Experiences of competition and collaboration
Commissioning and procurement practices bring significant challenges, but the way charities’ respond to these practices also have an impact. Most organisations of different types and sizes have mixed experiences of competing and collaborating. It is important to remember that while some organisations have reflected on their own behaviours, most have described their personal experience of other organisations. They are describing their perception of recent or past events, which we cannot verify.
Understanding negative experiences of competition and partnership
Competition varies across the sector and sub-sectors, depending on the size of the organisation and nature of the work. While organisations often compete with organisations of similar sizes, some larger national organisations describe competing with smaller local organisations for smaller amounts of funding. A major national organisation suggested they 'tend to compete with organisations that are bigger than us and that's the work we tend to win'. Some larger organisations only tend to compete with smaller local organisations for work that is under £1m. Parts of the sector or service areas were highlighted as being particularly competitive, from drug and alcohol services and housing providers, to local voluntary infrastructure. There is serious concern about ‘fake’ voluntary organisations set up by for profit businesses to deliver contracts.
Charities report a range of negative experiences of competing and working with one another including:
- Poor quality partnerships
- Appropriating or undermining the work of other organisations
- Poor delivery
- Mission drift
- Hostility and unwillingness to collaborate
Poor quality partnerships
Subcontracted organisations describe being treated unfairly by lead partners of different sizes, creating financial instability for providers and problems with delivery. It is common to feel vulnerable or unheard as a subcontracted organisation, especially if the organisation is one of the smaller partners. Partner organisations describe feeling powerless during delivery as well as the bidding phase.
Charities cite the following behaviours of lead providers:
- passing on the majority of the budget cuts or allocating funding unfairly to subcontracted organisations
- having unrealistic expectations of subcontracted organisations
- not sharing information with partners, for example, about TUPE liability or what is included in a joint bid
- not properly coordinating the work, including not having vital contracts and agreements in place
- reducing the voice of partners and not allowing them to influence the delivery model
This situation is compounded by the lack of capacity in smaller organisations to keep up with the pace and intensity of the bidding processes.
Appropriating or undermining work
Several organisations report being included in bids as ‘bid candy’ or ‘bid fodder’, where a charity is named in a bid by a lead organisation but subsequently receives no or little funding. A medium-sized organisation described their experience with a large community interest company; 'Once the contract was awarded, none of the small VCS organisations mentioned in their bid have received any funding or contact regarding their contribution to their services...there are no checks to see how the prime provider is actually actioning what was stated in their tender documents.' This is particularly common for smaller organisations, but large regional or local organisations have also experienced this. A national federation said that all of the organisations in their network had experienced this.
When charities are seen to undermine existing work, other organisations can feel exploited and frustrated. Small and medium-sized user-led organisations are concerned that the value of their work is lost when other organisations win the work: 'We've also had projects that we've designed and developed being retendered and contracts reissued to larger providers to scale up the work. This has meant that exemplar user-led projects and programmes revert to more traditional and non-challenging versions of provision with the leadership and power moving back to professionals.'
NPC’s State of the Sector report highlights that 22% of charities say they sometimes deliver contracts outside of their mission. Organisations of all types and sizes can stray beyond their expertise, remit or charitable objects, often leading them into new areas of competition. Mission drift is not a new issue in the voluntary sector, but it has been worsened by the funding climate: 'Our income goes down, but our costs are constant, forcing us to diversify more and more, often away from our core charitable aims, merely to stay afloat'.
Several national organisations describe feeling forced to move around the country as funding for commissioned work reduces in some regions. Examples given by participants include a mental health organisation bidding for legal advice contracts, a national children’s charity competing with a local Council for Voluntary Service (CVS) to run a local voluntary sector forum, and an older people’s organisation bidding for a young carers support contract. The challenge comes when the drive for organisational survival or market growth comes at the expense of quality services embedded in local communities, through pushing out existing providers.
User led organisations in particular express frustration at non-user led organisations bidding for their core and only work: 'We have experienced increased competition in the areas of work that user-led organisations have fought hard to carve out for themselves over the last 30 years. Other larger non-user-led organisations have moved into the space of advocacy, peer support, recovery and involvement, participation and coproduction.' This pattern is particularly concerning when organisations that do not reflect their beneficiaries in terms of leadership or workforce, compete for the core work of user-led organisations that are effectively run by their beneficiaries.
