An Increasing Number of Charities

The number of charities in the UK is growing. The number of general charities has increased significantly in recent years, rising from 120,000 in 1994/95 to 171,000 in 2007. This is partly due to government investment in the VCS due to its increased involvement in public service delivery.

What are the implications?

· More competition within the sector.
· Changes to levels and sources of income as the funding environment becomes more competitive.
· Blurring boundaries between sectors and an increase in hybrid charities.
· Growing numbers of duplicate or inefficient VCOs may lead to an increase in efficiency drives which may lead to procurement practices that favour economies of scale.
· Further polarisation of the sector as the income gap between small and large charities continues to widen, as larger charities are more likely to benefit from increased public service delivery.
· A wider variety of providers giving users choice and creating a variety of services.
· Increased pressure on organisations to demonstrate their outcomes and the difference they make.
· Effective organisations will be more likely to flourish in this environment where as less useful ones won’t.
· Increased public concern that there are too many charities leading to negative perceptions of charities.

Moving forward

In a more competitive sector, you may wish to think about your strategic position in relation to other players.

· Do you want to stay small and cover niche markets, or work towards targeting high volumes of clients to benefit from economies of scale?

Being clear about what you offer commissioners could put you at a competitive advantage. VCOs that are able to demonstrate the lasting benefits and distinctive value of what they do are more likely to secure funding.

· Does your organisation need to improve how it assesses and demonstrates the changes it makes?
· What strategies can your organisation put in place now to manage potential future changes in funding?

Efficiency drives are likely to push purchasers towards awarding fewer, bigger contracts.
· How can your organisation develop its negotiating skills to improve your discussions with funders and potential funders in order to secure funding in a more competitive environment?
· Do you have good systems in place to assess your outcomes, and the broader value you create (social, economic and environmental)?
· Can you diversify your income sources or work in partnership with other organisations?

Collaborative working can be highly beneficial for your stakeholders and avoid a duplication of services.

· Are there other organisations with different areas of expertise that your organisation could work with to complement your services?

Funders may increasingly require partnership bids in order to reduce duplication amongst services.

· Do you need to reconsider your strategic position in relation to other players in your area?
· What questions does your organisation need to consider before entering into a partnership with another organisation? (e.g. you may want to think about differences in organisational life cycles, cultures and aims).

Andy Guile

Want to know more?

Contact HVA, we can help you make the difference

Call (01928) 592405 or e-mail adam@haltonva.org.uk.