Is Small Beautiful?

Is small beautiful?

Minerva has for many years worked almost exclusively with small charities. The most common definition of “small” is an annual income of £1.5 million or less – although The Institute of Chartered Accountants in England and Wales (ICAEW) classifies small charities as those having an income of £500,000 p.a or below.

At a recent charity-business meeting, I was surprised to hear so many local business leaders say that they would support small charities in preference to large ones because they perceived that more of their donations would reach a small charity’s beneficiaries than would be the case with a large one.

Many fundraising professionals have been making this point for years, but the lure of contributing to a national name is too great for many individual and corporate donors. On the other side of the coin, many charities look for partnerships with large household-name businesses, believing that as a result, they will receive more exposure which will in its turn encourages others to donate.

This view appears to be supported by the ICAEW’s report last April “State of the sector: what is the outlook for charities ?” This report claims that in 2022, large charities experienced a growth in both income and expenditure, in contrast with small charities whose income grew by only 3%, but whose expenditure rose by nearly 12%. Sounds familiar? Certainly, the report is reflected in the experience of many small charities with which Minerva works.

So what for the future ? Many small charities benefitted from the policies of the Blair government which saw the Sector take on tasks formerly carried out by the public sector. In one case, a charity supported by Minerva saved taxpayers £1.4 million in its first year of operating a new initiative it conceived which was backed by the government. Sadly, this project did not survive 2 subsequent changes of government.

It is clear that charities cannot take over from the public sector any more than they can from the private sector. But there are tasks which cost-efficient small charities can do better than other organisations. The question is: will they get government backing to do so?