Several charities have described successfully addressing mission drift in their organisations, often driven by a desire to deliver better quality and become more sustainable: 'We are now in a position where we are confident that [the] contracts we have got are the ones that... we should be doing according to our articles of association but also cover our costs'. Some organisations believe this has been a widespread issue: 'I think historically my predecessor and many charities would just go for every pot of money available and end up with problems….Now more than ever before we are very good at saying yes to what suits us…and just as important being astute at saying "no that isn't for us".'
Charities describe other organisations bidding for work they cannot deliver well. A local infrastructure organisation said 'We have seen local organisations providing great services lose out to larger out of area organisations, [and] without exception this has resulted in poorer services to those accessing the services, something that is agreed in private by the commissioners.' This can be driven by organisations submitting very low bids, either to undercut the competition or because they haven’t estimated the true cost of delivery. Several organisations describe addressing this challenge by becoming more selective about which contracts they bid for, and only bid where they can recover their costs.
Charities express particular concerns about the quality of services run by other organisations.
- Lack of local knowledge or local presence. Many charities express concern about the quality of services run by organisations without local knowledge or presence. This is particularly challenging for smaller groups or organisations when they are asked to support a failing organisation for free: 'We have seen external charities come in and struggle to deliver, struggle to recruit volunteers and making unreasonable demands for help/contacts on local groups, especially the old provider.' One small organisation described the staff of national organisations as 'visitors' or 'strangers' in the local community. While many organisations won’t bid for work in areas where they don’t have a local partner or presence, this is not universal.
- Charities undermining the ethos and success of predecessors. One user-led organisation described their experience of another organisation undermining their progress: 'A large local provider used their power and influence to take on this contract and undermine the user-led ethos that had been established over 18 months. The organisation had shown little interest until the [network] had started to establish a strong voice and identity and resources were attracted.' They described a decrease in quality.
- Delivering the minimum required by the contract. 'There are organisations that game the system, and produce outcomes that are not aspired outcomes for service users, but tick a number of boxes to enable them to illustrate that they are delivering to a contract rather than to the people that need their support.'
- Lack of processes and procedures. Larger organisations felt that some smaller organisations needed to improve the quality of their work and processes to make them better partners for delivery, and this is also echoed by some smaller organisations.
Trust in the quality of other organisations is vital for charities to want to work together. Several suggest that organisations need to improve the quality of their work before involving other organisations.
Unwillingness to collaborate and hostility
Charities express concerns about others taking a monopolistic approach to delivering their mission, driven by a desire to increase market share. Some view partners pulling out of partnership bids at the last moment and putting in rival bids as a way of eliminating the competition. A major national organisation described their experience of being pushed out of a potential partnership by the leadership of a housing association, in their view driven by a desire for power and control. This aggressive approach contributes to charities viewing other charities as threats rather than potential partners, and limits the benefits that can come from variety within the voluntary sector.
The majority of organisations have indicated that they are open to working in collaboration with others, but several feel that others are not open to collaboration. Some charities think larger organisations are not open to partnership because they don’t need partners to survive, because they already have a set pool of organisations they will work with, or because they simply don’t know about smaller organisations. One large national organisation indicated that large social enterprises have not been open to working with others: 'I wish they would have a bit more respect for their colleagues in smaller organisations. With size and scale, [there is a] presumption they know how to do things better. [They are] not willing to keep their minds open to what the opportunities might be, and the value organisations might bring'. A number of large organisations described changing their approach to become more collaborative in recent years: 'We had hardly any partnership organisations, we had a handful we worked with to tender and deliver contracts with. We went for most things on our own. We realised over the last few years, that didn’t do us any favours. You don’t want to get a reputation for being an organisation that won’t partner and that will just take work off smaller organisations and put smaller organisations out of business'. Some larger organisations describe investing time and effort to rebuild the trust broken by other organisations.
While organisations reflected that smaller organisations are generally open to working in partnership, several reported a level of hostility from smaller organisations. There is an awareness that this suspicion comes from difficult past experiences, which can be overcome through communication and building trust. Others who have encountered smaller organisations unwilling to partner feel their organisation is misunderstood: 'We encounter suspicion about us as a large provider when we are simply trying to stay in business to provide a quality service. We also experience the loss of contracts and are simply trying to counter this by bidding for services in other areas where we think we can offer quality provision to the local community.' Some larger organisations note in some smaller organisations a 'reluctance to change how they worked locally because they had worked in a certain way for a very long time'.
