The time has come to be uncharitable

The sector has reached a watershed and needs to change dramatically if it is to achieve its potential. It could be that the current financial pressure will prove to be the catalyst for such a change.

Many charities will now need to decide whether they remain in their conventional role or wish to move into the delivery model for public sector funded projects. The latter has more risk attached to it, and is higher profile.

My overriding view is that there are just too many organisations. There are more than 200,000 charities and an estimated 600,000 not-for-profit organisations in the UK - one for every 10 members of the population.

The duplication of provision is very noticeable, the confusion to its customer is enormous, and yet little attempt is made to change it. As a result, mistakes are replicated and even worse, little opportunity taken to scale-up success. Funding streams are protected at all cost.

If a similar situation prevailed in the private sector, the market would force organisations out of business through insufficient custom, or mergers or acquisitions would occur.

CEOs and trustees of charities need to start thinking seriously about mergers in this sector, as I sense that some of the smaller, more innovative organisations could well go out of business and their creative ideas lost for ever.

My concern is that it may not necessarily be the most fit-for-purpose organisations which survive, because large in this sector counts for a lot. Already, more than 70 % of total income is generated by less than 2% of the sector, and 87% of organisations have incomes of less than £100,000.

Organisations should look seriously at consortium and collaborative working as ways of reducing costs and maximising investment made in programmes. Partnering with the private sector could be hugely rewarding, particularly in the delivery of demanding operational contracts, or for the delivery of back-office services. I believe this would be welcomed by the Government, giving more confidence in the sector having the resources to deliver contracts. This could lead to broader contracts and to increasing the term to five, seven or even 10 years, rather than attempting to persuade this sector to sign up to unworkable one-year contracts, as is presently the case.