Small charities are here to stay

Rita Chadha

CEO, Small Charities Coalition

Covid has changed the landscape for small charities. We need to seize the opportunity to create a brighter and bolder understanding of how small charities operate.

Let’s start from the basics: what is civil society? Is it the humanity between us, is it the kindness that defends us against isolation, is it Extinction Rebellion bullying us into becoming vegans, or is it the furloughed do-gooders entrapped in a prison of their own making via Mutual Aid?

The definition varies. But what is clear is that civil society is no longer the sole domain of ‘charities’.

Covid in this context has brought potential opportunities and challenges for small charities in particular. Of the estimated 178,000 registered charities in England and Wales, 20,000 in Scotland and 6,000 in Northern Ireland, the overwhelming majority – more than 90% – are small, with an annual income of under £1 million. Drill down even further, and the Small Charities Coalition’s 15,000-plus membership finds at least 44% with an income of under £100,000.

The pandemic has bought both challenges and opportunities. It seems crass to see the death of thousands as an opportunity, but the nature of the crisis has forced small charities in particular to seize resources and new ways of thinking that may have previously been resisted or slower to progress.

Key among these is the move to digital. The advent of the ‘Zoom era’ has brought with it a tremendous capacity to adapt. Small charities and especially trustees, previously cautious of video conferencing, have found themselves in the driving seat of online organising. There are still those that lack the technical capacity and confidence to drive their own ambition in excelling online, but that will come with time.

“The best thing the Government could have done from the outset is invest in IT for charities”

Conversely, digital has not replaced the need and desire for human connection. Many charities that rely on nuanced communication and non-verbal cues have struggled, and the variation in lockdown rules for divergent definitions of ‘support groups’ have made it clear that some services cannot simply pivot online. Alongside this, some charities have lacked the physical infrastructure – from access to quality broadband to IT equipment – necessary to delivering digitally. The best thing the Government could have done from the outset is invest in IT for charities, not the kind that pushes organisations to invent and reinvent new apps and services (although there is a place for that), but the very basic commitment to refurbishing IT equipment for use by charities and their beneficiaries. This would have propelled the levelling up agenda and been a boost for capacity.

The second key opportunity has been the return to basics for small charities. While demand for services has in many cases doubled, if not (as in our case) quadrupled, this has been an opportunity to address issues of basic good governance, robust financial management and quality people management. For many a small charity, the technical questions of how to govern during the pandemic were answered very well by the Charity Commission. It has forced those that had never taken more than a cursory glance at their governing document to examine it again and learn the detail. We may also be witnessing a new form of governance emerging, one that blurs the boundary between scrutiny and monitoring the objects of a charity, and hands on delivery. While this has often been the case in small charities, a new emphasis on ‘hands on trustees’, deputising for staff on furlough and pitching in with overstretched volunteers, means that we do need to revisit the basic principles of governance.

The pressures of the pandemic have also heightened tensions in our relationships. The stress of deciding priorities and trying to match scarce resources with need, often while working remotely, has meant some small charities struggling to resolve difficulties effectively. Requests for mediation have tripled to our helpdesk during the period. In a Small Charities Coalition (SCC) survey of 713 respondents, 90% of those involved with social change organisations felt there was no one in their organisation they could talk to about mental wellbeing. 58% felt trustees need more resources and support to talk to staff and volunteers about mental wellbeing.

At the same time, the social change sector’s approach to people management has been overtaken by world events. Black Lives Matter has propelled discussions about diversity into the forefront of every organisation’s consciousness. Yet, our collective understanding of equality and diversity has never been poorer. Too often public policy has blurred the line between the legislative framework of equality, and the cultural framing of diversity. Add in equity and what we have in the sector is a very confused and unclear space where equality and diversity are used interchangeably, and where performance and public acts of contrition are valued over meaningful and sustainable change. Two of SCC’s most popular courses recently have been ‘Diversity, Inclusion, Cohesion and Equality’ (DICE) for small charities and ‘Monitoring Equality and Diversity’. While demand has been high and take-up excellent, the sector still lacks the ongoing resources, personnel, time and funding to devote adequate attention to making change happen internally.

“For any organisation to face one deadline a week is stressful, but to face at its peak nine deadlines from different grants and governmental funders on the same day is a stretch.”

Which brings us neatly onto the primary issue occupying so many small charities, which is of course funding. Funding for most small charities has always meant a hand-to-mouth existence. Commonly organisations will just get over the joy of securing one funding stream, to find themselves propelled into the next anxious cycle of hope and despair, seeking new and continual funding. Small charities are in the business of hope, and so it is too that they often hope that some last minute funding will come to their rescue. And very often, like a knight in shining armour, it does, which is why many trustees (as weary and exhausted as they are) are still reluctant to wind down and formally close.

In a sense, the government and funders have also enabled this. The wide range of ‘Emergency Covid Funds’ has been extremely welcome, but badly coordinated. For any organisation to face one deadline a week is stressful, but to face at its peak nine deadlines from different grants and governmental funders on the same day is a stretch.

The funders’ Covid pledge has been invaluable in creating the right environment for small charities to pick up the phone, creating a more positive dialogue between grantee and funder. While funders, including the National Lottery Community Fund, were inching towards this previously, the pandemic has again forced new and different types of discussions.

