There is a major gap between small charities’ need for accountancy support services and the capacity of providers in the space, a new study shows.

Charity Finance Group has published a report as part of its Small Charities Programme, which found a lack of capacity within support providers. These infrastructure bodies are mostly small organisations that have faced funding cuts, the report found.

The study revealed a challenge in building avenues for communication about services available to small charities, and a lack of resources to help small providers keep on top of developments in complex financial areas like tax.

CFG’s Small Charities Programme, announced last year and supported by Esmée Fairbairn Foundation, aims to develop the knowledge and financial capabilities of small charities. The new report is based on a survey of providers and CFG’s experience in delivering the programme.

The study found the weakest areas of provision of accountancy and support services are in the Midlands, South East, and London. The strongest area of provision appeared to be Yorkshire and Humber.

The report suggests national bodies can do more to meet the needs of support providers, particularly in fostering collaboration and ensuring that strong networks are developed.

Other improvements CFG considered could be made to help support providers include around skills-based volunteering, and whether it can increase capacity to help providers reach more charities.

Building relationships between providers and the private sector would allow best practice to be better shared, CFG argues, and keep providers on top of the latest developments in the sector.

The report suggests providing more resources to help providers grapple with charity tax issues, including digital material in the form of templates and guides that could provide more cost-effective support.

CFG recommended building channels of communication with small charities, particularly through digital channels, to give providers easier access to market and to encourage investment.

The report identified accountancy and support services as a potential target for social investment given the impact that they achieve, but warned it will take time to build successful business models.

CFG head of policy and engagement Andrew O’Brien said local infrastructure bodies are the backbone of the sector, providing critical support that enables small charities to do their work.

The past few years have been challenging for support bodies along with the rest of the sector, O’Brien said, but the need for the assistance they provide has never been greater.

“There are a number of measures that can be taken to support these vital organisations, but it requires a partnership between providers, foundations and government,” he said. “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.”

Access the report here.

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