WHY THE CLOSURE OF THE SMALL CHARITIES COALITION IS A DISASTER FOR OUR SECTOR AND PROOF OF A COLLECTIVE FAIURE BY FUNDERS
When the news that the Small Charities Coalition (SCC) is closing first broke, people expressed a range of emotions: shock, sadness, gratitude for their help, concern for the grassroots charities they support.
This is all justified, but I think there’s been too much resignation (that this is just one of those things that happens) and not nearly enough anger.
I want to explain why this is a disaster - specifically for SCC and the many brilliant charities they support, but more broadly because of what it says about our sector and the lack of support for infrastructure organisations. This is a collective failure by grantmakers, resulting from short-sighted policy and too much ego.
First, a small disclaimer
I’ve been a pro bono trainer for SCC and general supporter of their work since 2015, so I can’t claim to be 100% neutral, although I should emphasise that we've never received any payment from our work with them.
Secondly, I don't have any knowledge of the inner workings of SCC, or exactly what they've done to try to secure funding. I'm sure there will have been things they could have done better or differently - that's the case for all of us - but I don't think that would fundamentally change what I want to say.
Why is infrastructure support so vital for charities?
The vast majority of charities and social enterprises are tiny organisations run by people with lived experience of the issues they’re addressing. I've personally worked with so many brilliant founders who have been full of knowledge and passion, but who haven’t benefitted from professional training or the best education, don’t speak English as a first language, or have little money for professional development.
Inevitably there are times when they need expert support in areas outside their comfort zone - for example finance, fundraising or IT - but they don't have the budget to recruit a specialist staff member, or pay a consultant.
Sometimes they secure ad hoc pro bono support from an expert – frequently a wealthy person in the twilight of their career after spending 40 years making money in the finance and business worlds, often perpetuating the same social issues they now claim to want to solve. For obvious reasons, this isn’t - and shouldn’t be - a solution for everyone.
I’ve seen a few people argue recently that local infrastructure organisations can step up to the plate after SCC closes. Indeed I've come across some truly brilliant local services. Yes their support is excellent, and yes being localised is really valuable, helping to promote collaboration not competition between organisations.
But in my experience, the quality of local support can really vary, and funding for it can suddenly evaporate in the winds of political change. It certainly isn’t available to everyone, everywhere. Economies of scale mean that most local infrastructure organisations can’t offer the same quality and cost-effectiveness as a national organisation. Even if they could, they'll still eventually face the same funding realities as SCC.
So national infrastructure organisations like SCC are vital - but who can we rely on to fund them?
Certainly not this government, which has alternated between being antagonistic and totally disengaged with the charity sector. As austerity has bitten, charities have necessarily become more vocal about the injustice faced by vulnerable people, and this government has worked progressively harder to discredit and demonise charities in response. Think back to how Conservative MPs seized on things like the Olive Cooke scandal.
Not the general public, who realistically will never be engaged with the nuances of how grassroots charities should be supported. Especially not when, following the lead of the government and the right-wing media, most public focus has been on red herrings like how many pence in every pound charities spend on ‘admin’, or how much their CEO is paid.
This means we inevitably rely on grant funding - but funders haven’t stepped up to the plate
You could argue that it shouldn't be their responsibility, but then again, they’ve done it for countless other underfunded, niche and unpopular causes during a decade of austerity.
Funders are ideally placed to understand the value of grassroots charities, and the need to empower them. But astonishingly few have been willing to fund infrastructure organisations – and that’s due to short-sighted policies and too much ego in their decision-making.
People with far more authority than me, including Paul Streets and Jake Hayman, have long criticised funders’ obsession with short-term, project-based impact, at the expense of strategic support, movement-building and core funding.
This collective failure has gradually shamed grassroots charities into playing down their core costs and development needs, and systematically devalued learning, collaboration, professional development and long-term strategic planning.
So many times, I’ve had to persuade small charity CEOs that they can include a contribution towards running costs in their project budget, and they do deserve to pay themselves a salary for their work. They’re terrified that they’ll be judged and penalised by funders. And sometimes, they're right.
Contrary to what we’re often told, most grassroots charities don’t ‘waste’ money on salaries and running costs - they chronically underinvest in them. If, as a result, staff can’t or won’t pay for even low-cost training, infrastructure organisations like SCC can’t develop a sustainable business model – but they haven't been able to subsidise it through grant funding either.
"Oh sorry, we really value the work that you do, we just can’t fund it ourselves."
If a few funders say this, it’s their problem. But when almost every funder does, organisations like SCC fold, and that’s a problem for everyone.
SCC's closure is proof of this short-sighted grantmaking policy, but also problematic ego
Because well-funded infrastructure support does actually exist, just mainly in the form of Funder Plus programmes.
This sees funders often hand-pick a small number of their grantees to receive infrastructure support, mentoring or training alongside a grant. These charities aren’t the only people to benefit. Experienced consultants get to do exciting, generously-funded strategy and consultancy projects, either in-house for a funder or as a freelancer. I know, I’ve been one of them.
I’ve previously been an advocate for the Funder Plus model because, in isolation, it achieves badly-needed, often transformational impact for a few charities. But if Funder Plus support comes at the expense of funding for centralised infrastructure support for everyone, it’s part of the problem - expensive to deliver, only benefitting a few, and driven by ego.
"I want to decide which charities get support. I know best what types of support that people and organisations who are nothing like me really need. I want to see and shout about the tangible impact of my contribution, not fund an experienced, national organisation to do it at scale, for everyone."
If this sounds like harsh criticism, consider this: SCC supports over 16,000 members and their annual budget has never topped £400,000, only rarely exceeding £200,000. They might have survived with just four or five moderate multi-year grants from progressive funders, or a smaller contribution from a slightly larger number of funders.
That this has proved impossible is a damning indictment of our sector. How can you possibly argue that Funder Plus models achieve more impact and better value for money?
I’m painfully aware that this comes too late to save SCC. That’s already a tragedy - but if we don’t use it as a wake-up call, we'll be facing an existential crisis.
As a sector, we’re not so much shooting ourselves in the foot, we’re tearing out our own heart.
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