Organisations that are uncomfortable with the idea of competing with other charities for contracts might not exist in 10 years' time, according to Derek Smith, a statutory funding consultant at charity consulting firm Action Planning.
Derek Smith told chief executives body Acevo's funding roadshow in London yesterday that the amount of statutory funding available was likely to drop by about 10 per cent over the next few years, so there would be more competition for the remaining contracts.
"Winning contracts will involve winning them off your competitors," he said. "If your organisation is one that doesn't like the idea of competition, it might not be around in 10 years."
He also said voluntary organisations would need a more "private sector" approach, with increased emphasis on contract management, business planning and marketing. He said projects should be devised to fit funders' agendas. "Don't take the same old project you always have," he said.
The sector also needed to get better at writing clear and concise funding bids backed up with evidence of effectiveness, said Smith. "You need to think about why a funder would choose you. One reason is that you understand clients' needs better.
"But when I look at many funding bids, the charity doesn't convince me it understands its client group. Where is the national research, or the evidence you are meeting best practice? Too many things in charities' applications are actually opinions."
Janet Moore, third sector team leader at the Department for Children, Schools and Families, said her department needed to be confident that the projects it funded were "giving us what we want".
She encouraged third sector organisations to respond to a consultation on the department's £35m a year grants policy, due to be launched next month.