Funding news

A third of Office of Third Sector grants were unspent in 2008/09 - 29 September 2009

Money for Grassroots Grants endownment match challenge and Futurebuilders returned to the Treasury.

The 2008/09 accounts for the Cabinet Office reveal that £13.8m of its £44.4m capital grants budget - almost a third - was not distributed.

The shortfall was due almost entirely to underspending in two key OTS programmes: the endowment match challenge - which includes £50m of the £130m Grassroots Grants programme - and the investment fund Futurebuilders.

The match challenge, in which the Government pledges to match every pound raised by local philanthropists, returned an underspend of £7.3m. The accounts attribute this to "economic conditions for local fundraising becoming increasingly difficult".

Futurebuilders experienced a £6.6m underspend, which the accounts say was "due to delays in third sector investment recipients being able to meet important conditions before the fund can be disbursed".

The underspend means 31 per cent of the Cabinet Office budget for capital grants went back to the Treasury.

Stephen Hammersley, chief executive of the Community Foundation Network, whose members deliver a significant share of the endowment programme, said he was not disheartened by the slow take-up of the scheme. "The programme has stimulated activity at community level to raise endowments," he said.

Cathy Pharoah, co-director of the Centre for Charitable Giving, said local philanthropy was suffering because big donors weren't confident about giving during the downturn.