What’s the point of small charities?

As far as we are concerned, small charities are the point. For nearly 20 years we have specialised in supporting small to medium-sized charities because we think they are what makes our society and communities work, far more so than government, large charities or the private sector.

We’re not the only ones. The Lloyds Bank Foundation has been championing the value of small charities for even longer than we have and any thoughtful interrogation of Charity Commission report on the sector should leave no one in any doubt that small charities are the glue that binds communities together. They are more trusted, more agile and mobilise people in ways that no large charity ever can. 95% of registered charities are small. Between them they employ over 1 million staff and benefit from a staggering 13 million volunteers. They motivate and support people to give of their time and skills like almost no one else can (certainly not at the same scale). This was so amply demonstrated during the Covid-19 pandemic, when small charities “showed up and stuck around”, while public services and many larger organisations simply hid in fear.

And yet, a recent report from Charity Excellence Framework paints a gloomy picture for the future of the small charity sector. The report lists several key threats including:

• Inequitable access to AI and other technologies (at a time when funding and service delivery are increasingly reliance on technology).

• Structural barriers to engagement in public sector commissioning, compounded by continued falls in public sector grant funding.

• Relentlessly declining resilience as reserves vanish in the face of one fundraising crisis after another.

• Rapidly rising demand for support as the thresholds for accessing public sector services continue to rise.

• Higher operating costs.

• The continued decline of local infrastructure support (small charities typically find national infrastructure support to be irrelevant to their needs).

To this we would add our favourite gripe - an increasingly and overly complex legal and regulatory regime policed by unpredictable and inconsistent regulators - and a crisis in mental health and wellbeing amongst charity leaders.

There’s a lot of talk about the value of small charities but, for example with less than 3% of small charities feeling that the Charity Covenant will deliver real impact, there is a real risk that’s all it will be, talk.

Unusually, we are not brimming with ideas for reversing what the Charity Excellence Framework calls “a sector in prolonged decline”. We’ve written recently about the need for charities to innovate and work smarter and the benefits that collaboration can bring. We’ve also written about the potential value of mergers, but if this is the silver bullet then the inevitable conclusion is that there won’t be any small charities in the future, just medium sized and larger charities.

Charity Excellence Framework promote the value of local infrastructure support, but this appears to be in almost terminal decline as local authorities withdraw support.

In our view, a more likely solution will be for the larger charities to lean in to provide infrastructure support for the smaller charity sector (which after all is the breeding ground of the charity leaders of the future) and to partner with small charities to ensure truly sensitive local delivery. Some larger funders like Lloyds Bank Foundation, Esme Fairbairn Foundation and the Community Catalyst programme that we help to deliver, have been doing this for years. What the sector needs is much, much more of this.

We are ready to do our part and if you think we can help your charity please drop us a line.

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Want to find out more? Contact us at julian@almondtreeconsulting.co.uk to discuss your organisation’s needs.