Is bigger a better charity?

It comes as no surprise that The 100 Most Valuable Charity Brands are comprised of the largest charities. But is bigger always better?

There is no right or wrong answer when it comes to the ideal size for a charity. However, the debate about whether some of the UK’s charities are too large has rumbled on through 2018 dividing audiences.

Despite charitable organisations in the UK numbering 160,000, approximately 60% of all UK donations go to the top 100, giving rise to a host of micro-players. It’s clear there is huge consolidation of value in charities, however small players are also thriving and increasing in number.

The charitable sector is unique in its ability to support so many market participants. A for-profit market that had these features would not exist because either contenders would cease to exist due to poor returns or acquisitive investors would force consolidation of the smaller players.

Unlike the for-profit sector, however, growth does not always equal success for charities. Charities who collect more money than they are able to spend on their causes can face the criticism of being greedy. Is it ethical  for them to continue growing while their donations sit in a bank and drain funding from other causes.

Whereas the biggest charities often tackle problems so large and broad-reaching, like Cancer, that their jobs will never be done, and they will always require more funding and growth, small charities can be different.

They can excel in providing expertise to niche causes, that would languish and be forgotten in larger organisations, but may not need a big budget.

So why has the UK charity sector been shaped this way, with a few behemoth organisations and thousands or micro- charities? Partly, it’s due to a legislative environment which makes it comparatively easy to start up a charity. Any person can register a new charity with comparative ease. Running it is where the challenge starts.

However, to get the full story you must look at the various motivations of participants have within it. Why do people set up so many charities, now at their highest start up rates since records began, and why do people continue to give to small charities?

The answer to both questions is simple: Because people want something to be done and they recognise they can’t do it on their own. We should applaud people’s entrepreneurial spirit. Looking through the overviews of each of the charities in the league table, it is clear even some of the biggest names had very humble beginnings, often started by just a few tenacious individuals.

However, equally, we should also be mindful that more impact may be created by larger, possibly more efficient, more powerful organisations.

We felt it important to include the debate in this year’s table and have set out a few ideas for and against large and small charities. This certainly is not the last word on the topic and we welcome your comments via www.

The case for larger charities

The case for smaller charities

Jenny Taylor

Working with a variety of charity clients has given Jenny a broad understanding of the charity sector, bringing her multi-methodological research expertise. She excels in weaving abstract pieces of data together to tell a rich, and actionable story.