Charities must avoid putting in overly-low bids to win public service contracts and stop acting as competitors in an attempt to maximise their market share, a major new piece of research urges.
Rebalancing the Relationship, published today by the National Council for Voluntary Organisations, the charity leaders body Acevo and the Lloyds Bank Foundation for England and Wales, is the result of an 18-month research project that collected evidence of good and bad procurement practice from more than 200 charities.
The report highlights ways in which charities can deliver services in collaboration that builds on the spirit of partnership developed during the pandemic.
It finds many positives in procurement practice, including local staff being empowered to develop partnerships, charities not bidding for a service if a local organisation is already delivering it well, and larger charities building the capacity of smaller ones.
But it also says that poor collaborative experiences had broken down trust between some charities.
Unfair distribution of funds to smaller charities, not including partners in decision-making and organisations bidding without the necessary knowledge or experience to deliver services, were all cited as negatives.
Organisations also reported challenges with the way public authorities contracted charities to deliver services to their local communities, which could create financial uncertainty for charities and make collaboration more difficult.
The report sets out five key recommendations for charities to partner better when bidding for and delivering public services. These include competing in an ethical and responsible way, having an openness to collaborate, and nurturing a collaborative organisational culture and leadership behaviours.
Vicky Browning, chief executive of Acevo, said: “By focusing on delivering quality, not quantity, of services, leaders can drive better outcomes for communities at a time when charities are never more needed.”
Sarah Vibert, interim chief executive of the NCVO, said collaborative working had created a stronger, more unified sector voice for influencing central government.
Paul Streets, chief executive of the LBF, said: “The commissioning and procurement environment presents great challenges to charities large and small.
“We’ve seen how this can lead to fierce competition between organisations and, at times, some sharp practices. Yet voluntary organisations can overcome these challenges, as this report has shown.”