There is a significant gap between the needs of small charities and the capacity of those that provide accountancy support, a report from the Charity Finance Group has shown.
The umbrella body’s report State of small charity accountancy and support service providers says that local infrastructure needs more support if it is going to meet the needs of small charities, particularly in the area of small charity accountancy.
The report says that “there is clearly a gap between the numbers of charities that are likely to need some kind of charity finance support and the number of support providers”.
It also identifies that this problem has worsened, with the survey indicating that the number of accountancy and support service providers has fallen since previous research.
The report says that this is down to small charity finance service providers being small organisations themselves, who can only provide their services to a small number of clients – creating a “cap on their capacity to expand and meet demand”.
It said that skills-based volunteering, digital support and building channels to communicate services to small charities are some of the ways that can help to boost local infrastructure.
Andrew O’Brien, head of policy and engagement at CFG, said: “Local infrastructure bodies are the backbone of our sector, providing critical support that enables smaller charities to do their work. The past few years have been challenging for support providers, as it has been for the sector as a whole. But the importance of financial advice and support has never been greater given the environment that small charities are operating in.
“There are a number of measures that we can be taken to support these vital organisations, but it requires a partnership between providers, foundations and government. Charity Finance Group will continue to do what we can to help boost the support available to these organisations so that they can in turn help small charities to thrive.”
CFG said that this is worrying as the general trend towards expansion shows that there is a need for this support.
‘Lack of resources’
It said the challenges are due to a lack of capacity within providers; a challenge in building avenues for communication about the services available to small charities; and a lack of resources to help small providers keep on top of developments in complex financial areas such as tax.
It found that the weakest areas of provision of accountancy and support services are in the Midlands, South East and London whereas the strongest area of provision appears to be Yorkshire and Humber.
It called on national bodies to do more to meet the needs of these support providers, particularly in “fostering collaboration and ensuring that strong networks are developed”.
CFG has released its report as part of its Small Charities Programme, which is funded by Esmée Fairbairn Foundation, on the state of small charity accountancy and support service providers such as community accountants and Councils for Voluntary Services.
The report was based on a survey that launched in March 2016 and ran until October 2016. CFG added to the results through observations it made as part of its Small Charities Programme. The survey received 85 responses, ranging from community accountants, CVS’s and charity accountants.
Areas for improvement
The areas where improvements could be made to help support providers, as outlined by the CFG, are:
- Skills-based volunteering – and whether this can increase capacity to help providers reach more charities.
- Building relationships between providers and the private sector – so that best practice can be shared and providers kept on top of latest developments in the sector.
- Providing more resources to help providers grapple with charity tax issues – where capacity is limited but there is demand for support from small charities.
- Digital support – templates and guides are effective ways of reducing the costs of delivering support for providers to small charities.
- Building channels to communication with small charities – particularly through digital channels such as websites and newsletters/bulletins, giving providers much easier access to market and encouraging investment.
- Social investors should consider investing in these capacity building organisations – recognising the impact that they achieve, but also understanding that it will take time to build successful business models.