What the funding landscape looks like for churches in 2026
Churches across the UK have entered 2026 facing one of the most challenging financial landscapes in decades. Repair costs continue to climb, major grant schemes are changing, volunteer numbers are shrinking, and competition for funding is fiercer than ever. But as fundraising expert Andrew Clark reminds us in our latest podcast, this year also presents an opportunity for churches to stop, rethink their approach, and build long-term resilience grounded in community need.
The challenges churches are facing
Rising repair costs and financial pressure
The cost of repairing, restoring, and adapting church buildings has risen dramatically. Although the types of projects haven’t changed “churches have always wanted to fix roofs, restore stonework, build new community centres,” but Andrew observes that costs have “increased, tripled, and quadrupled” over the last decade.
Industry data from the Building Cost Information Service (BCIS) supports Andrew’s view. UK construction costs are forecast to rise by around 15% over the next five years. [i]
For churches - many of which are listed buildings - these increases push even modest repairs beyond the reach of congregational giving alone.
A tougher more competitive funding landscape
“Funding for churches and Christian charities is incredibly tough,” Andrew says. “More churches are all competing for the same pots of money.”
This is echoed in national data from UKGrantmaking: over 14,000 UK grant-makers awarded more than £23 billion in 2023-24, but competition intensified and funders increasingly asked for measurable community outcomes and financial resilience. [ii]
Churches therefore need more than compelling projects, a compelling case for need, and increasingly, a strong plan for demonstrating sustainability beyond the grant.
The Listed Places of Worship Grant Scheme
The closure of the Listed Places of Worship Grant Scheme has also created a shift. The scheme allowed listed places of worship to reclaim VAT on their repairs and had been renewed by every UK Government since it was established in 2004.
In January 2025, it was announced that the scheme had been renewed until 31st March 2026 with a reduction in the budget and uncertainty beyond this date. This has been a major concern for UK churches, for which the scheme has been a lifeline for over 20 years.
More recently, the UK Government has provided some reassurance that the scheme is to be replaced by the new Places of Worship Renewal Fund, valued at £92 million [iii]. Although it is encouraging to see continued investment in our church buildings, a lot of questions need to be answered. For example, it looks like routine maintenance will not be eligible, marking a shift from the previous VAT reclaim-model and will require churches to review how this new funding structure aligns with their plans. And even more significantly, this funding will only be available to place of Worship in England.
Volunteering: a growing concern for churches
A challenge we're hearing more frequently is the declining number of volunteers and the significant strain this is placing on churches. Andrew highlights throughout the podcast how heavily churches rely on their volunteers.
A recent Benefact Trust survey completed by just under 500 Christian organisations (70% of which were churches) identified reducing numbers of volunteers as one of the key challenges our churches are facing. It directly affects a church’s ability to deliver projects, run fundraising campaigns, and maintain their buildings.
Our research is supported by official statistics from the UK Government’s Community Life Survey, suggesting that volunteer numbers have dropped and there are still fewer volunteers than pre-pandemic figures. [iv]
Reduced volunteer capacity increases project timelines, strains church communities, and risks stalling essential maintenance, making it more important than ever to prioritise feasible, phased, and well-supported plans.
How can churches adapt to a changing funding landscape?
Responding to the needs of your community
Andrew consistently emphasises that successful church projects don’t begin with buildings, but with people. He encourages churches to pause and understand the lived reality of those they support: “What are the needs and issues of our own church membership, our local community around us, and how can the church be part of a solution to those?”
He stresses that this shift - from what the church wants to what the community needs - creates more meaningful projects, stronger narratives for fundraising, and deeper impact: “That will give you the compelling narrative and reason why you’re doing this project.”
Whether a church is considering accessibility upgrades, warm‑space initiatives, a community café, or essential repairs, Andrew’s guidance is clear - projects should be needs‑led, not building‑led. Understanding and responding to local issues becomes the foundation for fundable and sustainable change.
Legacy giving: an untapped funding stream
Despite the challenges churches are facing, there’s reasons to be excited about new and emerging funding streams that have an incredible amount of potential.
Perhaps Andrew’s strongest point concerns legacy giving: “I’ve never heard a minister talk about legacy giving… but every other charity is doing it.”
He emphasises that if church members each left even a small percentage of their estate, “we would start to gather a pot of money” that could fund children’s workers, fix spires, and resource mission for decades.
Legacy giving is one of the most stable, growing income sources in the UK charity sector, and denominations like the Church of England provides resources and free will writing tools to support congregations. [v]
Unlocking the value of your church
Churches hold some of the largest, most flexible community spaces in their local areas. Andrew sees this as a massive opportunity for the future: “The USP of our churches is the great assets we have… the size, the scale.”
With accessible toilets, ramps, and heating churches can offer affordable, inclusive community spaces for events, classes, groups, and services. The Church Buildings Council encourages adaptive use to keep buildings open and sustainable. [vi]
As a grant funder, we’ve funded many projects that are not only creating thriving places of worship but are turning church buildings into viable businesses such as cafes, local shops, and youth centres.
“I’d like to see churches charging more for that privilege,” Andrew reflects on the value that churches provide communities and the need to charge more to ensure they stay financially viable.
A blended funding future
Andrew summarises by highlighting the importance of diversifying income streams. “Don’t purely rely on grants. Look beyond them. Blend your income.” This is a great way to access funding from many different funding sources but is also a more sustainable, flexible approach accounting for shifts in the funding landscape.
That blend may include:
- Local authority sources such as Section 106 and Community Infrastructure Levy, where churches can meet local infrastructure priorities. [vii]
- Major donors identified through relationship mapping and shared values.
- Mid-level giving campaigns with more tailored, personal communications.
- Legacies and planned giving.
- Building hire and social enterprises.
- Grants targeted at specific, well‑framed outcomes.
Challenge and opportunity side by side
The funding landscape for churches in 2026 is undeniably tougher - rising costs, funding uncertainty, fewer volunteers, and competitive grant-making. But there is hope and opportunity. Churches that root their plans in community need, diversify their income, embrace legacy giving, and unlock the potential of their buildings will be best placed to thrive.
The future belongs to churches willing to think creatively and use the resources they have with vision and confidence.
Benefact Trust is passionate about providing ongoing support for churches, and we’re continuing to evolve our grant-making to meet the changing landscape.
Read more about Benefact Trust’s church building grants programmes.
Explore our advice and support for your church projects.
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