One of the challenges for membership organisations like NCVO is finding way to support and give a voice to charity members of all types and sizes. Indeed, there are often tensions in the relationships between the smaller and larger charities, especially when they are serving the same communities – be it communities based on geography or interest.
I’ve worked in both small and large charities. I firmly believe there is an important role for each to play – having such a diverse range of organisations is one of the things that makes our sector so vibrant. Larger charities often have the reach, voice and infrastructure required to achieve change at scale. Smaller charities are often able to be more embedded in the communities they serve and can be nimbler in their ability respond to need. I’ve also run a coalition where the largest member had an income of £35m and smallest was less than £5,000. Through this work I’ve seen first hand that something really special can happen if the strengths of big and small are combined.
Collaboration is however easier said than done, especially when there is money involved. More so when there is an inherent power imbalance that comes when a larger and a smaller organisation seek to work together. An area where this tension is perhaps most acute is in relation to government contracts. There is concern about organisations using others as ‘bid candy’, bidding for work they don’t have the right experience to deliver, and undercutting organisations doing good work but then not being able to do the work themselves. This is a familiar story to NCVO, and our partners ACEVO and the Lloyds Bank Foundation, which is why last year we began working together on a project to explore the relationship between smaller and larger charities in relation to government contracts.
What we have found
Today we publish our interim report which summarises feedback from an open call for evidence along with targeted engagement with a broad range of organisations.
Several participants expressed a concern that in relentlessly pursuing public sector contracts, some charities appeared to be too driven by market growth and succumb to mission drift. Others worried that charities sometimes failed to consider the impact of their competitive tendering strategies on the sustainability of other organisations valued by beneficiaries. Often this concern related to the practices of organisations larger than theirs, but participants from organisations of all sizes reported concerns about the practices of others in contracting. Worryingly, a lack of trust is the common factor underpinning many of these examples, and this can be a real barrier to organisations working together. Most concerning of all is the finding of our research that the practices of charities in response to competitive tendering can lead to poorer outcomes for the people they are intended to serve.
Recognise our power
One solution to this problem is to influence public policy on commissioning and procurement. In health, partly as a result of campaigning by health charities, we are now seeing the start of a move away from competition as a key driver for quality improvement, to a focus on collaboration. However, policy change is slow and perhaps only part of the solution. Another part of the way in which we can address these challenges is in a change in mindset when it comes to competitive tendering. We as a sector need to recognise the responsibility and power we have when we bid for contracts.
There is an analogy here for NCVO’s own work. Through our new strategy work NCVO is certainly working on this change in mindset. We recognise as a larger charity which is relatively well resourced and a with a reputation built on a long history, we are in a privileged position in the sector. We want to demonstrate generous leadership in using this position. Similarly, I believe trustees and senior managers of all charities, but particularly those organisations that have a greater position of power, influence, income and scale, perhaps need to reflect on how their organisation works with and alongside others when it comes to government contracts. This is easy to say but clearly fraught with all the usual difficulties of partnership working, with the added tension that this is about money – money that is often a significant proportion of funding for the organisations involved.
It’s easy to focus on the negative stories, but through this work we have been inspired by some great organisations who are taking the lead in rebalancing the relationship in the following ways.
- Considering the impact on an existing provider and beneficiaries when deciding whether to bid for a contract
- Creating a culture of serving the community not the commissioner, using contracts as a vehicle for change
- Co-producing services with the people who use them, often through working in partnership with other organisations that have more experience of doing this
- Making it easy for their staff to initiate collaborative working
- Adopting a ‘just because you can, doesn’t mean you should’ mindset, which focuses on improving impact not just growing scale
What if we don’t change our mindset and therefore our practice? If we leave the sector passive to market forces? It is very likely the size, shape and culture of our sector will change. We may end up with a very small number of very large organisations, as has already happened in some subsectors. We will lose the self-organisation, innovation and community connection that smaller organisations can bring. In practice rebalancing the relationships might sometimes mean taking a smaller share of the cash, or even stepping aside altogether to let others lead who are perhaps in better positions to do so. In doing so, we have the potential to strengthen the whole sector and therefore grow the overall impact for the beneficiaries we are here to serve.
Tell us what you think
The draft recommendations in the interim report are based on good practice from organisations we have engaged with. We would like to hear what you think. Do these findings reflect your experience? Would these recommendations help you to work in a more collaborative way? What type of support would you need to adopt these recommendations? Your feedback will help us to develop the final recommendations and consider what support we may need to offer organisations.
If you would like to have your say, please read the report and email a brief response to rebecca.young@ncvo.org.uk by midday 27 March 2020.
Sarah Vibert is the chief executive at NCVO. 
