'Tescoisation' of the sector is a myth, says report

Third Sector Research Centre research says large charities are not increasing their share of the sector's income

The ‘Tescoisation’ of the voluntary sector – the idea that large charities are taking a bigger slice of the sector’s income – is a myth, according to academics.

A paper published by the Third Sector Research Centre says the largest 1 per cent of charities accounted for 62.1 per cent of the sector’s income in 2007, exactly the same proportion as in 1995.

If the increasing number of charities, many of which are very small, is taken into account, income has actually become less concentrated in large charities, the researchers say.

"These results are inconsistent with the ‘Tescoisation’ hypothesis," the paper says.

The term was coined by Iain Duncan Smith, the work and pensions secretary, when the Conservatives were in opposition in 2005. "Small community groups and charities find themselves increasingly squeezed by big charities," he said.

The research by Peter Backus of the Centre for Charitable Giving and David Clifford of the Third Sector Research Centre at Southampton University, suggests that the income gap has grown between medium-sized charities and small charities but has narrowed between medium-sized charities and large charities.

"The evidence suggests that the charitable sector has experienced a fall in cross-sectional concentration," the report says.

Some parts of the sector, however, such as health charities, "have undergone an unambiguous process of increasing concentration", it says.

In another paper that tracks charitable income growth from 1997 to 2008, the same authors examine the "professionalisation" of the sector and conclude that established organisations with paid staff grow more quickly.

Established charities providing social services had benefited from an increase in income, it said.

A spokesman of the National Council for Voluntary Organisations, which published the authoritative UK Civil Society Almanac earlier this year, said it showed that voluntary sector income had increased year on year but the biggest ten per cent of voluntary organisations in 1995 had shown a decline in their share of the sector's income since then.

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