A goldfish jumping to a bigger fish bowl

Small charities: a year on

By Guest contributor 16 April 2013

David Parish is Chair of the Hampton Fuel Allotment  Charity, which has an endowment of £45m and distributes £1.8m each year to individuals and organisations  in the London  Borough of Richmond.

Last year I wrote a blog about how changes to government commissioning were affecting charities, the small ones in particular. Looking back, I was somewhat pessimistic. It appeared that more attention was focused on the size of the organisation and on cost reduction,  than on the quality of the service, and the compassion and understanding of the area a local provider would deliver.

Small charities remain under pressure,  but over the past year several changes to legislation have helped. The EU has raised the threshold to Euro 250,000 for government contracts to meet the full EU Procurement rules. With many local authority contracts now sitting below this level, this should make it easier for smaller charities.

In addition, The Localism Act enables voluntary and community groups to express an interest in running a local authority service, and requires local authorities to carry out a procurement exercise for running that service. It also provides an opportunity for local community groups to bid to buy buildings or land listed by the local authority as assets of community value. More recently, the Public Services (Social Value) Act  came into force, which calls for public sector commissioners to recognise the social benefits beyond the primary purpose of the contract.

In the London Borough of Richmond, Hampton Fuel Allotment Charity (HFAC) and other organisations have had discussions with the local authority on ways to simplify the tendering process.  This has resulted in more straight-forward documentation and the local CVS running a number of courses to explain the tendering process. In cases where a charity is delivering a unique service, grants have been maintained to set against clearer outcomes and impacts. And where the tendering process has been delayed, interim grants have been given.  In a limited number of cases, HFAC has also been able to increase its grant to support key charities that have lost government or NHS funding.

Another encouraging trend has been for contracts to be split into areas that are within the capability of local charities to deliver.  This has resulted in local community groups partnering with charities affiliated with national organisations and bidding together. This will also enable these groups to make stronger cases to local grant making bodies.

In my business experience of procurement, I have found that local knowledge and experience often provide for better service delivery, outweighing any minor price differential in the bids. It is also hard to ‘commission compassion’. Local charities with local volunteers care in a way that is unique. They know and love the area and the people they serve, which commercial organisations and national charities find hard to replicate.

I am encouraged that small charities are also looking at more creative ways of fundraising; some are running shops or delivering services for which clients are willing and able to pay. Others ,where they can see other revenue streams, are looking at the Social Enterprise model.

Of course, this  places new demands on the trustees and staff of these charities, and creates the need for new skills.  I have heard of several that have advertised widely for trustees with a finance or marketing background and found it hard to find them. But despite this, I can see the majority of the charities HFAC supports continuing to develop and grow their work and increase their impact to benefit those they serve.