Government drops plans to stop small charities applying to £7.5m fund

The Government's Communities and Local Government department has dropped plans to prevent small charities from applying to its new £7.5m Empowerment Fund.

The CLG’s consultation document on the fund, published in September, had suggested that only charities with annual incomes of at least £400,000 could apply, sparking protest from the sector (Third Sector, 7 September, page 1).

But this week it abandoned the idea and said instead the fund would contribute no more than 50 per cent of an organisation’s income in any one year.

Toby Blume, chief executive of the Urban Forum, which campaigned against the thresholds, was pleased with the outcome and said the changes opened up the programme to a much larger number of organisations.

"It is entirely understandable that they do not want people to be 100 per cent reliant on this funding, so saying 50 per cent is sensible," he said.

The department’s summary of consultation responses acknowledges that many third sector organisations were disappointed with the financial thresholds.

It adds: "It was felt that many of these organisations are of strategic importance to community empowerment or focus on a particular aspect, and their experience and value would be arbitrarily excluded."

Many respondents, it says, felt thresholds could potentially discriminate against equalities groups that were typically smaller in terms of income size and thereby increase the disparity within the sector. It was also felt that the thresholds could limit innovation and new approaches.

In its response to the consultation, the department said: "We want to limit the number of organisations so that the fund makes a meaningful impact. We have also retained the principle of preventing overdependence on this funding stream. Therefore, the fund will contribute no more than 50 per cent of an organisation’s income in any one year."

Communities secretary Hazel Blears this week invited third sector organisations to apply to the fund, which will award between 20 and 25 applicants £250,000 or £500,000 grants over three years to run community schemes.

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