From Gary Beharrell, Regional Manager of Lloyds Bank Foundation:

The Lloyds Bank Foundation has recently launched our Expert yet Undervalued and on the Frontline report. This details the challenges, experiences and needs of 800 of our grantees following a survey earlier in the year.

The contents of the report won’t be surprising to you– it highlights the sheer scale and number of challenges that small and medium sized charities are facing as well as identifying help that could support them in these tough times. Throughout the report we’ve used charities’ own words to paint the picture of what they’re going through and I’m sure you’ll agree, their words are compelling. They tell of the increases and growing complexity of demand, the difficulty of attracting funds and the disadvantages they face when it comes to commissioning. They also describe how they are rising to these challenges, often with little support and even fewer resources. Some highlights include:

• 81% of small and medium sized charities (income £25,000 – £1M) are struggling to raise the funds they need to survive and 63% are seriously worried about their ongoing funding over the next two years.

• Many do not have the capacity or capability to be able to add other income streams and some are simply not viable, such as charging vulnerable clients for services, or social investment. 63% of charities therefore predict that their ability to secure funding will get harder over the next two years.

• The funding problem is exacerbated the changing needs of the people charities help. 88% reported a changed in the requirements of those they serve, and 72% of these stated that needs are increasing and becoming more complex, often as a result of other services closing, increased poverty and welfare reform.

• Where money is available for charities, the commissioning processes of central and local government are deepening the challenges faced by small and medium-sized charities because they favour larger and often commercial providers. 61% of those surveyed have bid for contracts yet half (49%) said that they found the process difficult or impossible. Among the obstacles they experienced were: commissioning processes incentivising competition, not collaboration; complex, secretive and burdensome processes; being undercut by larger organisations or used as ‘bid candy’ by them as they plunder the smaller charities’ local knowledge but exclude them when actually rolling out services.

This survey was conducted before the announcement of the Spending Review and the Chancellor’s plan that budgets in the key areas in which these charities work will be cut by a further 25 – 40%.