Small charities missing out on council funding

Smaller charities are missing out on local government funding, despite often being the ‘first responders’ to help people in crisis, a new report has claimed.

The report entitled The Value of Small, which was commissioned by Lloyds Bank Foundation for England and Wales, claims 84% of council funding goes to larger charities, despite many smaller groups playing a key role in tackling issues like homelessness, domestic abuse and mental ill health.

The report also claims smaller charities create additional benefits through spending and investing more in local areas, with one charity generating £3.25 in value through volunteers per pound of funding, and others generating as much as three times more in additional finance than their public funding.

In particular, the report recommends a more consistent and effective implementation of the Social Value Act with public bodies required to formally account for social value around a broader definition that recognises the distinctiveness of smaller charities.

It also calls for ministers to preserve and protect the role of smaller charities and the long-term and trust-based relationships they generate.

‘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,’ said Foundation chief executive, Paul Streets.

‘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.

‘From Carillion, to Probation privatisation, to Grenfell Tower and now with this research, the evidence is overwhelming – big contracting doesn’t work and people and communities value small and local charities,’ added Mr Streets.

‘Yet too little has changed – this must now be a call to arms and action. 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. There is not a moment to lose.’

Chris Dayson from the Centre for Social and Economic Research at Sheffield Hallam and leader of the research team commented:‘The findings of our research support and strengthen the evidence base about the value of smaller charities by identifying three distinctive features – their service offer, their approach, and their position – and highlighting the vital role they play within ecosystems of local service provision.

‘The research has also, for the first time, made an explicit link between these distinctive features and the social value smaller charities create for individuals and the wider economy.’

To read the full report, click here.