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Value of Small Charities in the Spotlight

3 July 2018 at 8:59 am
Wendy Williams
“Size does matter” when addressing complex social issues according to new UK research, which found small and local charities offered a range of economic and social benefits, prompting a call to arms to support small charities.

Wendy Williams | 3 July 2018 at 8:59 am


Value of Small Charities in the Spotlight
3 July 2018 at 8:59 am

“Size does matter” when addressing complex social issues according to new UK research, which found small and local charities offered a range of economic and social benefits, prompting a call to arms to support small charities.

The Value of Small, commissioned by Lloyds Bank Foundation for England and Wales, provides in-depth research into the distinctive contribution, value and experiences of small and medium-sized charities in England and Wales.

It found that when tackling social issues like homelessness, domestic abuse or mental ill health, smaller charities had a distinctive impact.

However researchers pointed to a “critical mismatch” between what smaller charities do and the people they help, and how public bodies fund, commission and contract services and measure value, which instead favours larger providers. Currently as much as 84 per cent of local government funding goes to larger charities.

According to the report authors, with the government currently consulting on its new Civil Society Strategy, the need for specific action at national and local level to support smaller charities is “urgent”.

Lloyds Bank Foundation for England and Wales chief executive Paul Streets said there was “not a moment to lose”.

“For over 30 years we have funded thousands of small and local charities knowing their work changed lives, but this research sets out why – they’re distinctive in who they serve, what they do and how they work. And this has real benefits for the people in need they serve, communities and the public purse. Yet so many small and local charities are under-pressure and under-funded from cuts and the rush to ever larger contracts,” Streets said.

He said the evidence was “overwhelming” – citing Carillion, Probation privatisation,and the Grenfell Tower – that big contracting doesn’t work and people and communities value small and local charities.

“Yet too little has changed – this must now be a call to arms and action,” Streets said.

“We will play our part in funding and supporting charities, but we call on government to put smaller charities at the heart of their new Civil Society Strategy and for local councillors and commissioners to change how they fund and commission. Supporting small and local charities is win, win.”

According to the research smaller charities generated benefits through spending and investing more in local areas; with some charities generating as much as three times more in additional funding than their public funding.

The research findings showed that smaller local charities combined three distinctive features in how they supported people and communities – their service offer, their approach, and their position – which set them apart from both public-sector providers or larger charities.

According to the research this combination of distinctive features is “greater than the sum of their parts” and offered additional benefits including: individual value for their clients; economic value through charities buying goods and services locally and added value through recruiting more volunteers than larger charities and bringing in new funding from trusts and others which typically can triple the income they received from the public sector.

Chris Dayson, Centre for Regional Social and Economic Research at Sheffield Hallam and leader of the research team said for the first time the research made an explicit link between these distinctive features and the social value smaller charities create for individuals and the wider economy.

“However, our research has also highlighted some major challenges that smaller charities face convincing funders of the need for and value of their work,” Dayson said.

“These challenges are heightened by the pressures of seemingly permanent austerity which have led to a funding environment that favours larger charities over smaller ones.

“In response, we call for strategic action – on funding, social value and sustaining healthy local ecosystems – that require a long-term commitment and investment by the public sector, independent funders and larger charities at a local and national level.”

Wendy Williams  |  Editor  |  @WendyAnWilliams

Wendy Williams is a journalist specialising in the not-for-profit sector and broader social economy. She has been the editor of Pro Bono News since 2018.

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