Do (small) charities really need Government grants?

Scarcely a week goes by without a small charity closing down somewhere in the UK. Frequently, the reasons for closures include the withdrawal, or severe reduction, of statutory funding.

This begs a question: why does any charity rely so heavily on statutory funding that it has to close when that funding is no longer available?

Many of the small charities Minerva works – or has worked – with receive no statutory funding at all. Some also have no paid staff. They raise what they need to deliver services to their beneficiaries via grant-making trusts, the National Lottery, the Landfill Communities Fund, individual gifts, support from local businesses and their own community fundraising.

At the other end of the scale, the charity Motability is entirely funded by Government (ie. the taxpayers) which perhaps explains how they can afford to pay their Chief Executive £924,000 per annum (source: Daily Telegraph). That’s about twenty times the typical chief executive’s salary in the small charities where Minerva is involved.

One consistent piece of advice Minerva gives all its clients is this: do not rely on any one source of funding – whether that is trust/foundation funding, statutory funding or the National Lottery. Putting all your fundraising eggs in one or two baskets is unwise, especially in the economic climate the UK is experiencing at present.

Statutory funding is great when its available. But when it is readily available – as it was at the beginning of this century – wise charities spread their fundraising and build up other relationships for the time when statutory funding is reduced or even removed. Sadly, the good times never last for ever!