Most small charities are facing funding challenges, if not crises, these days.
Is this the result of Brexit ? Or are people individually giving less to charity? Or is the corporate sector tightening its belt?
Martyn Drake, writing in Third Sector earlier this month, offers 3-4 options for charities suffering an income loss owing to the reduction in public funding. Cost reduction is the first option. Few if any would argue with the sense of this, but the truth is that the small charities Minerva works with have trimmed their sails dramatically in recent years and – at the risk of mixing metaphors – pared their costs to the bone. So probably not a lot more to be achieved there.
Martyn’s second option is expertise leadership, involving creation of a niche where the charity becomes the recognised authority. Fine in theory – but for most of Minerva’s clients, present and past, this isn’t a realistic option. What they do is to provide the basic needs of often disadvantaged, disabled or deprived groups as those groups’ needs dictate, offering a valuable and much appreciated service – but a service that is often replicated by other small charities up and down the country.
The third option is to replace public funding by funding from other sources. This is a message Minerva has been driving home for many years – even in the heady days when public funding for charities was seen as a never-ending cornucopia. The analogy of a chair is helpful: if you have a chair with 6 legs and 2 are removed, the chair can still be effective. But if the chair only has 4 legs to start with, removing 2 renders it useless. The more different funding sources a small charity has, the better able it will be to survive in an environment of diminishing public funds.
This is of course easier said than done. Although we are all supposed to give altruistically, the reality is that most corporate funders and many individual philanthropists want to see their names up in neon lights so that all can admire their generosity. This is easily achieved by the big national and international charities – but small, local charities can hardly compete.
The competition for funds from other sources such as grant-making trusts and the National Lottery has inevitably increased as public funding has reduced. The small charities which will survive are those which can compete not only in service delivery but in their acquisition of funding.