What Regranting Is and Why It Confuses People

TL;DR Regranting is when a funder gives money to an intermediary organisation, which then distributes it as grants to other (usually smaller) organisations. It is a common and growing practice in the UK funding landscape, but it creates confusion in data, accountability chains, and power dynamics. Understanding regranting is important because it shapes who actually gets funded, on what terms, and who makes the decisions.

Why this matters

If you look at 360Giving data on UK grant-making, you will quickly notice that some of the biggest recipients of grants are themselves grant-makers. A large foundation gives £5 million to a community foundation, which gives it out as 200 small grants of £25,000. A government department channels money through a national charity, which distributes it to local groups.

This is regranting, and it is everywhere. But it is not always visible. The original funder may report a single large grant. The intermediary may or may not report the onward grants. The frontline organisations receiving the money may not know where it originally came from. 360Giving has done significant work to make regranting more visible in its data, but gaps remain.

For anyone trying to understand the funding landscape, follow the money, or assess who is really making decisions, regranting is a concept you need to grasp.

The 5 things to know

1. The basic mechanics are simple

Regranting has three layers:

Original funder: The organisation with the money. This could be a government department, a large foundation, or a corporate funder.
Intermediary (regranter): The organisation that receives the money and distributes it onwards. This could be a community foundation, a national infrastructure body, a specialist charity, or a consortium lead.
End recipients: The organisations that actually spend the money on delivery. These are often smaller, grassroots, or community-based organisations.

The intermediary typically adds value by selecting recipients, providing support, managing reporting, and bringing local or specialist knowledge. In return, they usually retain a proportion of the funding (often 5-15%) to cover their management costs.

2. Funders use regranting for real reasons

Large funders use intermediaries because they solve genuine problems:

Reach: A national foundation cannot realistically identify, assess, and manage relationships with thousands of small community groups. An intermediary with local presence can.
Local knowledge: Community foundations and local infrastructure bodies understand their areas in ways that a London-based funder does not. They know who is doing good work, who is reliable, and where the gaps are.
Capacity: Processing hundreds of small grant applications requires systems, staff, and expertise that many funders do not have and do not want to build.
Speed: When money needs to move quickly, as during the Covid-19 pandemic, regranting through established intermediaries is faster than setting up new grant programmes from scratch.

The National Lottery Community Fund, for example, uses regranting extensively. So do many government departments distributing funds to the voluntary sector.

3. Common regranting structures vary

Not all regranting looks the same:

Community foundations: Locally rooted foundations that manage funds on behalf of multiple donors and distribute to local groups. There are 47 community foundations in the UK, collectively distributing over £170 million per year.
Themed intermediaries: Organisations that specialise in a particular issue area and distribute funding within it. Examples include funders focused on racial justice, environmental work, or youth services.
Consortium models: A lead organisation receives funding and distributes it to consortium partners, usually to deliver a joint programme.
Fiscal sponsorship or hosting: An established charity holds funding on behalf of a group that is too new or too small to receive grants directly. The host takes legal and financial responsibility.
Participatory regranting: Funding decisions are made by communities or peers rather than by professional staff. This is a growing area connected to the participatory grantmaking movement.

4. The advantages are real but so are the costs

Advantages:

Smaller organisations get access to funding they could never access directly
Local expertise improves targeting and relevance
Intermediaries can provide development support alongside funding
Funders can reach more organisations without scaling their own operations

Disadvantages:

Each layer takes a management fee, reducing the money that reaches delivery
The original funder loses direct relationship with end recipients
Accountability chains become longer and more complex
End recipients may have little voice in how funding criteria are set
Data and reporting become fragmented, making it harder to track impact

According to NCVO, the layers of intermediary funding in the UK system contribute to a lack of transparency about where money ultimately goes. 360Giving's open data standard has helped, but consistent reporting of regranting remains patchy.