Finally, whatever your governing structure, whatever your financial position, the key to making it or breaking it during the pandemic has been an organisation’s ability to communicate its impact and worth. For small charities this has been a particular challenge. We have seen government at the start of the pandemic embrace small charities warmly, but that has been superseded by activities that have sought to scrutinise charities for their commitment to their beneficiaries. The use of accountancy firm PwC to vet small charities applying to the National Lottery Community Fund for controversial and anti-establishment views was a big concern to many. The very nature of charities requires that we campaign and advocate for change. To be unflinchingly compliant and uncritical when public policy fails our beneficiaries is fundamentally at odds with the concept of public benefit as defined by many charity regulators.

To unleash civil society’s potential and recapture the place of charities within it, we need the boldness of ambition stemming from small charities, and a sense of purpose driven by a new understanding of the current structure and marketplace of public and private services.

To achieve this, we need three things.

First, it is essential for small charities to reconfigure their relationship to the public sphere. It is misleading to think always of small charities as being synonymous with the local. Varied discussions about democracy and devolution have placed small charities more commonly at the hyperlocal level, and they are well placed in many cases to serve as ‘key anchor’ organisations for local neighbourhoods. But there are also those small charities that work nationally and internationally, with very specific communities of interest. During Covid, the Small Charities Coalition has worked with a group of over a thousand small international charities that had been meeting on Facebook. Together they were small and mighty, but they lacked the connections and voice to effect the change they needed. They were shunned, largely by other, better resourced organisations. And so it was that the Small Charities Coalition established them as a registered charity. The requirement for a unified voice for the small charity sector working overseas has never been more needed.

Now is a moment for larger charities and smaller charities to develop a new shared ecosystem. There is, for example, huge potential in smaller and larger charities aligning their services to keep leisure centres open, as smaller charities have been better able to access funding for sporting activities but often have no place to run them. The same is true for larger arts institutions (the ‘national treasures’) that rely on the supply of beneficiaries from small charities for future talent and audiences. How different things would be if we could persuade the larger leisure centres and national art treasures to develop new financial partnerships, through the emergency funding available.

“Without a reliable and steadfast advocate in government, charities have been largely ignored and overlooked.”

We must also not lose sight of the fact that both sports and arts are under the auspices of the Department for Digital, Culture, Media and Sport, which in theory, if not in practice, is home to all things charity. Sadly, we have a government department that is unable to reach into the bowels of the treasury to make that all too crucial ask for more money, to enable the easement and expansion of the Gift Aid scheme, and to make the persuasive argument for changes to the furlough/Job Retention Scheme that would make it fit for purpose. Without a reliable and steadfast advocate in government, charities have been largely ignored and overlooked.

Secondly, there has been a lot of attention in campaigning circles during the pandemic to whether it is better to focus on the plight of those that we seek to serve, i.e. our beneficiaries, or to focus on the business and market model that makes charities unique. Why do we feel ashamed to speak of our own needs as organisations? Businesses don’t. Public bodies don’t. This speaks to a collective failure to better explain what modern day charity is.

For as long as we focus on charity being only about the most needy and vulnerable, we cap our own potential within the wider economy and community. The ability of charities to improve life has to be understood for its ability to reach and connect with a wider audience than just the most vulnerable.

Finally, we need small charities to fight for independence. Mergers and collaborations test the boundaries of the overvalued notion of ‘partnership working’. Discussions need to be driven from a place of ideals, not just aimed at continuing a functional existence. Cultural change occurs very slowly in the charitable sector. While small charities are highly agile, charities tend to cling onto a belief that the world around them is pickled in aspic. Again, Covid has challenged that, and we need to seize the opportunity to create a brighter and bolder understanding of how, where and when small charities operate. The new and improved version of the Social Value Act alongside changes to procurement could, in theory, allow for a real levelling of the playing field.

What we must not forget is that the act of establishing and running a small charity is for many people an act of volunteering. Running a small charity is a labour of love fuelled by a desire to change the world, to change the lives of others and in many cases to right injustices.  We need a modernised version of charity that sits in the real world of rapid change and contradiction, and that is alive to seeing itself as part of the solution to problems we have not yet envisaged.

Small charities remain resolute in their determination to be the change that their beneficiaries need. What they need is recognition, respect and reward. The public and government have in no small measure demonstrated that they recognise and value the work of small charities. The growth in social movements like Mutual Aid groups, many of whom want to repurpose to become ‘small charities’, has been testimony to the fact that small charities can reach where the state can’t. The number of new people approaching the Small Charities Coalition for advice on how to set up a social change organisation has remained largely unabated during the pandemic. There is reason to be optimistic that the model of small organisations does work and is very much needed. The challenge is that most people don’t understand small charities well enough to respect their worth. This is an act of public and personal education for us all. The key element that is lacking is reward.

The issue of funding will always be one where demand outstrips supply, but we can overcome this. We can use the new(ish) Social Value Act and more purposely develop partnerships between small charities themselves, between small charities and larger charities, and between small charities and other sectors. This is a big piece of work that requires an acceptance that small charities are here to stay.