Britain's biggest charities are grabbing an increasing share of
funding and freezing out their smaller counterparts, according to
a major new report.
Since the Covid pandemic of 2020-2022, the cash divide between
the Davids and the Goliaths of the voluntary world has widened
markedly, with the big charities up by £4.5 billion while their
smaller brethren have suffered revenue falls of £4.6 billion.
Public money is driving the income gulf with big charities
unfairly dominating contracts awarded by the Government and its
agencies, according to the report, Overlooked and
Underfunded, from the CSJ Foundation.
It finds that 85 per cent of all charitable income in England and
Wales goes to just 4 per cent of registered charities (the
biggest, national charities). The 16 largest charities –
which include the likes of Save the Children, the National
Trust and Cancer Research UK – have more money than
the combined income of more than 160,000 charities
with revenues under £1 million.
At the same time, funding is being diverted away from the vital
work of grassroots organisations, despite over a quarter of Covid
grants and contracts being awarded to small charities.
The report quotes evidence from local charities, including a
Midlands-based organisation, which told the CSJ Foundation:
“National charities apply for local contracts, thinking they've
spotted the golden egg and a chance to get more income. They
often end up getting the contract, putting local organisations at
risk or even forcing the closure of small local organisations and
then hand their contracts back, as they discover they cannot
deliver the contract after all. They simply don't have the
knowledge of the community or the knowledge of the constraints of
local delivery. Then, to maintain services local charities are
asked by the LA to step into the gap the national charity has
left; but at what cost?”
These smaller charities, often overlooked by national media,
account for 97 per cent of charity closures in the last 10 years.
The public are highly concerned about this trend. A poll
conducted by Whitestone Insight for the CSJ Foundation shows that
79 per cent of UK adults believe that small, local, charities
seem to be often overlooked and under-resourced.
The report argues that this could not come at a worse time. Small
and medium charities are struggling with increased local need
following the pandemic. It is clear that “post-pandemic the need
from communities for effective poverty-fighting grassroots
organisations continues to rise, but funding and other
opportunities are not increasing to meet this demand”, the report
says.
Average spending by small charities has risen by almost 12 per
cent since the pandemic, but their incomes have only risen by
around three per cent. A situation the report
describes as “unsustainable”.
The public is increasingly sceptical of the benefit of national
charities compared to small grassroots organisations. According
to the poll, only 20 per cent of UK adults trust large national
charities over small, grassroots charities and 76 per cent of
people say that local groups know their communities better than
larger, national, charities.
Most people also think that the Government's national policies
would improve if it listened more to grassroots
charities.
There is a great deal of concern that money is wasted at larger
charities, with almost three quarters of adults (74 per cent)
concerned that too much of the money donated to charities is
spent on administration rather than delivering vital
services.
The report sets out four ways forward for the next Government to
save local charity initiatives:
- Give due consideration to grassroots organisations (such as
small and medium-sized charities), when making contracting
decisions across all departments which award funding to
charitable organisations.
- Reserve a proportion of government grant-making for
grassroots charitable organisations, such as those classified as
small and medium-sized.
- Bolster private charitable investment match-funding
initiatives, where private philanthropy towards grassroots
smaller charities can be encouraged. Building on the DCMS
Community Match Fund initiative, rolled out during the pandemic.
- Give equal voice to smaller charities as larger charities
when government seeks to engage the sector in fact-finding
activities, roundtable discussions, and evidence gathering for
policy making.
Nathan Gamester, CSJ Foundation Managing Director, said:
“Small charities are being overlooked and many are at breaking
point. They face a crisis of funding because the system is geared
towards the big, national charities who hoover up public contacts
and grants.”
“When grassroots charities suffer, so do the people and
communities they serve. Income into big charities is increasing
while income to small charities is decreasing – at a time when
demand for services is rising significantly. This is
unsustainable and very worrying.
“Many national charities do good work. Yet, they are growing at
the expense of vital local charities. Simply throwing more money,
untargeted, into the charity sector will not help those most in
need, as the system clearly favours large ‘blue chip' charities.
It is small, grassroots charities embedded in communities who
need further support.
“The public know the value of their local charities and are right
to be worried that larger, potentially out-of-touch national
groups are taking resources that would be better delivered
locally.”
ENDS
For more information, contact:
Matt Walsh
Media Intelligence Partners
07754 786789
About the report:
This report investigates the state of the charity sector to
reveal how it works and how it is compromised. We have analysed
data from the Charity Commission, gathered data from government
departments through Freedom of Information requests, and
commissioned nationally representative polling to determine what
the British public thinks about the charitable sector. It follows
our 2023 series of Big Listen events, where we engaged with over
400 small charities from across the country, to better understand
their experiences.
Methodology Note:
Whitestone Insight surveyed 2,082 UK adults online between
12th and 14th April 2024. Data
were weighted to be representative of all UK adults. Whitestone
Insight is a member of the British Polling Council and abides by
its rules. Full tables available at www.whitestoneinsight.com