Lack of cooperation during the transfer of services from one provider to another causes significant tension between organisations and is damaging for people who use services. Some smaller organisations have also felt frustrated when their work has been taken on by a larger organisation or consortium, that has subsequently not taken up their support to ensure a smooth transition. Several organisations of different sizes report organisations 'playing games' with TUPE, either because of lack of knowledge or deliberately. Behaviours can include:
- not giving information until the last minute and then saying only a proportion of staff can transfer, forcing the new provider to start delivering an understaffed service and rely on agency staff
- refusing staff annual leave up until the point of transfer
- refusing to offer staff equivalent conditions
- withholding the support plans of service users.
It is clear that these negative experiences have an adverse impact on charities and the support they can offer. They can influence how charities view each other over time, and the level of trust between charities. Negative experiences are not isolated - they have a ripple effect. One negative experience can hinder a range of subsequent opportunities to collaborate.
Understanding collaborative practices
While charities have negative experiences of working with each other, there are also examples of very successful collaboration. Even within the constraints of commissioning and procurement practice, organisations have found ways to work with one another. We have collated several case studies showcasing these examples of collaboration, and below we summarise some of the common ways in which charities collaborate.
Finding and selecting partners
Our research found that some organisations are open to working with any type and size of organisation, whereas others have narrower preferences. Charities express preferring to collaborate with existing partners, building deep relationships over time. Some charities are more open to working with organisations of different types and sizes than others.
Charities of different sizes report difficulty in finding the right organisations to work with, with many highlighting a lack of alignment on values, culture and ways of working: 'We couldn’t identify a lead to work with. There were a couple of organisations that were positioning themselves as leads, but from our experience of them and how they work, we didn’t want to be subcontracted to them, we didn’t feel it was the right fit….We were kind of in a situation where we didn’t have a lead provider to work with'.
Organisations have a range of ways of finding and selecting partners. Methods include the following:
- Putting out a call for expressions of interest, and scoring potential partners
- Meeting organisations at market engagement events, or asking commissioners for recommendations
- Using personal contacts, often held by senior leaders
- Asking local staff for recommendations, or utilising a team or staff members dedicated to partnership working
- Going through local networks or groups, including CVS organisations
- Developing 'locality plans' when expanding into new areas
- Online research, including researching the quality and reputation of partners
- Approaching organisations directly
- Approaching a pool of 'tried and tested' partners
When delivering commissioned work, larger organisations are more likely to use more approaches similar to the commissioning process to find partners, such as an expression of interest process or market engagement events. Some organisations spend more time developing proactive partnerships and describe 'fortuitous' and 'unexpected' partnerships that come from networking and developing a reputation for partnership working. A minority of larger organisations told us about connecting with CVS organisations to find local partners.
There is a fine line between thinking carefully about which organisations to work with, and creating barriers for potential partners. Some of these approaches may disadvantage organisations that do not have an effective online presence, that are not well networked, or would find it difficult to attend market engagement events.
Bidding for and delivering contracts in partnership
Charities collaborate with one another to bid for and deliver contracts. In particular, charities support organisations smaller than them in the following ways:
- Scoping and bidding for opportunities. Examples include federated organisations having a Memorandum of Understanding (MoU) with neighbouring network members, involving partners in the whole bidding process, and ensuring smaller partners are free to be a part of rival bids.
- Building capacity of smaller organisations within contract delivery. This can include supporting smaller organisations with bid writing, impact monitoring and service modelling, even if the larger is the subcontracted organisation.
- Taking on risk on behalf of smaller organisations. One larger organisation described developing a consortium with smaller, local organisations to access social finance: 'We took all of the risk on that...they shared the upside and we took the risk of the downside.'
- Supporting smaller organisations to meet funding requirements. A national super-major charity negotiated with a commissioning authority so they could offer Black, Asian and minority ethnic (BAME) organisations additional support, via group webinars and one to one support, to meet commissioner requirements. At the end of this process the larger organisation made a recommendation as to which organisations could meet the requirements, taking on some of the risk of making that recommendation.
- Influencing commissioners. There are several examples of larger organisations ensuring reporting processes are not too onerous for smaller partners, negotiating with the commissioner if smaller partners encounter difficulties delivering or simply using their name to offer reassurance to the commissioner.
- Working well with partners during delivery. Practices include regular communication, co-location, transparency, joint policies and fair funding as well as more intensive capacity building of smaller partners. Some organisations are willing to take on more work if partner organisations are struggling to deliver: 'If you're struggling, we’ll pick up some of the work, but we'll also pick up some of the resource and vice versa.'
