Underfunded and Overlooked

In 2023 we travelled the length and breadth of the country as part of our Big Listen series, speaking with hundreds of small, local, charities. Two key themes came up time and time again in these conversations; that excellent grassroots organisations feel their impact is overlooked both nationally and locally, and that they feel they can not compete for funding on a level playing field with larger, national, charities.

The funding and power imbalances within the charity sector, leave quality smaller charities with a proven track record of impact, without consistent access to public and private funding that would enable them to turbo-charge their impact, and without the recognition of their impact which would allow their work to be better supported and recognised.

It leaves great local poverty-fighting charities in a precarious position. Especially, as they tell us that grassroots charities are increasingly picking up where other services fail, but no funding or support is attached to this assumption.

The pressure on smaller charities is mounting of the 921 charities who have closed in 2024, 904 have an income below £1 million. Post pandemic we hear the need for grassroots organisations, from those who would benefit most from support, is rising.While funding and other opportunities are falling away. Ultimately, this rising pressure may lead to further closures of excellent local charities, who are so well placed to support the most vulnerable in society.

Funding in the charity sector is skewed towards those organisations at the very top. According to new CSJ analysis of Charity Commission data just 1 per cent of charities in England and Wales make up 75 per cent of the sector’s annual £90 plus billion income. Furthermore, the largest 16 registered charities in England and Wales have a larger combined income than the 160,000 charities with an annual income under £1 million.

We hear from our Alliance of small poverty-fighting charities that they often feel unable to compete fairly for funding streams, such as public contracts and grants. And as a result regularly miss out on opportunities to further increase their local impact. In turn, this affects the local communities they work with, as a charity that knows the community better than anyone remains under-resourced in the fight against poverty.

We also hear of frustrations around consultation of the charity sector, that regularly the insights of small charities are overlooked and the CSJF feels that national and local policy is poorer as a result. Grassroots organisations are perfectly placed to shape national and local policy, due to their knowledge of local communities, , and crucially their insights into what needs to change and how change can be carried out.

Our new polling, showed that the British public share our frustration that quality grassroots organisations are under-resourced and overlooked:

• 79 per cent of UK adults agree that small, local, charities seem to be often overlooked and under resourced.
• 58 per cent agree that national Government policies would be more effective if they were more informed by small, grassroots charities. Just 7 per cent disagreed and a further 35 per cent were undecided.

We are in a fortunate position at the CSJ Foundation, to work with the very best grassroots organisations every day and learn about the impressive impact they have on their communities. Yet, we are also deeply frustrated by what small charities tell us, that their work is often impacted by funding and power imbalances within the sector.

There is an opportunity for a more positive future, where grassroots organisations are able to compete for public and private funding on a more level playing field, their impact is more recognised and as a result their impact is turbo charged. But this can only be done by addressing the power and funding prevalent imbalances in the charity sector.