Small Charity Week highlights the importance of small charities, the work that they do and their vital contribution to communities throughout the UK. This blog discusses the challenges and triumphs of these small charities in the current funding landscape from my newfound perspective as Grants Assistant at Pears Foundation.
Although I did not live under a rock whilst at University, and discussions around austerity had naturally become the basis of my Social Policy degree, until recently I had not realised just how severe an impact the cuts to public spending had been having on the voluntary sector.
Whilst keeping up to date with the news and changes within the sector, I had mainly been aware of the larger charities resilience, perhaps due to their ability to market themselves through the media, and as a result, had been fooled into thinking the whole voluntary sector was coping. Of course, once I entered the sector myself and began a career at Pears Foundation, I soon realised how ill-informed I had been.
Recent research commissioned by Lloyds Bank Foundation has found that small and medium- sized charities, with an income between £25,000 and £1m, have been hardest hit by cuts to funding of the voluntary sector since 2008. This research (disproving my originally naïve thoughts) has shown that there have been deep and long lasting effects due to the reductions in government funding on small charities.
The combination of cuts and changes to funding distribution for small charities is reflected in both the volatility of their finances, and in the sobering fact that more than 23,000 charities have closed since 2008. With statutory funding now shifted towards competitive commissioning and contracting, larger charities and private companies with more resources have come to dominate the market.
This funding landscape has fast become the ‘new normal’ for charities of all sizes but unfortunately, as research shows, the smaller charities have been the ones to lose out.
Despite survival tactics such as diversification of income streams, mergers and cuts to services, pressure has been continually rising for smaller community based charities as they are squeezed between austerity cuts and rising demand as more local authority services are being shut. A recent study by the Foundation for Social Improvement has found the increase in service demand is not showing signs of slowing down, with 60% of small charities reporting increase in demand from December 2015 to February 2016.
Unfortunately, our ‘new normal’ is disadvantaging these charities that make up 97% of the sector.
Here at Pears Foundation, we often provide unrestricted core funding for our partners. Not only does this help our grantees to cope with increasing service demand, but it provides smaller charities with a little extra freedom in their budgets. As a flexible funder, Pears gives charities the breathing space they need to build capacity and adapt to the funding landscape.
Pears Foundation is also proud to support charities such as Cranfield Trust and the Association of Chairs that, as well as being small charities are in their own right, are organisations committed to helping and supporting smaller charities to adapt and grow. They help to build capacity by providing much needed expertise, professional volunteers and support for charity chairs to effectively manage their boards.
Pears also supports small charities through the Foundation’s flagship project JHub.This residency programme for small start up charities supports the professional development and access to opportunities for its residents through seminars and organisation development consultancy .
Although partnerships with smaller charities can involve more time, support and advice in comparison to larger organisations, these locally based organisations that are closely connected to their service users are invaluable to their communities. Through their size and locality, these charities have the ability to be responsive and flexible to local needs getting to grips with the most intractable problems people face, all whilst operating in a highly challenging external environment.
As it is Small Charity Week I think this should not only be a time to reflect on the great work these charities are doing, but also a time to celebrate what they have achieved within the challenging funding landscape. I believe that in order to ensure that the figure of 23,000 small charities closing down does not continue to increase, we as a sector must continue to champion and support these charities so that they can continue the vital work that they do.