Jude Walker talks about the implications of policy decisions for small charities

Due to the current political climate, medium-sized charities are being squeezed between small local charities, which are run by volunteers and favoured by grant-making bodies, and larger organisations able to gear up to tender for major government contracts.

As a small- to medium-sized registered charity with an annual turnover of approximately £750,000 per year, we, Small Woods Association, are one of those charities that find ourselves caught in the middle, trying to find ways to plug the gap.

Our current funding sources include membership subscriptions, Gift Aid, trading and project grants. Fundraising for our core projects is central to our continued existence, but is suffering from constant cost-cutting, increased pressure on staff, and the fact that many funders still refuse – or are unable – to pay full cost recovery.

Chipping away

The difficulties thrown up by government policy are manifold. Cuts of 25 per cent to the Forestry Commission by the coalition government have had the knock-on effect of reducing their support for our work both regionally and nationally. While in the past they contributed up to £30,000 to core funds and up to £70,000 in project funding annually, this has now been reduced to a total of £15,000 for this year.

At the same time, we’re facing increased competition for grants. During the period 2005-2008, our success rate was around one in three applications. Since then, this has reduced to around one in ten. The Olympic funding from the Lottery hit the third sector hard, significantly reducing the overall pot available. Now, with the government threatening to cap tax relief on donations, we are also facing the prospect of even more charities chasing grant funding to make up the shortfall, thereby further increasing competition and reducing the likelihood of success.

As with many other charities, the support role we provide to community groups is being pressured by the wide promotion of Big Society, with no additional resources to the third sector. The almost complete cessation of grant funding by local authorities and health services was supposed to be mitigated by commissioning systems that included opportunities for the third sector, but in many cases their development has been painfully slow.

Meanwhile, the increased emphasis on service contracts has led to government agencies letting large contracts to prime contractors, who then subcontract at very tight rates to local third sector providers. We do not have a team to identify and bid for these opportunities, nor can we deliver on such tight budgets.

Getting personal

Personalised health budgets have proved difficult to manage, leading to the closure of an excellent Small Woods social forestry project in Herefordshire (Wye Wood). We did not cost our project to allow for 20 per cent defaulters, nor for an eight-week delay between a participant being given permission to attend the project and the actual payment for the service provided.

The disbanding of the Regional Development Agencies (RDAs) has also had a knock-on effect. Many third sector agencies had developed a good working relationship with their local RDA, and the Local Enterprise Partnerships which have largely replaced them are simply too numerous for small national charities such as ourselves to interact with effectively.

There is no doubt that charities such as ourselves need to re-think our strategies in order to survive. There are several areas of opportunity we are focusing on in order to bring our funding back to a sustainable level. In response to the tighter funding environment, we have changed our fundraising policy to include online giving and individual donations. We have recently launched a new website to help achieve this change and are also striving to increase members through the new site and the appointment of regional membership co-ordinators. And despite the challenges involved we intend to tender for more contracts from local authorities, government bodies and community groups. For example, we have been successful in a small tender for providing help to a local community orchard group (£6,000). Meanwhile, our pre-qualification questionnaire has been accepted by Defra for tendering for a national forestry training programme potentially worth millions.

Finally, we plan to increase income from trading and enterprises. We have invested in specialist machinery which will help our members be more economically sustainable. We are intending to convert a workshop at our site in Coalbrookdale for small local businesses to use, which will increase our rental income, and we have turned some space over to a combined education and wild camping site for groups and families to experience bush craft activities, fire lighting and wild cooking.

We are fortunate to have a loyal membership which support our aims, as the future for a charity of our size could otherwise look bleak. We are putting a lot of faith in our revised fundraising strategies and new website to attract more income, and I’m sure we’ll make it through – but what does the future hold?

Jude Walker is executive director of Small Woods Association

This article first appeared in The Fundraiser magazine, Issue 17, May 2012