Unrestricted Funding: Who Gives It and How to Win It
Unrestricted funding lets a charity spend a grant on whatever it needs most, including rent, salaries and reserves, rather than a single named project. A small group of UK trusts, including the Esmée Fairbairn Foundation and The Fore, give it deliberately because they believe restricted funding starves core capacity. Winning it depends on showing what the whole organisation achieves, and being explicit about the core costs behind that impact, rather than describing one project.
Why unrestricted money matters
I see unrestricted funding from both sides: as the trustee who writes a small charity’s funding applications, and as the founder who read hundreds of funder pages while building CharityIQ’s grant-finder. Unrestricted funding is the only type of income a charity can move to wherever the need is greatest that year — a leaky roof, a finance system, staff retention, a cash-flow gap — and charities routinely report that restricted project funding leaves core costs, the rent, the CEO’s salary, the IT that keeps everything running, permanently underfunded. That is why unrestricted grants are prized above almost any other income type.
The scale of the problem is well documented. Analysis of grants published through 360Giving‘s open data standard has repeatedly shown that the majority of UK trust and foundation funding is restricted to specific projects, leaving a persistent minority genuinely unrestricted or dedicated to core costs. That gap is exactly why funders who deliberately give unrestricted money, and the charities that know how to ask for it, stand out. (We track this on our charity funding statistics page.)
If you haven’t already, read our companion piece on restricted vs unrestricted funding for the accounting and reporting basics before you start applying — this post assumes you know the difference and want to know where to find it. The wider strategy sits in our grant funding handbook.
UK funders that give unrestricted grants
UK funders that give unrestricted grants deliberately are a small, identifiable group: a handful of trusts and foundations known for core-cost and unrestricted giving rather than tightly scoped project funding. The smart move is to start your search with them rather than adapting a restricted application after the fact. The list below is a starting point, not a guarantee — always check live eligibility and grant bands before applying.
| Funder | Known for | Typical focus | Check before applying |
|---|---|---|---|
| Esmée Fairbairn Foundation | Large, explicitly open to unrestricted and core-cost funding | Arts, environment, social change, food | See funder’s site for current terms |
| The Fore | Unrestricted grants plus free business support for small charities | Small, early-stage charities and social enterprises | See funder’s site for current terms |
| Lloyds Bank Foundation for England and Wales | Multi-year unrestricted grants tied to organisational development | Small and medium charities tackling disadvantage | See funder’s site for current terms |
| Paul Hamlyn Foundation | Open, trust-based grants including unrestricted elements | Arts, education, social justice | See funder’s site for current terms |
| Tudor Trust | Long track record of unrestricted, relationship-led grant making | Small and grassroots organisations | See funder’s site for current terms |
When I shortlist funders for my own charity, names from this list go to the top, because a funder that states core costs are eligible saves you contorting an honest ask into project language. We’ve written a dedicated deep dive on applying to Esmée Fairbairn, including the expression-of-interest process and realistic odds, if you want to go further on the largest name on this list.
How to ask for core costs without scaring funders
You ask for core costs by naming them explicitly, tying them to outcomes, and never treating “unrestricted” as a blank cheque in your application language, funders that give unrestricted grants still want evidence that the organisation is well run and the money will be used deliberately. The mistake I had to train myself out of in our own asks — and the one I see everywhere — is vagueness, which reads as disorganised rather than flexible.
Practical tactics that work:
- Lead with outcomes, not costs. Explain what the organisation achieves overall, then show that core costs, staff time, premises, governance, are what make that possible.
- Give a real breakdown. Even an unrestricted ask benefits from an indicative budget showing salaries, overheads and a contingency, it demonstrates financial competence.
- Use your reserves policy. A charity with a clear, board-approved reserves policy signals stability, funders read a stated reserves target as good governance, not hoarding. For context, sector median reserves are roughly 3.9 months of spending (Clifford & Mohan, 2020).
- Show the track record. Cite prior unrestricted or core-cost grants and what they enabled, funders like Lloyds Bank Foundation and The Fore look for organisations that can demonstrate this money multiplies impact rather than plugging a hole.
- Don’t disguise a restricted ask as unrestricted. If you actually need money for one project, say so, assessors spot the difference quickly and it damages trust.
From experience: When I write a core-cost ask for my own charity, the indicative budget goes in even when the funder doesn’t ask for one — salaries, overheads, a modest contingency — because nothing reassures an assessor faster than an organisation that plainly knows what it costs to run. Small charities over-worry that naming the rent or a salary will put funders off; the funders that give unrestricted money are usually the ones most interested in whether you understand your own economics.
Full cost recovery vs unrestricted (when each)
Full cost recovery means building your genuine overheads into every restricted project bid so the grant covers its fair share of core costs, while unrestricted funding is separate money with no project attached at all, and most charities need both working together, not one instead of the other. Full cost recovery fixes underfunding project by project; unrestricted funding fixes it at the organisational level.
Use full cost recovery when a funder only offers restricted, project-based grants, build a realistic overhead percentage into every bid rather than absorbing the shortfall. Use, or actively seek, unrestricted funding when you need to invest in things no single project will ever fund: a new finance system, staff development, reserves, or simply surviving a lean year. Our full cost recovery guide covers how to calculate and justify your overhead percentage in a restricted bid — the full cost recovery calculator does the arithmetic — and pairs directly with the unrestricted-funding strategy on this page.
Reporting on unrestricted money
Reporting on unrestricted grants is lighter than reporting on restricted project funding, but funders still expect a clear account of what the money enabled, typically through your annual report and accounts rather than a bespoke project report — one less parallel reporting stream for whoever does the admin (at my charity, that’s me). Because there’s no ring-fenced spend to reconcile line by line, the report needs to work harder narratively.
What to include:
- A short narrative connecting the grant to organisational outcomes for the year, not just activity.
- Reference to the figures already required in your trustees’ annual report, most unrestricted funders are satisfied by a copy of your statutory accounts and a covering note.
- Honesty about what changed versus what you expected, funders that give unrestricted money tend to be relationship-led and value candour over polish.
What to do next
Start by listing every core cost your organisation currently absorbs without full cost recovery, then match that gap against the funders above and against any similar trust in your region or field. Use your reserves policy and annual accounts as evidence of good governance before you apply, and don’t submit a vague ask, be specific about what flexible money will let you do.
Find unrestricted and core-cost funders matched to your charity’s profile in minutes. Try the Grant Finder →
Frequently asked questions
Funders known for unrestricted or core-cost grants include Esmée Fairbairn Foundation, The Fore, Lloyds Bank Foundation for England and Wales, Paul Hamlyn Foundation and the Tudor Trust. Always check current programmes, as funders can pause, restrict or close schemes, verify live eligibility and grant bands on the funder's own site before applying.
Core costs are specific overheads, such as rent, utilities or finance staff, while unrestricted funding is any grant income with no conditions attached at all. Core-cost funding is sometimes still nominally tied to those named costs; true unrestricted funding can legally be spent on anything that furthers the charity's objects.
Justify core costs by linking them directly to outcomes, showing a real budget breakdown, and citing your board-approved reserves policy as evidence of financial discipline. Funders want to see that flexible money will be used deliberately, not that the charity has no plan for it.
Yes, several funders such as The Fore and Lloyds Bank Foundation specifically target small and early-stage charities with unrestricted grants alongside capacity-building support. Smaller organisations often have a genuine advantage here because their impact-per-pound is easier to demonstrate clearly.
Often yes, because fewer funders offer it and competition is higher, but it is not impossible; a clear, honest case built on outcomes and financial competence performs well. Building a relationship with a funder before applying, where the funder allows it, also improves your odds.