Paul Streets, the chief executive of the Lloyds Bank Foundation, has accused large charities of aping the practices of the private and public sectors to squeeze smaller local charities out of service provision.
Speaking at the Social Change Awards organised by the Directory of Social Change in central London last night, Streets warned that if the voluntary sector as a whole did not emulate smaller charities and reconnect with local communities, it would have only itself to blame if commissioners viewed charities in the same way as private providers.
Streets, whose organisation offers grant funding to charities with incomes of less than £1m, praised small charities for their approach to building services by starting with the needs of local people and then designing a service, rather than taking a top-down approach.
He said smaller charities were more sustainable, even in tough financial climates, because they were responding to a need they saw, not a contract they had pitched for and, unlike commercial providers or national charities, would not pull out if a contract was lost.
He accused larger charities of pursuing a "headlong rush for growth" that led them to fall into state-vision social change as seen in large-scale top-down contracts.
"They swap the voices of those we reach for the voices of those who commission us to reach them, and determine need on the basis of what those commissioners are prepared to pay for," Streets said.
"In doing so, I think they have effectively become co-opted as delivery agents of the state rather than agents of social change. It feels like really dangerous territory, frankly."
He called for charities to return to the values and ethos that differentiated them from the private and public sectors.
"And that means not aping their top-down market-driven approaches, either in respect of those we serve or in respect of our fellow charities," Streets said.
He said the greatest anguish for the small charities supported by the Lloyds Foundation came when they were "at the sharp end of competitive and pricing practices" from large charities that "use their economic muscle and bid-writing prowess to pitch against the long-established local charity or squeeze them in a subcontract if they win".
But he pointed out that the same organisations would send out direct mail and public relations materials about their values and ethos.
"I get that times are tough," Streets said. "But if we in the public sector don’t mirror in our own relationships the value we place in building relationships with those we serve, we’ve only got ourselves to blame if the commissioner decides they’d rather go to a private provider than with us, or if the public grow ever more sceptical about our requests for their money."
He called on the sector to redress the balance and reconnect with its campaigning roots by connecting local action with national advocacy.