5. Regranting is entangled with bigger debates

Regranting is not just a technical funding mechanism. It sits at the intersection of several major sector debates:

Power: Who decides where money goes? Regranting can either concentrate or distribute decision-making power depending on how it is structured. See Power dynamics in grantmaking.
Localisation: The push to shift power and resources closer to communities often relies on regranting as a mechanism. But badly designed regranting can create new gatekeepers rather than removing old ones.
Participatory grantmaking: Some regranting models give funding decisions to communities or people with lived experience. This is a deliberate attempt to address the power imbalance in traditional grantmaking.
Overhead anxiety: The management fees charged by intermediaries can trigger the same unproductive debates about overhead ratios that plague the wider sector.

Common misunderstandings

"Regranting is just a middleman taking a cut." This framing ignores the genuine value that good intermediaries add. Selecting, supporting, and monitoring dozens or hundreds of small grants is real work. The question is not whether intermediaries should be paid but whether they are adding enough value to justify their role.

"All regranting is the same." A community foundation distributing endowment income to local groups is fundamentally different from a national charity distributing government emergency funding. The structure, incentives, and power dynamics vary enormously.

"Regranting always benefits smaller organisations." In theory, yes. In practice, intermediaries sometimes gravitate towards safer, more established recipients because they face their own accountability pressures. The design of the regranting model matters more than the principle.

"If a funder uses an intermediary, it means they are lazy." Sometimes the opposite is true. Choosing to work through an intermediary can reflect a sophisticated understanding of the limitations of centralised decision-making. The question is whether the choice is made thoughtfully or by default.

How it works in practice

Here is a simplified example of how regranting typically operates:

Design: A large foundation wants to support community climate action across England. It does not have local presence in every region and does not want to manage 300 small grants.
Selection of intermediary: The foundation invites community foundations in six regions to act as regranting partners. They are selected based on local knowledge, track record, and capacity.
Funding agreement: The foundation gives each community foundation £500,000, with agreed criteria for onward grants, a management fee of 10%, and reporting requirements.
Local distribution: Each community foundation runs a local grants programme, assesses applications, and distributes grants of £5,000 to £50,000 to community groups.
Reporting: Community foundations report back to the original funder on what was funded, how money was spent, and what was achieved. Ideally, they also publish this data through 360Giving.
Learning: The foundation and intermediaries share learning about what worked and what did not, which informs future rounds.

At its best, this model gets money to places and people that a centralised programme never would. At its worst, it creates a bureaucratic chain where each layer adds requirements, delays, and costs without proportionate value.

What people disagree about

The fiercest disagreement is about who should hold decision-making power. Traditional regranting keeps power with professional grant-makers, just at a more local level. Participatory models argue that funding decisions should be made by the people closest to the issues. Both approaches have trade-offs and neither has an unambiguous evidence base.

There is also disagreement about transparency. Should intermediaries be required to publish all onward grants? 360Giving advocates for this, and many intermediaries now do so. But some argue that publishing data on very small grants to informal groups can create problems, particularly for groups working in sensitive areas.

Finally, there is the perennial question of cost. Critics argue that regranting creates unnecessary overhead. Advocates counter that the alternative, every small group applying directly to every large funder, would be worse for everyone. The honest answer is that regranting is more expensive per pound distributed but can be more effective per pound spent, if done well.

FAQs

Is regranting the same as subcontracting?

Not quite. Regranting typically involves an intermediary making independent funding decisions about which organisations to support. Subcontracting usually involves a lead organisation commissioning specific partners to deliver defined elements of a programme. The distinction can blur in practice, but the degree of decision-making autonomy is the key difference.

How can I tell if a grant I am looking at in 360Giving data is a regrant?

360Giving's data standard includes fields for identifying regranting, but not all publishers use them consistently. Look for grants where the recipient is itself a known grant-maker, or where the grant purpose mentions "onward distribution" or "regranting." GrantNav allows you to search by recipient, which can help identify intermediary organisations.

Do intermediaries have to be charities?

Not necessarily. Intermediaries are usually charities or community interest companies, but some regranting is done through social enterprises, local authorities, or other public bodies. The legal structure matters less than the governance, accountability, and expertise of the intermediary.

Is participatory grantmaking a form of regranting?

It can be, but it does not have to be. Participatory grantmaking refers to how funding decisions are made (by communities or people with lived experience) rather than the funding structure. Some participatory models operate through regranting intermediaries. Others involve panels of community members making decisions within a funder's own programme. The two concepts overlap but are distinct.

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