When is a charity closure not a failure?

Charity closures – including recent high profile ones such as Kids Company, BAAF, BeatBullying – are generally understood as being ‘a bad thing’. The loss of services, knowledge and expertise from the sector certainly is. But hidden in these sad tales are some closures we should perceive differently.

Every charity is set up with a purpose. It is there to respond to a need, tackle an issue, solve a societal problem. This purpose is set out in the objects of the charity and registered with the Charity Commission.

The impact of commissioning means increasingly there are charities out there that have lost their position. Usually this happens when they lose out in a tender exercise and the winning organisation is now paid to provide the services they used to deliver. This happens in business too – think of a local store when a large supermarket moves in. Those who survive this dramatic market change are those who adapt to deliver a very specialist service.

Charities too small to compete with large competitors can respond in a similar way by focusing on meeting needs that remain unserved. So a domestic abuse charity that used to deliver a refuge can continue to offer specialist community outreach or counselling when a housing association wins the refuge contract. This will not be an easy transition: it needs leadership; flexibility of thinking; finding new income streams; losing staff. What is important is that the core purpose is at the heart of driving change.

Some charities forget this. They focus on keeping going at any cost and seek funding to keep jobs. The focus is on maintaining the existence of the charity and taking on any new services that come their way. It is an understandable response to change but by putting the organisation before the purpose they are more likely to experience mission drift and less likely to attract funding.

A small number of charities respond to this change by being courageous enough to close. A charity I spoke with recently, who had lost out in a tender process, had an uncommon and refreshing answer to my question of what next:

“if the need is not there, we don’t need to exist”

We should be concerned about the number of charity closures and the tender process where small, local, specialist provision is lost. But on some occasions closing a charity is the right, and brave, decision to take.

Emma Beeston Consultancy advises funders and philanthropists on giving strategies and processes; selecting causes and charities; assessments and impact monitoring. Services for charities include external perception reviews; bid reviews; training for fundraisers and non-fundraisers involved in bids. E: ms.e.beeston@gmail.com; T: emmabeeston01