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Charities in crisis?

September 18th 2017

Victoria Winckler wonders if Wales’ third sector is fit for the future.

It’s become widely accepted that Wales’ charities are not very good at looking for funding. I’ve been to any number of conferences and events where the leaders of charitable foundations have commented at the small number and poor quality of applications coming from Wales. Wales’ third sector is accused of lacking vision and ambition, not presenting their case well, and being happy to live off state support.

This may or many not be the case. But whatever the state of the sector’s bids to the X Foundation, there are some sound reasons not to accept the arguments at face value. In fact, Wales’ charities and community groups face real challenges around their size and capacity, the availability of funding and the sometimes debilitating impact of relying on government cash.  Blaming them for their own weakness doesn’t help.

Size matters

Although there are around the same number of charities per 1,000 people as in England, as a whole the sector is quite different here.  Welsh third sector organisations tend to be smaller, with just 17 ‘major’ organisations and no ‘super-major’ organisations according to NCVO.   Wales’ third sector bodies are also heavily concentrated into certain types of activity – more than half of organisations are concerned with sport, community activities and religion according to WCVA.

Small can be beautiful. But small can also mean organisations lack capacity and expertise to implement vital programmes of change.  The vast majority of organisations simply cannot afford fundraising experts, impact analysts or change managers. A report commissioned by the Garfield Weston Foundation concluded that:

        “few [charities] have begun to identify action they need to take to change their … models”

Money matters

Charities – even the smallest – don’t run on thin air.  Although Wales has a proud record of individual giving, with eight out of ten people saying they give money to charity,  the amounts people give are much smaller not least because there is a relatively small number of very well-off individuals in Wales.

However we measure prosperity, people in Wales come at or near the bottom of the pile and people in London and the south-east come out at the top.   For example, the wealthiest quarter of people in the south-east on average have 60% more in assets than the wealthiest people in Wales.

Wales also has relatively few home-grown trusts and foundations which distribute funds.  The few that we do have tend to be small and some of the larger funders, such as Waterloo Foundation and the Ashely Family Foundation, earmark only a small proportion of their funding for Wales, if at all.  The third sector instead has to look to English or UK trusts and foundations, many of which do not understand the specific needs and circumstances of Wales and with which many do not have contacts.

It’s not surprising then that Wales’ third sector relies so much on funding from the Welsh Government, local authorities and health boards. For many organisations, it is by far the easiest source and one that is accessible and talks their language.

A poisoned chalice?

While government funding is clearly attractive, it can be something of a poisoned chalice.  Government funding to the third sector is shrinking dramatically – down 40% in five years according to WCVA. And it is also coming with increasingly demanding conditions, with sometimes considerable intervention by government bodies in charities’ affairs.

The irony is that this dependence can strip out third sector organisations capacity and skills, making it all the more difficult for them to develop the new ways of working that they need.

In an added irony, the third sector ‘infrastructure’ – a horrible word for the county voluntary councils and so on which support the third sector – is in the same boat. They do some great work, but their remit and funding are set by government too.

So many third sector organisations are in a really vicious circle. There isn’t a tradition of individual donations or trust and foundations funding so they look to the state. State funding affects their capacity and creativity. And so when that state funding shrinks, they find it doubly hard to adapt.

What to do?

It needs more than an online article to get the third sector out of this hole. But as a start the sector needs to recognise its deep structural problems and begin to take action – independent of the state – to solve them. That might mean some alliances with and support from philanthropists, trusts and foundations to support building real capacity. It means the sector professionalising, able to think about mergers and acquisitions, partnerships and investment.

It also means that people like you, reading this article, being willing to support Wales’ charities, including – I urge you – the Bevan Foundation. You can do it here.

Victoria Winckler is Director of the Bevan Foundation. This article is based on a presentation she gave to the UK Community Foundations conference on 12th September in Cardiff. 

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One Response to “Charities in crisis?”

  1. Richard Essex says:

    I generally agree with the contents of the short article. Local community organisations and charities do have problems in retaining any significant level of independence once they have become grant dependent on public sector sources in Wales, whether WG or local authorities. However, this also tends to be a similar situation fro third sector “infrastructure” bodies, who seem to be more concerned in protecting their future funding from public sources (WG / LAs) rather than meeting the needs of local communities / charities.
    I fully agree with the need for ‘scaling up’ on certain activities in terms of seeking financial support. However, models adopted in many other European countries ensure that the scaling up process is undertaken collectively from the ‘bottom up’ by local community organisations / charities, which enables them to retain a much higher level of control and power.
    I also agree that the local community organisations / charities in Wales need, through collective action, to take this agenda forward independently. This was an issue raised three or four years ago at a Financial Resilience event held in Cardiff, but never sufficiently followed up. Wales does have a number of community facilitators who are able to seek out various sources of social investment; and there are examples, particularly in the community renewable energy sector (for example), where significant funds have been raised from various sources to achieve community objectives. Therefore a capacity, and sources of expertise, exist in Wales to really effect change


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