21st Dec 2018

In early December I was invited to speak at a Lloyds Bank Foundation for England and Wales (LBFEW) event in Leeds, one of series around the country looking at findings from its research on the value of small local charities. LBFEW has been doing a lot to shine a light on this part of the wider charity sector, and it was great as a Community Foundation to participate since small, local charities are in our DNA. You can read all about the research here. I was asked to say how far the findings rang true for me, how they related to the environment in which I work, what we were doing in this arena and what I thought the lessons are for others.

Does the research ring true?

Professor Tony Chapman discussing Third Sector Trends research at a Community Foundation event in 2017.

Mainly, yes. There is something particular about charities that are small and local. It’s the combination that’s important (there are lots of small charities that are national or international in focus) and these organisations have distinctive value in building social capital. They perform a brilliant alchemy with tiny resources, including by leveraging volunteering. But this message about the value of small, local charities shouldn’t surprise us. After all, we want a vibrant local economy of sole traders and small businesses, right? Why would we not want the same in the charity sector?

I think there are some questions about how we define small. The research covers charities with income from £10,000 to £1m, which seems to me a big range. Thinking again of the private sector, would we apply the same ideas to a part-time window cleaner as to a PR firm employing 20 people? At the Community Foundation we fund more very small groups compared to other funders. And we’ve been researching the charity sector in North East England for over a decade via a programme called Third Sector Trends (and there’s comparable data in Yorkshire and the North West). That research shows that many groups with income £10-50k don’t seek grants from public sector or trusts and foundations, certainly not national ones. Why? Because they are more financially independent, they don’t employ staff and they work more informally. Their income is actually pretty stable over time, they don’t seek to work in partnership and they don’t prioritise their own development. They are about social capital and the voluntary instinct. So, in policy terms, we might more helpfully think about the groups which are starting to employ staff, run buildings and provide services – those over £50k income.

In the public sector whose role is discussed in the research, I mostly see people working in very, very challenging circumstances and trying to do their best. But we in the charity sector have to accept that much of what we’ve been used the local state doing hasn’t been a statutory obligation at all, it’s been discretionary. But I am worried that local government thinks there is a ‘magic philanthropy money tree’ to pick up the resourcing of all the things they can no longer do. But overall giving trends in this country haven’t shifted in decades, so all this can do is put more pressure on an already limited pot from donors and trusts/foundations unless more effort is put into growing philanthropy.

What are we doing at CFTWN to support small and local charities?

Beyond grants, we shine a light on vital causes through the stories we share about grantees, through education work with donors and through initiatives like our new giving circle for younger professionals which is exposing them to groups on their doorstep they had no idea existed. We also do the more formal research: we’re maintaining Third Sector Trends, and we produce Vital Signs reports on local needs and how they are being addressed.

In terms of particular funding, we are focusing particularly on charities roughly in the £50-500k bracket as we think they are under most pressure. For our most trusted grantees in this group, we’re trying to give more unrestricted long-term support. We’ve been funding some organisations for years. We know they do what they say on the tin. We’re also providing a programme to fund organisational growth and resilience in collaboration with County Durham Community Foundation, Northstar Foundation and the Mercers Company. And we’re trying to help with governance by running schemes to match people, especially younger people, with opportunities to give their time and expertise as trustees by using their skills pro bono.

What is needed from others to better support small local charities?

First, there are opportunities – if you look at what the recent civil society futures commission report says and the messages from the Charity Commission – there’s a push back to think about the small and local. We see this in our work in local philanthropy where people are inspired to help causes on their doorstep. But I think expecting national government to do much more is pretty futile right now. However, I think there is a role for local government. First, councils could do real asset transfers – not just long leases. Because if they put actual property and land on the books of small, local charities, imagine what additional alchemy those charities would be able to do – not just through grants, but also through social investment streams. Second, they could work with their local community foundations and others to encourage a new era of civic philanthropy. We’ve just finished a 3-week festival of giving and philanthropy in North East England and it’s striking how much of what people walk past every day owes its existence to philanthropy. I don’t for a minute want councils to start fundraising for their own work. But there is much they can do to help organisations like mine inspire and engage people in giving to local causes.

For other funders, three messages. First, can we please stop the impact nonsense? There is no easy way to draw lines of cause and effect between a grant we make – usually of a smallish amount – to a small local charity and then what happens to the people with whom it works. First, they’re doing all that alchemy with their resources in the first place, so we can’t disaggregate what one funder’s grant has done from, anyone else’s. Second, there are all sorts of reasons why a person’s circumstances change – some of which will be down to a charity with which they engage, but some will be down to for example, starting a new relationship or finding a job. Instead we need to look for the characteristics of good organisations and get on and fund them to do what they do best.

Second, and this is especially aimed at national funders (with LBFEW a notable exception!) please stop expecting innovation and excitement. Stop looking at things through a London lens. A local youth project in Byker or Moss Side or Gipton might seem pretty boring compared to a trendy group kicking off in Islington. But it may be the best thing to invest in in that community.

Third, share data more and more openly. We do so as part of 360 degree giving – as does Lloyds Bank Foundation. And open data is really about more alchemy. By putting that data as a resource out in the world, it can do good in ways we can’t imagine. One thing it could help with, for example, is the creation of peer networks when groups can see who else is being supported to do similar things by similar funders. It might just also help shift the power from funders back to the small, local charities making such a difference in our communities.

Let's talk

Subscribe to our mailing list

* indicates required