Working with benevolent charities — learnings from a startup perspective

Photo by Lina Trochez on Unsplash

Last week, I had the privilege of joining the Association of Charitable Organisation (ACO)’s 75th anniversary celebrations, which celebrated the UK benevolence sector and the vital role that benevolent funds / charities have played in supporting people in difficult circumstances. As a startup founder who set up Lightning Social Ventures barely over a year ago, without having even heard of the term “benevolent funds”, I’ve found it incredibly inspiring and fascinating to work with this sector.

So what are benevolent funds / charities which make grants to individuals?

Benevolent funds are charities that provides financial grants and welfare support to individuals experiencing financial hardship and their families. As described in this article, many were “created on a wave of 19th-century philanthropy to provide assistance to struggling “gentlefolk” or handouts to the starving and destitute of the parish”. The sector includes thousands of institutions which spent over £500m last year, with a diverse range of focus areas across different industries / occupations, geographies and demographics.

Over the last year of working with benevolent charities to bring digital / Fintech solutions to the grant giving process, I’ve learnt a lot that I never knew about this unique sector through my career across the startup, corporate and international nonprofit sectors. Here are a few learnings:

1. The sector is rich in history, and remarkably resilient
Most organisations are centuries (or at least decades) old — our partner Smallwood Trust was founded in 1886 as the Society for the Assistance of Ladies in Reduced Circumstances and the Royal British Legion just turned 100, while the charity in my neighbourhood (DEBK) started with a £20 donation in the 1600s. This speaks to the scale and depth of the problem they tackle — one CEO wryly observed that they should no longer need to exist, but with 14.5m people living in poverty in the UK the need for them remains. In line with broader charity sector trends described here, many have adapted their services and ways of working to respond to new needs over time. In contrast, tech startups only started to emerge widely a couple of decades ago. With a majority of startups failing within 3 years, it may be worth reflecting on what we can learn from the resilience of the benevolent sector.

2. Charities can be very quick to act and respond
When the pandemic struck and millions of businesses had to shut down, a number of benevolent charities really stepped up. In the face of immense pressure and uncertainty, they not only continued their vital work but in some cases, greatly expanded their support. It was amazing to hear about how the Licensed Trade Charity (LTC) tripled the number of people it supported from ~23k to ~73k in 2020, having also made a rapid transition from paper-based to digital systems. As another example, Turn2us raised >£2m in 8 weeks for their covid crisis response at the onset of Covid-19 in April 2019. While many of my peers from the private sector have a perception that charities are slow moving and archaic, this has proven that it’s time to revisit some of these long-held assumptions.

3. They often have small teams which punch above their weight
Similar to early stage startups, many benevolent charities have small teams and limited resources. As such, it’s amazing to see some distribute multi-million budgets in grants to individuals with teams of less than 5 or 10 staff. Even with a tiny team of two part-time staff, the Teaching Staff Trust extended a lifeline of support to hundreds of teaching staff and contractors when schools were closed. There is incredible talent within the sector— I’ve been really impressed and inspired by some of the people I’ve been fortunate to meet and work with.

4. Innovation is accelerating, while impact remains core
Charities have started innovating on multiple fronts across technology, programmes and process, with the pace of change accelerating dramatically over the last two years. Some have transitioned from pen and paper to digital application forms and CRMs, migrated from local storage to cloud and even adopted new Fintech solutions such as open banking and identity verification.

At the same time, they also remind us that innovation isn’t just about the technology — it’s about the impact it can help to achieve. Emerging themes have been about finding ways to better target support towards the people in greatest need, offering more holistic support to address root causes of poverty and ensuring that solutions are designed in co-production with the people who would actually use them. Examples include the provision of mental health support by Ben and the Electrical Industries Charity, holistic packages of support offered by Buttle to address multiple needs, LTC adopting a human-centred writing approach and Turn2us incorporating co-production into their brand and product design. Ultimately, treating people as humans rather than numbers remains at the core.

5. Collaboration across the ecosystem is complex, but critical
Having spoken with dozens of individuals who have sought financial support, I’m acutely aware of just how fragmented the landscape is for them — not just across grantmaking charities, but the broader ecosystem of support organisations / debt advisors, creditors and public sector institutions. This means that many people can get bounced from pillar to post and fall through the cracks in the convoluted process of seeking support.

Many leaders in the sector are keen to address this, taking steps to collaborate on pooling funding (a process known as “almonisation”), share data (e.g. via the FIND: Local Needs Databank project), work with multi-faceted partner networks (e.g. Smallwood Trust’s place-based programme) and engage with the government in order to push for systemic change. While this is complex and difficult to achieve for a diverse range of organisations with limited resources, it’s inspiring to see the appetite that they have to make collaboration work. This is certainly something the startup world (where competition can be a bigger theme than collaboration) can learn from — especially in this area, where the problem is far too large for any one organisation to address.

Reflections and how we aim to help

Since starting Lightning Social Ventures last year, I’ve personally been constantly inspired and amazed by the people and organisations we’ve had a chance to work with in this sector. We aim to use our technology and skills to help accelerate innovation and streamline the provision of support, join the dots across the ecosystem and be a multiplier for impact — ultimately enabling millions of people in financial hardship to attain financial wellbeing. We’ve made a start by building a shared digital grants platform in collaboration with leaders in the benevolent sector through the Social Innovation Council, and hope this can play a part in broader systemic change across the ecosystem as we progress in the journey together.

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Founder and CEO, Lightning Social Ventures

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Ren Yi Hooi

Ren Yi Hooi

Founder and CEO, Lightning Social Ventures

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