Website URL
https://www.centreforsocialjustice.org.uk/wp-content/uploads/2024/05/CSJF-Overlooked_and_Underfunded.pdf
Community-based, grassroots charities are effective changemakers who address the root causes of poverty on a daily basis� They are the ‘glue’ that binds together communities across the country, able to support people facing the most complex and overlapping barriers to opportunity�
Yet, due to their size and their focus on delivery these small organisations are consistently unseen, underfunded, and their impact unrecognised�
The CSJ Foundation is fortunate to work with over 700 such outstanding poverty-fighting charities and social enterprises with a proven track record of supporting the most disadvantaged� These charities tell us that
they do this with the feeling of one arm (or both arms) tied behind their back, due in no small part to the current imbalanced nature of the funding landscape� When it comes to funding, 85 per cent of all charitable income in England and Wales goes to just 4 per cent of registered charities�1 Large charities dominate public contracts where we see an over-reliance on charities with a national reach, who can consistently franchise into new communities and are first in line for public funding regardless of track record of local impact�
When you look at the relationship between large charities and government for delivering frontline services, there seems little difference between this engagement and how the government uses professional outsourcing firms like Serco or G4S� The government issues high-value contracts for services to the same few big charities, who have increasingly distant links to the people the contracts are designed to help�
Post panedemic, expenditure outstrips income in small charities, as organisations respond to rising local need� This is clearly unsustainable as evidenced by the fact that small and medium-sized charities (under £1 million income), account for 97 per cent of charity closures in the last 10 years�2 Unfortunately, without a levelling of the funding landscape, there could be further increases in grassroots charity closures�
And yet, the importance of charities remains high as revealed during the pandemic, which showed the significance of charitable organisations� According to new polling for this report, over two-thirds of UK adults feel the pandemic highlighted the importance of the charity sector�
Over the past 24 months we have scoured the length and breadth of the country listening to grassroots charity leaders and the people these charities serve� A common message we hear is that public services are retreating, and local charities are being asked to fill the gap� But funding and other opportunities are not increasing to meet this demand�
Today the gap between the charitable haves and have-nots is in danger of widening, as income for the small charity sector has declined by £4�6 billion, compared with an overall increase in funding of £4�5 billion for larger charities�3
The situation faced by small charities today is perilous� Many are at risk of closure, too many have already been forced to close� The system in which they operate - the charity sector- no longer serves their interests� Change is needed� Without which the future of the sector will be dominated by a few mega charities with no room for the small, innovative, grassroots�
1 The Charity Commission, Registered charities in England and Wales, 2024� Accessed: https://register-of-charities�charitycommission�gov�uk/register/ full-register-download
2 The Charity Commission, Registered charities in England and Wales, 2024� Accessed: https://register-of-charities�charitycommission�gov�uk/register/ full-register-download
3 Civil Society, Charity sector income shrinks, 2024� Accessed: https://www�civilsociety�co�uk/news/charity-sector-income-shrinks-for-first-time-since- 2013-data-shows�html
Underfunded and Overlooked | Executive Summary 5
Despite the dominance of larger charities in the sector, there is an appetite for change amongst the general public as our new polling shows4:
• Only 20 per cent of UK adults trust larger national charities over small, grassroots, charities�
• 79 per cent of UK adults agree that small, local, charities seem to be often overlooked and under-resourced�
• 58 per cent agree that national Government policies would be more effective if they were more informed by small, grassroots charities� Just 7 per cent disagreed�
• 76 per cent say that small, grassroots, charities know their communities better than larger, national, charities�
• 71 per cent agree that a strong and sustainable charity sector is vital to the social and economic future of
the UK�
• 74 per cent of UK adults are concerned that too much of the money donated to charities is spent on administration costs rather than service delivery�
Addressing the imbalanced nature of the charitable sector would enable effective grassroots organisations to build on the impressive impact they already have� An impact which is acknowledged by both the Prime Minister and the Leader of the Opposition:
“Small charities are the unsung heroes on the frontline of our communities. We all rely on them, even if we don’t know they are there. Working in the spaces beyond government, making the places we live in better, helping people often in desperate need to improve their lives.”
Prime Minister Rishi Sunak, November 2023
“It’s people on the ground, people with skin in the game, who understand the problems best and have the best answers. The glue that bridges the gaps and binds government, business, and communities together. They reach into the places that the public and private sectors can’t.”
Sir Keir Starmer, Labour Party Leader, 20245
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�
This report follows our 2023 series of 7 Big Listen events attended by over 400 small grassroots charities,6 where we heard time and time again of amazing frontline organisations being overlooked and underfunded�
This report will also be followed by further in-depth reports from the CSJ and CSJ Foundation on the current state of the sector, what needs to change, and the positive impact that change would have�
https://www.centreforsocialjustice.org.uk/wp-content/uploads/2024/05/CSJF-Overlooked_and_Underfunded.pdf
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