased use of AI

In the UK, several well-known and large funders have recently said they are happy for applicants to use Generative AI tools like ChatGPT to help write with their applications. I imagine that, in part, funders are bowing to the inevitable.

This is likely to be just the first step in how AI will affect funding and philanthropy (and everything else).

Depending on how much you expect greater use of AI to lead us closer to tech utopia or ‘The Terminator’ films, you may feel differently about this. But it will change things.

David Knott, CEO of The National Lottery Community Fund, described AI as ‘not just another operational challenge’ but ‘he defining strategic issue of our time’.

I expect this year we will start to see more and more how it will impact all other aspects of the funding cycle.

The growth of Impact Investing

The size and importance of the impact investing market has continued to grow.

To me, it feels like the market is moving from ‘early adopters’ to ‘early majority’ in the innovation adoption curve. Essentially, it’s close to being an idea that the majority of people understand and accept.

Investors will increasingly take a ‘total impact approach’ and ensure their endowments are delivering impact and not just financial returns.

With the increase of organisations looking to provide funding in this way, I hope more can be done to support impact organisations to access different forms of funding – so many are used to grant funding but may need support to access investment.

I often hear social impact organisations say there ‘isn’t any money out there’. But there is – it just might be from different places than they’re used to.

This is an important move for the sector which is finding funding hard to come by.

Responses to government policy

How funders and philanthropists respond to different government policies and the associated economic environment I will be a big part of the year ahead.

In the UK, we have seen the launch of the Civil Society Covenant – an attempt by the government at a new partnership with civil society to deliver the government’s missions. (For more, see our recent report with the Future Government Forum). More recently, we’ve also seen the Health Secretary re-ignite the debate about charities’ campaigning role (For more, see our response to the comments).

And then there is the US… A large percentage of the biggest funders in the world are based in the US and parts of civil society in America feel under attack by the new government. Federal funding freezes and the attack on USAID are already having an effect around the globe.

American funders’ response will dominate the next four years in US philanthropy. That, in turn, will have major international knock-on effects.

A gentle re-opening to applications?

Last year, I wrote a piece trying to understand what was driving the trend of funders closing to applications in the UK.

Some closed due to changes of strategy and others closed due to being overwhelmed by the sheer number of applications being received.

That means that this year many may begin to re-open. It will be interesting to see how they have changed and what the knock-on effect will be for the levels of applications.

I’m hoping to take forward a project to understand this further. If anyone is interested (especially in funding this) then please do get in touch.

The rise of collaboration

Anything you read on how to fund effectively, how to really affect systems change, or how to make the biggest impact will highlight the importance of working in collaboration.

We have seen funders pool resources to tackle large-scale issues and ‘wicked’ problems. I expect this will continue to rise, especially in response to climate change.

I also think we will continue to see funders increasingly look to partner with the communities they serve and hand the power in decision-making back to them.

At NPC, we’re big believers in taking a systems change approach and would welcome the further development of this trend.

What do you think?

We’d love to hear from you about what trends you think will be most important in the months ahead. Let us know.