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The government released its first Civil Society Strategy in 15 years on 9^th August 2018.  The Fore welcomes the publication of the Strategy and sees it as a strong indication that the government indeed intends “to strengthen the voluntary sector, put social purpose at the heart of business, and transform public services,” as Danny Kruger, expert advisor to DCMS on the design of the Strategy and advisory board member of The Fore, has said.

In The Fore’s view, the Strategy shines a light on some of the sector’s most pressing problems; problems that The Fore was founded to solve. In particular, the Strategy highlights how the largest 3% of organisations receive 80% of the sector’s income, and only 18% of all organisations (those with an income of £100,000 or more) saw their income grow in 2015/16. The Strategy correctly diagnoses that this is “creating a considerable income disparity between small, local charities and large, national charities.” It is becoming painfully apparent that small charities need more support than they are currently getting. As the CEO of The Fore, Mary Rose Gunn, has previously written for the RSA, when we fail to provide this support, we decimate small charities’ ability not only to aid their local communities, but also, where it’s appropriate, for them to scale their interventions and challenge the larger, established players in the sector.

As many other commentators have noted, while the Strategy provides an important first step toward articulating this and other issues that affect the sector, it doesn’t yet go far enough in allocating sufficient funds to even begin to address the problem. A commitment of only £21 million seems paltry, particularly when an estimated £2 billion of dormant assets remain untapped. It is clear that, as Danny Kruger put it, this is only “the start not end of a process,” and that its commitments will need to be fleshed out more fully in years to come.

The further funding contemplated by the Strategy, an additional £145 million from dormant bank accounts for youth services and financial inclusion in future, is a welcome signal of such future support. However, it is regrettable that this funding is restricted by The Dormant Bank and Building Society Accounts Act of 2008 to only benefit the two sectors of youth services and financial inclusion. We need to stop playing “sector roulette,” today espousing the pressing need of, for example, loneliness among the elderly, only to turn tomorrow to the pressing need of rough sleeping. A true civil society will always have many needs. Rather than pick and choose at the sector level, we should commit to broader legislative reform allowing reclaimed funds to support the best organisations delivering meaningful results regardless of sector.

The form that this support takes is also crucial. The Fore welcomes the Strategy’s return to more grants provision in its ‘grants 2.0’ programme, rather than ‘pay by performance’ contracts. The Strategy should go further, however, and make a commitment to providing some portion of grants in the form of core-cost funding. The government’s public engagement exercise prior to drafting the Strategy demonstrated that charities value this type of unrestricted operating income. A recent study by nfpSynergy similarly found that, on average, charities would trade every £1 of restricted funding for 50p of unrestricted funds, and 20% would swap the £1 for just 10p of unrestricted funding. As has been widely noted, small charities need this investment-style funding to grow and flourish. Funding only programmatic activity while refusing to fund overheads is a recipe for a chronically malnourished civil sector that struggles to achieve sustainability.

In addition to funding, the government’s public engagement exercise prior to drafting the Strategy also revealed that charities and social enterprises want help with capacity building through training and advice and found that there was demand for small organisations to be supported in measuring and demonstrating their social value. While the government’s support for the Small Charities Fundraising Training programme is an excellent first step toward supporting small charities’ capacity-building needs, it is far from sufficient. In particular, given that the Strategy designated the social role of businesses as one of its five core foundations, The Fore believes the Strategy should more strongly emphasise the opportunities for volunteers with business expertise to provide key capacity-building support to the social sector through advice, mentorship or even a board position.

While the Strategy may not have all the answers, it is certainly asking the right questions. The Strategy highlights how our sector is failing to fund, upskill and scale vital small charities and also how businesses can be a powerful tool to support the social sector achieve social change. The Fore looks forward to the further evolution of the Strategy, in hopes that it will include more funding for small charities, regardless of sector, more funding provided on an unrestricted basis that can be used to fund overheads, and a greater commitment to leveraging the skills and expertise of the private sector to build capacity in the social sector through training, advice and guidance.