The Importance of Small Charities

I make no apology for returning this month to the importance of small charities (income under £1 million or under £1.5 million, depending on the methodology you use).

NVCO has just published its paper The Power of Small – the result of a collaboration with NAVCA and an 11-month programme of engagement with small charities and voluntary organisations, funders and “sector experts”.

Funding systems came in for particular criticism, specifically:

• A lack of unrestricted, multi-year funding
• Disproportionate application processes
• Funder-driven models.

At Minerva we see all these problems first-hand every week.

Unrestricted, multi-year funding

I have heard funders say bluntly that they would not give multi-year funding because it encourages small charities to sit back and not fundraise. If only!

The reality is that small charities need multi-year funding so that they can plan and deliver in the medium and long term, not just year by year. Fortunately, there are funders who do understand this, and more and more are offering the possibility of multi-year grants.

Unrestricted funding enables a small charity to move funds to where they are most needed – which may be different this year from what it was last year, and different again next year. In the battle for small charities’ survival, unrestricted funding is a critical weapon.

Disproportionate application processes

This struck a particular chord with me as earlier today I was involved in just such an application process. Despite the fact that the funder in question has already made 2 previous grants to one of Minerva’s clients, it still required a sheaf of documents which is should have retained on its database. Furthermore, the top grant available was well under £10,000, yet required the sort of detail appropriate for 6-figure sums !
Time spent in completing unnecessarily long and complex application forms is time which is not being devoted to a small charity’s beneficiaries.

Funder-driven models

It is understandable that funders wish to see their grants used in pursuit of their own aims, and as Chairman of a small grant-making trust, I have been tempted to follow this line.
But a responsible funder should be considering the needs and requests of small charities and, if necessary, place these above its own model. Fortunately, I have a team of tough and independent Trustees who ensure that we don’t divert the trust’s funds simply to areas which I consider important or with which I have particular empathy.

At the end of the day, all funders need to be aware of small charities’ requirements and – in particular – the requirements of their beneficiaries.