News

by Mary Rose Gunn

Across the UK, more and more small charities are closing their doors.  The big ones hit the headlines, but the rash of grassroots charities shutting down is barely noticed, except by the people who rely on them.  The biggest tragedy is that some of these charities have the solutions to society’s most complex problems that we desperately need.  Yet they’re still closing.

At The Fore, the charities we’ve backed have largely been shielded from this trend. Most go on to thrive: half of our pilot charities are having a national impact, and on average, those we’ve supported have increased their income fivefold.  Their success is driven, in the main, by the extraordinary, talented, and resilient people who lead them. However, we’ve recently seen a handful close, despite their clear impact and the need for their work.

So what’s going wrong in the small charity sector? And how can we, as funders and champions of small charities, help stop it?  Because the current system is setting too many up to fail.

No space for succession planning

The charities we’ve seen close were led by remarkable founders and long-standing CEOs, deeply rooted within their communities. They wore every hat, from fundraiser to programme lead to cleaner. But when everything depends on one person, what happens when they burn out or move on?

Succession planning is usually overlooked, and without this even the most impactful organisation can unravel. A new leader might arrive full of energy and ideas, but without systems, capacity, and wider support infrastructure in place, they face an uphill battle. This can trigger a chain reaction of instability, stagnation, and closure.

This isn’t about poor leadership. In a system where most funding is restricted to programmes rather than people, planning or strategy – succession planning is forced to take a back seat because there’s no space or funding to think long term.

Running on empty

Small charities operate on incredibly slim margins. Most don’t have the reserves to weather even short-term shocks, and with so much funding being tied to projects and programmes, there’s no space to plan properly for the future. Without even a basic financial buffer, many organisations are just one unexpected challenge away from collapse.

Even charities with the strongest leaders and the most innovative solutions to the problems we face remain vulnerable.

Boards standing still

Strong boards can be a charity’s greatest asset, but when they aren’t fully engaged, lack vision, or confidence, they can become an organisation’s biggest problem. We’ve seen organisations falter when trustees are overly cautious, focused on sticking to what they know and reluctant to back bold new strategies to transform financial resilience.

In this environment, charity leaders can feel blocked rather than supported. With the sector stuck on a merry-go-round of trying to recruit and retain the right trustees, boards often lack the skills, diversity or drive needed to support bold, long-term thinking. Without the right board, even the most impactful charities risk stagnating, and when there is already no financial buffer, stagnation is not an option.

There is another way

Without broader change across the funding landscape, we’ll continue to see promising organisations close.  At The Fore, we know by experience that small charities can thrive with the right conditions. Unrestricted funding gives leaders space to breathe, plan ahead, and invest in their people and infrastructure, laying the foundations for financial sustainability and resilience.

But we know money alone isn’t enough. That’s why we combine our funding with wraparound support focused on leadership and organisational development, access to business expertise, and matching charities with ambitious trustees.

We join, once again, the long list of charities calling for more funders to move to unrestricted funding.  We know it can be challenging to fund unrestricted, especially for funders with few or stretched staff, but the benefits are manifold. Unrestricted funding empowers small charities and our impact data demonstrates the extraordinary boost it can provide.  And if anyone wants any advice or support, please get in touch, as we’re always happy to share everything we’ve learnt.

Mary Rose Gunn is the Founder and CEO of The Fore the only venture philanthropy fund in the UK backing the best small charities and social enterprises.

To learn more about our exclusive opportunities and events for businesses, social investors and philanthropists, get in touch at: partnerships@thefore.org