Is your charity a big fish or a little fish? What does the voluntary sector think is big or small when it comes to charities?
I work with small charities and social enterprises. My definition of a small charity is one that has an income under £500,000. I’m sometimes surprised when I meet people from charities who refer to their charity as “small” when it has an income of over £1 million, or even over £2 million. But then, when I told the trustee of a new charity that I worked with small charities and explained what I meant by small, he saw that income figure as huge. It’s all about perceptions.
How do the regulators define a small charity?
The Charity Commission had 168,164 charities on its register at the end of June 2018. It splits charities into five income bands. The vast majority of charities have an income of less than £500,000. It’s worth noting that despite making up 93% of the total charities on the register they receive less than 10% of the total income.
In its latest Accounts Monitoring Review the Commission refers to charities with an income under £25,000 as small and those with an income of over £500,000 as “larger”. When you look at the income bands it seems logical to group all charities with an income over £500k as there are only 11,599 charities in this band.
I tried to find similar information on the OSCR (Scottish Charity Regulator) website but couldn’t.
The Charity Commission for Northern Ireland splits the charities on its register into three income bands: less than £100,000, £100,000 to £1 million and over £1 million. We can conclude that these equate to small, medium and large.
Organisations that support and report on charities
The Small Charities Coalition exists to help small charities access the skills, tools & information they need to get going and do what they do best. Their free membership is open to any charity with an income under £1 million and they have 9,000 members.
Another organisation that focuses on small charities is The FSI. Their mission is to build and share knowledge, to elevate the voice of small charities with policy makers and the public, to build leadership in small charities and to support small charities to raise vital funds to meet the needs of their beneficiaries. The FSI has 6,600 members, 82% of them have an income under £500,000. Their free membership is open to charities with an income under £1 million. (Charities with an income between £1 million and £5 million can apply for a paid-for associate membership.)
The NCVO UK Civil Society Almanac 2018, my first port of call for data on the sector, defines voluntary organisations with an income under £100,000 as “micro and small”, and income over £1 million as “larger”.
What do funders say a small charity is?
Lloyds Bank Foundation states that it focuses on small registered charities and CIOs (Charitable Incorporated Organisations) with an income between £25,000 and £1 million.
Trusthouse Charitable Foundation funds charitable organisations with an income under £500,000.
Allen Lane Foundation funds smaller organisations: those with an income under £250,000.
The Tudor Trust wants to support smaller groups, and says it is “much more likely to fund groups with an annual income of less than £1 million”. Last year 77% of their grants went to groups with an annual income of less than £500,000.
The Henry Smith Charity Strengthening Communities programme offers grants for small community based organisations with incomes ranging from £20,000 to £500,000.
Conclusion – how small?
It’s easier to say there’s a majority view on what isn’t a small charity rather than on what is. The majority view is that if your charity’s income is over £1 million you are not a small charity, even if you feel as if you are compared to that small number of “super-charities” with an income over £5 million that receive 72% of all the sector’s income.
But what is a small charity? I’d be happy to stick with the income figure of £500,000 but if the Small Charities Coalition and the FSI both go with an income up to £1 million perhaps that is the de facto definition. Has the concept of medium-sized charities disappeared as the gap between the fundraising power of the super-charities and all the rest has grown?