The most common mechanisms for working in partnership to deliver contracts are a prime provider model and consortia, with the former being the dominant model. In prime provider models the largest organisation is often, but not always, in the lead. Several larger organisations said that commissioners prefer prime provider models, and they prefer the simplicity of that contractual relationship. Consortia can be effective and successful, but many organisations describe difficulties in negotiating decision making with lots of partners.
While alliance working was rarely mentioned by participants, we know there are successful examples. For example, the Plymouth Alliance brings together local organisations, ranging in size, in partnership with local commissioners to deliver services for people with multiple complex needs. Several shorter-term contracts were replaced by one long term contract without specified outcomes, making it easier to work together to make service improvements. Partners describe the need to overcome fear of loss of identity and control, and emphasise the importance of focusing on the community first, and the alliance second.
Beyond contract delivery
Where it is not possible or effective to deliver a contract together, organisations find other ways to work collaboratively.
- Not underbidding for contracts. Several charities describe the importance of not subsidising contracts with voluntary income, because it gives the commissioner a false idea of what is needed to deliver the service and locks out smaller organisations.
- Sharing infrastructure and resources. Some larger organisations bid for work alone, but then build up connections with local organisations to share their infrastructure or back office functions. This can include sharing IT systems, pooling resources to cover meeting spaces and pay for staff time in smaller organisations, and offering free training.
- Buying in the support or services of smaller organisations. For example, paying a charity representing a marginalised group or community to deliver training and development.
- Influencing commissioners. Some larger organisations push back on commissioners on behalf of themselves or others: 'We are quite bold like that. And I think that also gives some local players a bit of steel, where they see us speaking up. Because it’s not our only contract, we can be bold about it. If you don't change your behaviour to some of these local players, or to us, then you can go on our naughty list and we'll serve you notice'.
- Facilitating flow of money to other organisations. Some larger organisations have created grant making programmes to support smaller organisations, whereas others have taken a facilitative role to, for example, ensure smaller organisations can access large funds (such as the Tampon Tax fund). A super-major national organisation keeps some money back from the contract to create ‘innovation grants’ for smaller organisations, subsequently supporting those organisations to put a business case to commissioners for further funding.
- Stepping back. Many, but not all, organisations say they will not bid for work if they think the current provider is doing a good job. One organisation decided to transfer a service to another provider: 'We actively chose not to bid for a certain contract, but to support others bidding with the intention of transferring our service to the new provider. This was part of our transformation process which aims at focusing on core work'.
Outside of contract delivery, organisations described using cooperative consortia to buy and sell resources more effectively. Informal collaboration and information sharing through networks is very common. Several organisations advocated the benefits of being part of a federated network for mutual support and learning. Only one organisation talked to us about considering a merger, perhaps because this was not common at the time of conducting this research or because this is viewed as organisational failure rather than the start of collaboration with another organisation.
There are a range of approaches organisations use to combat the challenges of collaborating with other organisations. Whilst many of these approaches are applicable to a range of organisations and contexts, there was recognition that no single approach would be universally successful.
Sharing power and knowledge
Several participants describe sharing their power within partnerships, with some explicitly using the language of ‘power’. There are various factors that can give an organisation power or advantage, as described in the definitions section of this report. Power is relative and depends on the context. A comparatively large organisation may have more power than a group of smaller organisations, but they may lack power compared to a funder or a larger organisation. Collaborative organisations often consider where they may be advantaged compared to others in the partnership and attempt to level the playing field.
Partners often describe feeling locked out of decision-making during bidding and delivery. While it is challenging for lead organisations to coordinate bidding and delivery to meet deadlines and targets set by authorities, there are examples of charities ensuring all partners are involved. These actions can include:
- Sharing the intention to bid with incumbents
- Sharing the full text of the bids with partners, being clear on deadlines for contributions during the bidding phase
- Being on the 'end of the phone'
- Encouraging commissioners to include partners in all meetings
- Giving partner organisations a say in who should lead
- Supporting smaller partners to be involved in the bidding process according to what is manageable for them
- Make it safe for smaller partners to express their views about the work and partnership
Another way charities seek to level the playing field between partners is by developing mutual and reciprocal relationships with partners. These partnerships draw on and recognise complementary skills and expertise. A local organisation that subcontracted a national organisation reported: 'This has been a positive experience so far as it has enabled us to use our local knowledge, links and insight and then to use their experience of delivering a similar service in another area as well as their particular experience of writing these types of bids. They were respectful of us and our local knowledge, links and experience'. The best examples of partnership involve all partners being open to learning from others, regardless of size.
