Some big charities are prepared to walk over anyone for their market share and are "no better than Serco and Capita", according to Paul Streets, chief executive of the Lloyds Bank Foundation.
Speaking at a panel debate hosted in London yesterday by the think tank NPC on the impact that the behaviour of large charities has had on the sector, Streets said that although organisations such as Amnesty International and the sight-loss charity RNIB were institutions that did amazing work for their beneficiaries, several new entrants to the sector had a "pile ’em high and sell ’em cheap" mentality on service provision.
He said there were also charities that had been around for a while that took a similar approach and "should know a hell of a lot better".
He said: "There are charities that now see their sole purpose as volume, scale and reach, which are prepared to walk over anybody to gain market share. They’re prepared to collude with commissioners in pretending that really complex people can be dealt with cheaply."
He said that when such charities won the contracts they were seeking, they would then subcontract the work to "third-tier small charities", which would be forced to take on the expensive jobs while the larger charities "picked off the cream".
"They’re no better than Serco or Capita," he said.
He singled out housing associations as guilty of this behaviour, saying that local associations had "run roughshod" over women’s aid organisations and domestic violence charities up and down the country.
"While small charities are committed to their communities, these large charities are committed to their contracts," he said. "As soon as they get tight – and we sure as hell know they’re going to get even tighter in the next five years – they clear off and leave the pieces to be picked off by the small local charities that are never going to leave that community."
The event, which was called "Has the behaviour of large charities contaminated the whole charity sector?", also heard from Lesley-Anne Alexander, outgoing chief executive of the sight-loss charity the RNIB, who said that her charity did not compete for contracts. She noted that for every contract that was won, there was also a loser.
Cathy Ashley, chief executive of the Family Rights Group, which provides support to parents whose children are involved with social services, also spoke at the event. Referring to recent remarks from Rob Wilson, the Minister for Civil Society, that charities should abandon "unsustainable" over-reliance on public sector grants, Ashley said Wilson should try to do her job if he thought it was possible for charities like hers to raise funds from alternative sources.
Another panellist, Matthew Sherrington, a charity leadership and communications consultant and a regular blogger for Third Sector, said the fundraising crisis last year was not caused by the biggest or the smallest charities but rather by the mid-sized ones. He said medium-sized charities often used the most aggressive fundraising techniques, such as lotteries and raffles, because they were not well-known enough to rely on their brand power alone to bring in supporters.