London-centricity: does place-based funding reach the communities that need it most?

The debate in brief

Charity funding in the UK is geographically concentrated to a degree that mirrors, and in some ways reinforces, the country's wider regional inequalities. London and the South East are home to a disproportionate share of the sector's income, infrastructure, and decision-making. The largest grant-making trusts and foundations are overwhelmingly headquartered in London. National charities, also predominantly London-based, attract the bulk of government contracts and major grants, even when their work is delivered in regions far from their head offices.

The question is whether this geographic concentration is simply a reflection of where institutions happen to be located, or whether it represents a structural bias that systematically underfunds the communities with the greatest need. And when national charities expand into local areas to deliver services, does their presence strengthen or undermine the community organisations already doing that work?

Quick takeaways

The arguments

The case that London-centricity is a structural problem

The geographic concentration of charity funding is not accidental. It is the product of where decision-makers sit, where networks form, and where the infrastructure of the funding system is physically located. The vast majority of grant-making trusts and foundations are headquartered in London. Government departments that commission services are in Whitehall. The professional networks through which funding relationships are built — conferences, policy events, sector bodies — are overwhelmingly London-based.

This creates a gravitational pull. National charities headquartered in London are better placed to build relationships with funders, respond to policy shifts, and influence commissioning frameworks. When a government department designs a national programme, it consults the organisations it already knows — and those organisations are, disproportionately, the ones with offices in the same city.

The consequences flow downstream. Locality, the national network for community organisations, has argued that this concentration means areas of high deprivation outside London are systematically underserved by the charitable sector. A community in Blackpool, Jaywick, or the former coalfields of South Wales may face levels of need that equal or exceed deprived areas of London, but the charitable infrastructure available to respond is far thinner. Fewer funders have local knowledge of these areas. Fewer grant programmes are designed around their specific needs. The funding that does arrive often comes through national charities delivering standardised programmes, rather than through the community organisations embedded in those places.

The case that national reach requires national organisations

Not all problems are local. Some of the challenges that charities address — cancer research, refugee resettlement, climate change, digital exclusion — are national or international in scope and require organisations that can operate at scale. A network of hyperlocal charities cannot run a national helpline, coordinate disaster response across regions, or fund clinical trials. National charities exist because national coordination has genuine value.

From this perspective, the location of a charity's headquarters is less important than where its resources are spent. A London-headquartered charity that deploys 80% of its budget in the North of England is contributing to regional provision regardless of where its CEO sits. The question should not be where charities are based but where their money goes — and large national charities often direct resources to areas of high need precisely because their national perspective allows them to identify and respond to geographic gaps.

There is also a practical argument about capacity. In some of the most deprived areas of the country, the local charitable infrastructure is thin precisely because decades of underinvestment have left few community organisations with the capacity to deliver complex services. In those circumstances, a national charity with professional infrastructure may be the only realistic option for delivering a service that local organisations cannot yet resource.

The case for place-based approaches

Place-based funding represents a fundamentally different model. Rather than funding individual organisations or projects, place-based approaches invest in the civic infrastructure of a specific area over the long term. This means supporting community organisations, building local leadership, strengthening networks between organisations, and allowing the community itself to set priorities.

Power to Change, the endowment-funded trust supporting community businesses, has demonstrated that locally-owned enterprises — community pubs, shops, energy schemes, and housing — can anchor economic activity in areas that mainstream markets have abandoned. Their research in "left behind" neighbourhoods showed that community businesses generate social value that national providers cannot replicate: local employment, community ownership, and democratic participation.

Locality has championed the principle that communities should have a meaningful say in how resources are allocated in their area. Their "Keep it Local" campaign challenged the assumption that national commissioning produces better outcomes, presenting evidence that local organisations deliver more responsive, trusted, and cost-effective services in areas including social care, housing support, and youth work.

The community foundation model — with 47 community foundations across the UK channelling philanthropic giving to local needs — represents one of the most developed place-based funding infrastructures. These foundations have local knowledge, established relationships with grassroots organisations, and the ability to make small grants quickly. Yet their combined assets remain modest compared to the largest national grant-makers.

The evidence

NCVO's UK Civil Society Almanac has tracked the geographic distribution of charity income over time. Its data consistently shows that London-based charities account for a share of total sector income that far exceeds the capital's share of the UK population. This reflects the concentration of large national and international charities in London, many of which deliver services elsewhere but report income at their registered address.

