There are new funding rules from major grantmakers for NGOs and NPOs: what’s changing, where these rules come from, and why they matter for your organisation’s funding strategy.
Grantmakers are evolving their requirements and practices in response to shifts in global funding, economic pressure, and sector demands. Data from recent research shows grantmaking is increasing overall but with distinct priorities and conditions attached. Private foundations reported a 4.2% rise in total grant dollars in 2024, with midsize foundations increasing awards by more than 13%. This suggests more capital is available, but funders are targeting where and how they give. (Candid)
1. Trust-based philanthropy is becoming a defining model
A major shift is toward trust-based philanthropy, a set of principles and practices where funders reduce administrative burden and give NGOs greater freedom over how funds are used. Core elements include:
- Multi-year, unrestricted funding, so NGOs can plan and sustain operations without strict project scopes
- Fewer and simpler reporting requirements
- Deeper engagement from funders beyond grant checks
The Trust-Based Philanthropy Project and other coalitions have been pushing foundations to adopt these practices, and hundreds of funders have signed commitments to move in this direction. (Trust-Based Philanthropy)
Impact on your organisation
Under trust-based philanthropy, you may see:
- Requests for strategic plans, organisational impact over project deliverables
- Calls for evidence of organisational health and vision, not just a narrow project proposal
- Reduced burden on grant reporting and shorter application forms
That’s a clear break from older models where each funder demanded highly specific, restricted use of funds and heavy compliance documentation.
2. New reporting expectations through international standards
A major development with practical implications is the launch of the International Non-Profit Accounting Standard (INPAS). It is the first global accounting standard tailored to NGOs and nonprofits. It provides a consistent framework for:
- Breaking down restricted vs unrestricted funds
- Aligning financial reports across funders
- Creating harmonised grant reporting formats
Funders may begin to require or prefer INPAS-aligned reports as part of their grant compliance processes, especially in international contexts. That means NGOs should plan for financial reporting that works across multiple grantmakers without duplicative paperwork. (ICAEW)
Where these changes come from
These shifts originate from both sector-wide movements and practical responses to funding pressures:
- Donor networks and advocacy initiatives like the Trust-Based Philanthropy Project have mobilised foundations to rethink power dynamics in funding. (Trust-Based Philanthropy)
- Research and practice forums have highlighted inefficiencies in conventional reporting, driving interest in an international standard like INPAS to simplify grant compliance across jurisdictions. (ifr4npo.org)
- Broader economic trends and government funding uncertainty are pushing private funders to offer rapid response funding, emergency support, and unrestricted grants to stabilise NGO partners. (Funding for Good)
What this means for NGO/NPO strategy
To align with these new rules:
- Build financial systems that can produce clear, consistent reports across grantmakers, anticipating INPAS adoption
- Position your organisation for unrestricted or multi-year grants by demonstrating stability, long-term outcomes, and organisational capacity
- Reduce reliance on final-outcome metrics alone by emphasising your role in systems change, community leadership, and adaptive management
These trends are occurring globally and over the next few funding cycles will affect how funders evaluate and disburse grants. (Candid)
