Are Big Charities Becoming More Dominant?: Cross-Sectional and Longitudinal Perspectives

Abstract

Summary. There is a debate surrounding the implications of big charities’ increasing dominance of total charitable income, but no empirical work which assesses whether indeed big charities are becoming increasingly dominant. We provide this assessment from both cross‐sectional and longitudinal perspectives, using a panel data set with information on charities’ income in England and Wales between 1997 and 2008. From a cross‐sectional perspective, examining trends in income concentration ratios, there is no evidence that the biggest charities account for a growing share of total charity income over the period of analysis. However, the longitudinal perspective, which relates income growth over the period to initial size, shows that initially large charities have significantly higher median relative growth rates than the initially small. Substantively, these results are relevant to government plans for the ‘Big Society’, which rest in part on the ability of smaller, community‐based charities as well as the bigger voluntary bodies to thrive and grow. Methodologically, for studies which examine trends in the distribution of income, these results illustrate the additional insights that are provided by the longitudinal perspective which cannot be inferred from repeated cross‐sectional information.

The Keys to Unlocking Public Payments Data

“…We analyse across quantile group shares defined as the charities with highest incomes of all those receiving LA funding. Table presents the payment value shares of the top 1%, 10%, 25% and 50% charities by income, similar to Backus and Clifford (), and what percent of the LA payments they receive by value and frequency. These results lend some significant support to this ‘Tesco‐isation’ hypothesis, showing that there is a considerable bias towards the larger charities in our sample, where further work would decompose this as a concentration of the income within each of these charities.…”

“…The authors show that charities which were bigger, newer and serving socially excluded or vulnerable people were more likely to receive public funding than other organizations. Backus and Clifford () analyse the ‘dominance’ of big charities from both a cross‐sectional and longitudinal perspective using a panel dataset with information on charities’ income in England and Wales between 1997 and 2008. A number of commentaries cite the important role of the third sector within the ‘Big Society’ envisaged by David Cameron.…”

Reappraising the UK social value legislation

“…It might also include the elimination of bureaucratic silos (division between individual service teams or between the procurement and commissioning arm of the authority) and fine-tuning of contract management to verify that social value is actually being delivered. It is, on the other hand, important for commissioners to be aware of the risk (and sometimes the reality) of oligopolies being created amongst third sector organisations, where dominant large charities might play an important role (Backus and Clifford, 2013); and to avoid turning the Act into a means simply for keeping the third sector strong in difficult times, rather than engaging with all providers in ways that maximise the positive outcomes for vulnerable communities.…”

The Keys to Unlocking Public Payments Data

“…The authors show that charities which were bigger, newer and serving socially excluded or vulnerable people were more likely to receive public funding than other organizations. Backus and Clifford (2013) analyse the 'dominance' of big charities from both a cross-sectional and longitudinal perspective using a panel dataset with information on charities' income in England and Wales between 1997 and 2008. A number of commentaries cite the important role of the third sector within the 'Big Society' envisaged by David Cameron.…”

“…We analyse across quantile group shares defined as the charities with highest incomes of all those receiving LA funding. Table 4 presents the payment value shares of the top 1%, 10%, 25% and 50% charities by income, similar to Backus and Clifford (2013), and what percent of the LA payments they receive by value and frequency. These results lend some significant support to this 'Tesco-isation' hypothesis, showing that there is a considerable bias towards the larger charities in our sample, where further work would decompose this as a concentration of the income within each of these charities.…”