The National Lottery Community Fund publishes detailed data on the geographic distribution of its grants. NLCF data has shown that while the Fund makes deliberate efforts to distribute money across regions, London and the South East have historically received more per capita than areas of comparable or greater deprivation in the North and Midlands. NLCF has acknowledged this pattern and taken steps to rebalance, including devolving more decision-making to regional teams and setting explicit targets for geographic equity.

Lloyds Bank Foundation's research on place-based inequality in the charity sector found that the areas with the weakest charitable infrastructure often overlap with the areas of highest deprivation — a pattern the Foundation described as a "double disadvantage." Communities that most need charitable support are the least likely to have strong local organisations capable of attracting funding and delivering services.

Power to Change's research into "left behind" areas — defined as places with low social infrastructure, poor connectivity, and limited community assets — found that these communities had significantly fewer community organisations per capita than the national average. The research identified a correlation between weak civil society infrastructure and poor outcomes across health, education, and economic participation.

The Charities Aid Foundation's "Giving in Neighbourhoods" analysis examined charitable giving patterns and found significant geographic variation, with higher per-capita giving in London and the South East. This compounds the funding gap: not only do funders direct less money to deprived regions, but those regions also generate less voluntary income locally.

Current context

The levelling up agenda, which dominated UK domestic policy debate from 2019 to 2024, drew unprecedented attention to geographic inequality. However, its impact on the charity sector was indirect and uneven. Levelling Up Fund allocations were directed primarily at physical infrastructure — town centre regeneration, transport links, cultural venues — rather than at strengthening the civic and charitable infrastructure of underserved areas. Community organisations were largely excluded from the design and delivery of these programmes.

The UK Shared Prosperity Fund, which replaced EU structural funds, devolved some funding decisions to local authorities. In principle, this created opportunities for place-based allocation. In practice, many local authorities lacked the capacity or inclination to engage community organisations in the process, and the funding was spread thinly across a wide range of priorities.

Several major funders have made explicit commitments to addressing geographic inequality. The National Lottery Community Fund has restructured its decision-making to give greater weight to regional need. The Joseph Rowntree Foundation has focused research and funding on areas of persistent poverty outside London. Lloyds Bank Foundation continues to fund exclusively small and local charities, with a deliberate emphasis on reaching underserved areas.

Community foundations have grown in prominence as vehicles for place-based giving, with several — including the Community Foundation Tyne and Wear and Northumberland, and the Heart of England Community Foundation — managing significant endowments and distributing millions annually to grassroots organisations. However, the community foundation sector as a whole remains small relative to the scale of regional funding gaps.

The broader fiscal environment — austerity-era cuts to local authority budgets, the employer NIC increase, and cost-of-living pressures — has hit regional charities particularly hard. Organisations outside London have fewer alternative funding sources, smaller reserves, and less access to the professional networks that facilitate fundraising. The gap between London and the rest, already significant, is widening.

Last updated: April 2026

What this means for charities

For community and regional charities, the most important practical step is building relationships with the funders that have explicit commitments to place-based or regionally equitable funding. Community foundations, the National Lottery Community Fund's regional teams, Lloyds Bank Foundation, and Power to Change all prioritise local organisations in underserved areas. Smaller regional trusts — often less visible than the major national foundations — can be significant sources of funding for organisations embedded in specific places.

Regional charities should also consider collective approaches. Locality's network, the community foundation infrastructure, and regional voluntary sector bodies (such as VONNE in the North East or VOSCUR in Bristol) can amplify the voice of local organisations in national funding conversations. The evidence is clear that funders respond to coherent, evidence-backed cases about geographic need — but making that case requires collaboration.

For national charities operating in local areas, the question is whether their presence genuinely adds capacity or whether it displaces local provision. Where a national charity wins a contract to deliver services in an area with existing community organisations, it should ask whether a partnership model, subcontracting arrangement, or direct referral to local providers would produce better outcomes. The evidence from Locality and Lloyds Bank Foundation suggests that community-embedded organisations consistently outperform national providers on trust, engagement, and flexibility.

Funders hold the greatest leverage. Publishing granular geographic data on where funding flows, setting explicit targets for regional equity, devolving decision-making to people with local knowledge, and reducing application barriers for small regional charities are all concrete steps that shift resources toward the places that need them most.

Common questions

How much of charity funding goes to London?

