Charities hesitate to take up Modernisation Fund business advice

20% of those eligible have not yet taken free advice on collaboration and merger

One of the key funds in the Government's £40.5m recession action plan has not yet been fully taken up by sector organisations.

The fund is offering charities vouchers for two days of business advice, worth £1,000, about collaboration and merger. The non-departmental public body Capacitybuilders, which is managing it on behalf of the Office of the Third Sector, budgeted for take-up by 1,000 organisations at a cost of £1m.

A total of 1,068 organisations applied for vouchers to pay for the advice and all were offered them in early July. But only 820 charities - about 80 per cent - had taken them up by last week.

Charities have until 9 November to redeem the vouchers. A Capacitybuilders spokeswoman said the final figure would not be known until then.

"We are working hard to support the third sector," said the spokeswoman. "The money is there and it's up to individual organisations to take advantage of it, as many are. Ultimately, it's for individual organisations to decide what's right for them."

The funding for the scheme comes from the £16.5m Modernisation Fund, which the Office of the Third Sector established to help charities become more resilient in the downturn.

The Modernisation Fund is being run by Capacitybuilders and investment fund Futurebuilders, renamed Social Investment Business last week.

As well as the £1m in bursaries, Capacitybuilders is offering £6m of grants worth up to £10,000 each to organisations that have received bursaries and want to proceed with merger or collaboration. Applications for the second phase of funding opened last week.

The spokeswoman said any unallocated funds from the bursaries would go into the second phase of funding, which opened for bids last week.

Capacitybuilders has also used its Modernisation Fund allocation to finance services such as local workshops on collaboration and merger, and an online toolkit that advises charities on how to combat the recession.


Kidscape, which works to tackle bullying and abuse of children, is one of more than 800 organisations to have received a bursary of £1,000 from the Modernisation Fund. It is to pay for professional advice about a collaboration with young persons helpline Youth2Youth.

Sheila King, chair of Youth2Youth, a west London-based helpline for young people aged between 16 and 21, said her charity had been speaking to a number of other charities about collaborative working but would be working with Kidscape because it had received the Capacitybuilders funding.

King said no decisions had yet been taken about the ways in which the charities would work together and it was too early to tell whether they would eventually merge.

Peter Bradley, deputy director of Kidscape, said the organisations were not planning a merger, but he did not rule it out in future. Kidscape had an income in 2007/08 of £676,396 and employs 15 staff. Youth2Youth had an income of £28,607 in that year.

Kaye Wiggins

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