The majority of fundraisers have reported seeing a shrinking portfolio of trust and foundation grant prospects over the past year, a report has found.

Gifted Philanthropy’s annual Trusts and Foundations Insights survey found that 70 per cent of fundraisers said their portfolio of trusts and foundations prospects had shrunk compared with previous years.

The report, which is based on a survey of 155 fundraisers carried out in November and December, found that higher competition was a major barrier for fundraisers seeking trusts and foundations grants, with 82 per cent ranking this as their biggest or second-biggest challenge.

Funders changing their priorities to themes that affect an organisation’s eligibility was another barrier, with 81 per cent ranking this as their biggest or second-biggest challenge.

Funders taking longer to confirm grants was ranked as the biggest or second-biggest challenge by 44 per cent of respondents, while 29 per cent ranked internal pressures to grow income as their biggest or second-biggest challenge.

The report looked at the correlation between the number of grant applications submitted per year and the success rate experienced by fundraisers, finding that the success rate began to drop after approximately 30 applications sent per year.

The average success rate was at its highest for fundraisers who sent between 10 to 25 applications a year, which saw an overall success rate of 46 per cent – although this rose to 84 per cent for applications sent to a repeat funder.

The average success rate dropped to 26 per cent for fundraisers that sent more than 100 applications a year, although for applications sent to repeat funders this figure was higher, at 48 per cent.

The report says: “The importance of this is that it enables fundraisers, senior management and board members, to quantify success vs time spent with a higher degree of accuracy.”

More than half of respondents expected their income from trusts and foundations to either grow or stay the same this year, with just 12 per cent expecting it to decrease substantially. 

Of the respondents, 22 per cent said they expected their income from trusts and foundations to decrease slightly.

Konna Beeson, senior consultant at Gifted Philanthropy and author of the report, said: “The findings of our report back up what many trusts fundraisers today are feeling and facing – higher competition, shrinking pipelines, and funders changing criteria (or pausing funding rounds entirely) more so than in recent years.

"And yet, there is room for cautious optimism ahead, with more fundraisers forecasting growth or income to stay the same rather than decrease.”

Beeson said: “The critical finding from our report shows us quantitatively, that sending more applications doesn’t necessarily increase income – in fact, it can even be a detriment to growth. 

“By instead taking the time now to focus on a potentially smaller pipeline of highly relevant funders, giving them more time per application, and conducting meaningful relationship-building, we can not only mitigate these challenges but increase income as a result too.”