Precise figures vary depending on how they are calculated. London-registered charities account for a share of total sector income that significantly exceeds London's share of the UK population — partly because many national and international charities are registered in London but deliver services elsewhere. The more meaningful question is where resources are ultimately spent, and the available evidence suggests that even after accounting for this registration effect, London and the South East receive more charitable funding per capita than other regions, particularly the North and Midlands.

What does "place-based funding" actually mean?

Place-based funding is an approach where a funder commits to investing in a specific geographic area over the long term — typically five to ten years or more. Rather than funding individual projects through competitive applications, place-based approaches support the overall civic infrastructure of an area: strengthening community organisations, building networks, developing local leadership, and allowing the community to set priorities. Examples include Big Local (funded by the National Lottery Community Fund), Power to Change's community business programmes, and various community foundation endowment strategies.

Do national charities parachuting into local areas cause harm?

This depends on how they operate. When a national charity enters a local area to deliver a service that no local organisation is providing, it can fill a genuine gap. The problems arise when national charities win contracts to deliver services in areas where community organisations already operate, effectively displacing organisations that have deeper community trust and local knowledge. The prime contractor model — where a national charity wins a large contract and subcontracts to local providers — is particularly contentious, as it can extract management fees from the area while adding administrative burden to the local organisations doing the actual delivery.

Why are some areas described as "left behind"?

The term "left behind" was popularised by the Local Trust and Oxford Consultants for Social Inclusion (OCSI) Community Needs Index, which identified areas characterised by poor connectivity, weak social infrastructure, and limited community assets. These areas — often coastal towns, former industrial communities, and rural areas — have fewer community organisations, lower civic participation, and less access to charitable funding than the national average. The research found that these factors compound: areas with weak civil society infrastructure tend to have worse outcomes across health, education, and economic measures.

Are community foundations the answer to regional funding gaps?

Community foundations are an important part of the answer, but they cannot close the gap alone. The 47 community foundations across the UK collectively manage significant assets and distribute substantial sums to grassroots organisations annually. They have the local knowledge, relationships, and infrastructure to direct funding effectively. However, their combined resources remain small relative to the scale of regional need. Community foundations work best as part of a broader ecosystem that includes national funders committing to geographic equity, local authority partnership, and community-led priority setting.

Has devolution helped regional charities?

Devolution has had mixed effects. In areas with established devolved structures — Scotland, Wales, combined authorities with elected mayors — there is some evidence that charities benefit from closer relationships with decision-makers and more locally responsive commissioning. However, devolution also creates complexity: different funding streams, different regulatory expectations, and different political priorities across regions. For charities operating across devolved boundaries, the administrative burden can increase. The overall picture is that devolution creates the conditions for better place-based funding, but does not guarantee it without deliberate effort to engage civil society in devolved decision-making.

Key sources and further reading

• UK Civil Society Almanac — NCVO. Annual data on the geographic distribution of charity income, the sector's regional composition, and workforce patterns across England and Wales.

• Keep it Local — Locality. Campaign and evidence base arguing that local organisations deliver more responsive, cost-effective, and trusted public services than national providers, with case studies from social care, housing, and youth services.

• Community Business Market Report — Power to Change. Annual analysis of the community business sector, including geographic distribution, financial sustainability, and social impact in underserved areas.

• The Value of Small — Lloyds Bank Foundation, 2023. Research on the distinct contribution of small and local charities, with evidence on geographic inequality in the funding system.

• Left Behind Neighbourhoods — Local Trust and OCSI. Research identifying areas with weak social infrastructure, poor connectivity, and limited community assets, and examining the relationship between civil society strength and community outcomes.

• National Lottery Community Fund regional data — NLCF. Published data on the geographic distribution of National Lottery grants, including analysis of regional equity and commitments to rebalancing.

• Giving in Neighbourhoods — Charities Aid Foundation. Analysis of geographic variation in charitable giving across the UK, examining the relationship between local wealth, giving patterns, and charitable infrastructure.

• Community Foundations — ukcommunityfoundations.org. The national network of 47 community foundations, providing place-based philanthropic infrastructure across the UK. Individual community foundation reports provide granular data on local giving and need.

• Joseph Rowntree Foundation — jrf.org.uk. Research and analysis on poverty and place, including work on persistent poverty in areas outside London and the role of civic infrastructure in addressing deprivation.

• UK Shared Prosperity Fund evaluation — Various. Emerging evidence on the impact of post-EU structural funding on community organisations and place-based investment, including assessments of local authority engagement with the voluntary sector.