Charitable Grant Making: Small Charities Working With Larger Organisations
I welcome this for many small charities on the brink of closure.
The issue of small charities being used as 'bid candy' in charitable grant making has been around for a long time but we were concerned that the current huge competition for funding might be making this more prevalent.
Smaller charities are very overlooked but are the ones with the connections to the people we are there to assist.
In April 2026, we carried out a short survey to look at this issue and identify what grant makers should do to make their charitable grant making not only fairer but also more more effective. Funding being creamed off by larger organisations inevitably directly reduces the charitable impact this has.
I feel very strongly that smaller charities have to do far more to access grants when they don’t get a salary and put the time in voluntarily.
As always, we've included direct quotes from the small charities themselves, so their voices are heard.
Small Charity Involvement in Partnership Grant Making
The funding, particularly the commissioning process, is a joke and is set up to favour large charities – small charities cannot compete.
Most respondents had been approached by a larger organisation to be included in a funding bid or contract.
- 65% had been approached at least once
- 35% had never been approached
One large organisation in our area hoards all the funding and the council gives them all the contracts. No small org gets a look in.
When small charities were approached, it was most often by:
- 58% another charity
- 16% a public sector organisation
- 25% another type of organisation (such as social enterprises or private providers).
Small charities are grassroots, large are not. The large should be running support for the grassroots to deliver, not buying it in all the time.
What Larger Organisations Want from Small Charities
Larger organisations ‘use’ our reach, are not transparent, gain funding to back up their core costs, and provide minimal delivery costs if they include us.
When asked why they were included in bids, small charities most commonly responded as follows:
- 50% said it was because they can reach communities others struggle to reach.
- 42% said it was because they deliver services the larger organisation does not.
- 21% said it was because they are grassroots organisations.
- 15% said it was to meet social value requirements.
Large charities seem to want to use charities to tick boxes. We add value but they don’t believe we have the experience or capability.
How Charities Rated Their Partnership Experience
We were included in bids but never felt completely part of the process – just a box tick.
Small charities were asked to rate their experience of being included in bids. Key results:
- Only 9% felt they received a fair share of the funding
- 61% rated funding fairness at the lowest end of the scale
- Fewer than 15% felt they were genuine partners
- Around 50% felt their role was tokenistic or that they had little real influence
- Just 26% strongly said they would welcome doing this again
The clearest issue was funding. Small charities frequently feel under‑funded for the work they deliver.
Partners were often reluctant to acknowledge what we did because they felt it took away from their perceived success.
The Wider Charity Sector Context
It is not a hopeful time in the sector when we see so many small charities close.
The Charity Commission’s analysis of its 2024 data (published 26 March 2026) shows that, at an overall sector level, income slightly exceeded expenditure, meaning the sector as a whole returned to a modest surplus. However, this masks significant variation: smaller charities were under greater financial pressure, operating on the narrowest margins and more likely to have expenditure exceeding income, while larger organisations were more likely to be in surplus.
Additionally, the data highlights that a substantial proportion of charities still ran deficits (around 41%), and that the smallest organisations were disproportionately likely to struggle to break even, reinforcing the divide between larger and smaller charities.
After 45 years we are looking at closure, while larger organisations and newer management charities thrive.
How To Improve Charitable Grant Making
Funders and statutory commissioners have to accept small charities have bigger reach to the actual target audience and trust us.
Charities were asked what grant makers should require to make funding more effective. There was very strong agreement on priorities:
- 95% say funding should cover small charities’ full costs
- 88% say funding splits between partners must be transparent
- 87% say unnecessary funding thresholds should be removed
- 86% say small charities should be involved in shaping funding programmes
- 84% say bids should be challenged when responsibility and funding do not match
Small charities want fair funding, transparency, and influence, not just involvement in delivery.
Funding directly builds us to sustain and deliver effectively and is better value for money...
Confidence in the Civil Society Covenant
I don’t think the Covenant will make a blind bit of difference. We’ll keep doing what we do.
Charities were asked whether the 2025 Civil Society Covenant would have a positive impact on their work.
- 52% expect only a limited impact
- 22% expect no impact
- 8% expect a meaningful or major impact
- 18% said they were unsure or had not heard of it
I really don’t know yet how it will include small charities.
Respondents
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Respondents worked across a wide range of causes:
- 30% Health and Wellbeing
- 17% Other community‑based work
- 13% Poverty, homelessness, and foodbanks
- 8% Young people
- 8% Arts, culture, science, and heritage
The remainder covered education, justice, disability, social care, environment, and other specialist areas |
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Charitable Grant Making - Partnership FAQs
Why are small charities often included in partnership bids?
Small charities are commonly included because they can reach communities that larger organisations struggle to engage, deliver specialist services, and bring local trust and insight.
How often are small charities approached to join funding bids?
In this survey, 65% of small charities had been approached at least once by a larger organisation to be included in a funding bid or contract. 35% had never been approached. This shows that partnership working is common within Charitable Grant Making.
Who usually approaches small charities to join bids?
When small charities are approached, it is most often by another charity. The survey found that 58% were approached by charities, 16% by public sector organisations, and 25% by other types of organisations such as social enterprises or private providers.
What do larger organisations want from small charities?
Small charities report that larger organisations mainly want their community reach, specialist knowledge, and ability to deliver services locally. Around half said they were included because they can reach communities others cannot, while many also said they were included to help meet social value requirements.
Do small charities feel like equal partners in Charitable Grant Making?
Many do not. Fewer than 15% of respondents felt they were genuine partners in funding bids. Around 50% felt their involvement was tokenistic or that they had little real influence over decisions.
Is funding shared fairly in partnership grant making?
Funding is the clearest problem. Only 9% of small charities felt they received a fair share of the funding, while 61% rated funding fairness at the lowest end of the scale. Many small charities feel under‑funded for the work they are expected to deliver.
Why does this matter for charitable impact?
When funding is creamed off by larger organisations, less money reaches frontline delivery. This directly reduces charitable impact, especially where small charities are doing most of the work with communities but do not receive funding that covers their real costs.
How are small charities affected in the wider charity sector?
March 2026 Charity Commission analysis shows that while the sector overall returned to a modest surplus, smaller charities are under greater financial pressure. They are more likely to run deficits and operate on very narrow margins, while larger organisations are more likely to be in surplus.
What do small charities want grant makers to change?
There is strong agreement on what would improve Charitable Grant Making. Small charities want funding to cover full costs, transparent funding splits between partners, fewer unnecessary thresholds, real involvement in shaping programmes, and bids to be challenged where responsibility and funding do not match.
Does the Civil Society Covenant give small charities confidence?
Confidence is low. Most respondents expect the Covenant to have limited or no impact, and many are unsure how it applies to small charities or had not heard of it.
Why are small charity voices important in Charitable Grant Making?
Small charities are often closest to the people and communities funders want to reach. Including their voices helps highlight where systems are not working and what needs to change to make Charitable Grant Making fairer, more effective, and better value for money.
