Bigger Isn’t Always Better

In recent years, the charity sector in the UK has experienced a quiet but radical transformation. The headlines still talk about giving fatigue, cost-of-living pressures, and overstretched services. But underneath that surface, something less visible — and more powerful — is taking shape: the biggest charities are getting even bigger.

According to the Centre for Social Justice, just 4% of charities — those with annual incomes over £1 million — now control over 80% of the sector’s total income. That number has been rising steadily. And while larger charities have the infrastructure to secure government contracts, corporate partnerships, and foundation grants, smaller, local organisations often struggle to stay afloat. After the pandemic, small charities saw their average costs rise by nearly 12%, yet their income grew by just 3%​.

This isn’t just about numbers — it’s also about a growing distortion in the sector.

The Power of Proximity

The economic principle known as the Cantillon Effect helps explain what’s going on. In a crisis — or even during routine funding cycles — money tends to flow first to those closest to the source: big organisations, with brand recognition, connections, and grant-writing teams.

It’s not that these organisations aren’t doing good work. Of course many are. But in this system, the playing field is no longer level. Local groups, the ones closest to the communities and problems, often don’t have the capacity to access funds. Their absence from decision-making tables means the solutions that get funded may not be the ones most needed.

Why It Matters

When scale becomes the primary signal of success, we risk losing what makes charity distinctive in the first place: human connection, responsiveness, and rootedness. Bigger charities may offer consistency and brand trust, but they can also become distanced from real-time feedback, slow to respond to local nuance, and shaped by the agendas of institutional funders.

This is especially true when the feedback loops break down. In business, the customer votes with their wallet. In politics, the voter has a say. But if we are not careful, the recipients of services provided by large institutions have no direct line to the donors funding them. The vital loop between giver and recipient is often filled by layers of reporting, branding, and sanitised stories.

A Better Way?

This isn’t to say that ‘small is good, big is bad’. It’s a call to remember what charity is actually for. The answer isn’t to stop funding large charities. Rather, we need ensure we don’t ignore the consequences of this trend.

We need better funding models that reward trust and proximity, not just profile and polish. We need feedback systems that elevate the voices of those on the receiving end of charity, not just those on stage at the next sector conference.

And perhaps most urgently, we need to remind ourselves that growth in size doesn’t always equal growth in impact.

If You Work in the Sector...

This trend affects funders, staff, trustees, and community members alike. If you're close to this space, ask yourself:

• Who is growing fastest — and why?

• What’s getting funded — and what isn’t?

• Who’s at the table — and who’s left waiting outside?

These are uncomfortable questions. But answering them might just help us reclaim a more human, more responsive kind of charity.