Dog Eat Dog in the Charity Sector

‍ The UK charity sector had a total income exceeding £102 billion in 2026, with over 171,000 registered charities. However, many are reporting that high inflation and operating costs with expenditures exceeding income are resulting in severely tightened margins. Furthermore, donation fatigue has reduced income. This environment has led to vigorous funding competition. Potentially this situation opens up opportunities for collaboration such that all parties can prosper in this difficult market.

Does charity begin at home?: - A mid-sized charity was contracted by a city Council to provide services for homeless people in the town. This arrangement was working well. It reduced the funding level required from the borough to provide such services because the charity also received donations and grants from other organisations. Another smaller charity suddenly appeared and started working in the same space. The incumbent organization offered to work collaboratively with this new comer but the Council demanded that all interactions take place through their Social Services because sharing clients’ personal details would “contravene GDPR rules”. As a result, the operation became bureaucratic, slow to respond and measurably more expensive to run.

Charity snatch and grab: - A mid-sized charity providing services to the homeless was told about a grant that they were positioned to qualify for. There was another much smaller charity that also wanted to bid for the £300k pot. They met with a view to pooling resources and collaborating to get the funds and supply the service. They worked together to develop the bid only to find that the smaller organisation took the proposal and submitted it on their own and won the money. Sadly, it was not capable of providing the service and the funder did not follow up so the clients lost out. This killing and stealing approach is a death blow to collaboration.

These are prime examples of Why Managers Don’t Collaborate. 

In the first case it’s all too difficult and in the second publicly we declare we are up for it but in private it’s business as usual.