Lloyds Bank Foundation – ‘The Value of Small’ Report

Independent research reveals that when tackling
social issues like homelessness, domestic abuse or mental ill
health, smaller charities have a distinctive impact. They also
generate benefits through spending and investing more in local
areas; with some charities generating as much as three times more
in additional funding than their public funding.

The research highlights the significant
challenges facing smaller charities despite their clear
benefits for people and communities. There is a critical
mismatch between what smaller charities do and the people they
help – which public bodies should find attractive – and how public
bodies actually fund, commission and contract services and measure
value, which instead favours larger providers. As a result 84% of
local government funding is actually going to larger
charities.

The Value of Small  was commissioned by Lloyds
Bank Foundation for England and Wales and conducted by an
independent research team comprising the Centre for Regional
Economic and Social Research (CRESR)  at
Sheffield Hallam University; the Institute for Voluntary Action
Research (IVAR) and the
Centre for Voluntary Sector Leadership  at the
Open University. The researchers immersed themselves in four local
areas – Ealing, Bassetlaw, Salford and Wrexham – to carry-out
in-depth studies of small and medium-sized charities (those with an
income of £10k to £1m) tackling issues such as homelessness,
unemployment and helping refugees to integrate. Over 18 months they
analysed a range of evidence and spoke to more than 150
stakeholders to understand the distinctive contribution and value
of smaller charities operating at a local level and the challenges
they face.

The research findings show that smaller local charities combine
three distinctive features in how they support people and
communities, which sets them apart from both public-sector
providers or larger charities:

• Who smaller charities serve
  and what they do:  through plugging gaps
  left by other organisations; being the ‘first responders’ to people
  in crisis, and for creating safe, familiar spaces where people can
  receive practical support or be quickly linked to other local
  services because of the charity’s local networks.
• How smaller charities work: building
  person-centred relationships with clients for longer; being known
  for their ‘open door approach’ and understanding of local issues,
  and for being quick to make decisions because of flatter management
  structures. and reflecting more closely the diversity of their
  local communities through their staff and volunteers.
• The role smaller charities play in their
  communities: using their well-established and far-reaching
  networks to act as the ‘glue’ that holds communities together.

This combination of distinctive features in smaller charities is
greater than the sum of their parts and offers additional benefits
including: individual value for their clients, such as
building confidence and self-esteem to help them prepare for and
secure employment; economic value through charities
buying goods and services locally and added value through
recruiting more volunteers than larger charities and bringing in
new funding from trusts and others which typically can triple the
income they received from the public sector.

Lloyds Bank Foundation and the researchers behind ‘The Value
of Small’ are together calling for national and local action
to protect, promote and develop smaller charities to sustain their
distinctiveness including:

i. Action on funding: greater use of grants by
the public sector and that more flexible, accessible and
proportionate tender and procurement processes are used for the
contracts that remain;

ii. Action on social value: consistent and
effective implementation of the Social Value Act 2010 with public
bodies required to formally account for social value around a
broader definition that recognises the distinctiveness of smaller
charities;

iii. Action to sustain healthy local ecosystems:
preserving and protecting the role of smaller charities and the
long-term and trust-based relationships they generate.

Access the full report on the CRSER website  or for the
summary report click here.