The voluntary sector is threatened by "Tescoisation" as a small group of big charities consume an ever-greater piece of the pie, Iain Duncan Smith MP told charity chief executives last week.
Speaking at Third Sector's annual Britain's Most Admired Charities awards, sponsored by the Royal Bank of Scotland Group, the former Tory leader suggested so-called 'big charity' was edging out smaller, more innovative organisations.
"Like the supermarkets, their impressive economies of scale, proximity to government and media-buying power provide great scope for increasing market share at the expense of smaller rivals," he said.
He suggested that the sector was being compromised by big charity's "close relationship" with government, which was driven by an increasing dependence on statutory funding.
"As big charity gets ever closer to big government, it increasingly mirrors its thinking and behaviour," Duncan Smith said. "State bureaucracies feel threatened by new thinking and different approaches. I fear big charity has coalesced around narrowly accepted ways of thinking."
The chairman of the Centre for Social Justice (CSJ) accused large charities of becoming progressively detached from passionate volunteers as they begin to resemble professional organisations. The result, he suggested, is a loss of diversity and a "striking uniformity of world view".
The public is tiring of big charity's campaigning focus, Duncan Smith added, which was taking on increasingly shocking forms to maintain interest.
Citing a CSJ poll showing people would rather give money to local charities working with needy people than to a national campaigning charity, he claimed smaller organisations were being "out-gunned" by big charity, which was "indifferent to their values-based work".
Duncan Smith recommended a revision of the funding system to help the sector overcome many of these problems.
He said stakeholder-directed funding, such as a voucher-based system, could tackle the "hegemony" of big charity, which he suggested was being bolstered by the system of government grants and contracts that "discourages diversity and innovation".
The CSJ has joined forces with the Centre for Policy Studies to set up a commission looking at stakeholder-directed schemes and possible third-sector financing for the future.
- See Editorial, page 22.