Aligning values, expectations and ways of working
Most organisations want to work with organisations that share their values and culture, such as a commitment to person-centred working. Some organisations struggle to work with different types of organisations: 'We are quite creative, and funky, and youth…they are not a youth organisation…they do a perfectly good job, but they are quite rigid in their thinking, they are not a creative'. Many say they find themselves aligned to organisations of different sizes, but some smaller organisations see the professional and risk averse approach of larger organisations as incompatible with their ethos.
Most organisations seem to struggle to work with organisations that have very different processes and systems, but several describe working through these differences. Larger organisations struggle when working with organisations that may lack safeguarding and data protection policies and procedures, have poor governance, lack of human resources, financial, digital and data monitoring competency. However, some larger organisations recognise that organisations without these elements can still do good work: 'They’re really good at community stuff, and good at delivering grants, and good at being responsive but actually delivering contracts is not their thing'.
Organisations also struggle to adapt to the processes of organisations that are larger than themselves: 'Sometimes the systems can be over burdensome….Bigger organisations tend to have more bureaucratic systems so sometimes it means that you can move a bit less quickly and be a bit less creative'. Some individuals demonstrate the importance of having compassion for the differing pressures experienced by those working in larger organisations. Successful partnerships are often based on aligned values, expectations and ways of working, whilst also allowing for organisational difference and independence.
Fair and effective management
Within partnerships, poor delivery can be a significant source of tension. Some organisations describe difficulty in managing partnerships when organisations do not deliver what was agreed, deliver poorly, or do not put the right systems in place: 'One of the organisations in the partnership we managed was not delivering to target and got very aggressive when this was raised. After giving them the opportunity to work differently; which they didn’t; they were removed from the partnership. This caused a lot of relationship difficulties'.
There are several factors that can support successful partnership management, and help to avoid or manage disagreement during delivery:
- Early and honest discussion, clearly setting out the expectations of all organisations. This ensures partners understand what they are committing to and decide whether it is right for them.
- Addressing any disagreements as soon as they arise.
- Regular communication with one point of contact.
- Ensuring the work is connected to governance structures in every partner organisation.
- Conducting due diligence.
- Developing an MoU and relevant legal documentation, based on trust. Agreements should be meaningful and accessible for all parties and set out how they expect to work together in addition to terms on dispute resolution. A partnership agreement before bidding for funding can be helpful.
Organisations of varying sizes say they want honest and neutral brokers to help form partnerships, and value external support: 'We brought in independent specialists to work with us as organisations to iron out all of the difficulties, all of the difficult conversations you have to have to develop the consortia'.
Ensuring flexibility, support and proportionality is vital when working with smaller organisations. Several larger organisations recognise they need to be able to compromise and support smaller organisations. While many are willing to give support to partners when delivering contracts, prime providers emphasise this cannot be limitless: 'If it doesn’t work we will speak to [the] commissioner about finding an alternative supplier – at the end of the day we have said we will deliver something…and all partners have to meet that'. Even the most supportive lead organisations need partner organisations to deliver: 'When you are a prime and you are doing the governance, that doesn’t mean you don’t need them to meet the KPIs, provide the reporting info, provide the data on time'.
Time and resource
Successful partnerships require investment of time and resource. Several organisations describe not having the time or capacity to develop partnerships. Smaller organisations find it particularly difficult to find time to network with other organisations: 'As a small charity, forging links to explore possible collaboration with other organisations can be difficult due to resources'. This can feel like a waste of resource when money is scarce, and it takes time away for direct delivery. Even larger organisations seem to find it hard to find time for collaborative work: 'I have been involved in 2 projects to bring together partners to apply for contracts and grants. This has included very small organisations and larger social enterprises and national charities. It takes a long time to build trust and to make decisions on shared costs in developing bids. Both projects have stalled due to lack of capacity in all partners'.
There is broad consensus that it is better to develop partnerships in advance of funding opportunities and avoid a 'marriage of convenience' for specific tender opportunities. Charities describe several benefits to developing a partnership in advance of a tender coming out:
- Freedom from the short timescales and pressures of the bidding process, allowing for 'blue sky thinking'. Forming the partnership early may also make the bidding process easier: 'When the tender was released [we] already had the template for delivery and were able to begin writing the bid straight away….Due diligence had already been undertaken'.
- The opportunity to work through issues early and set joint expectations. This gives organisations time to consider whether the opportunity is right for them, and develop supporting agreements.
- Time to support smaller partners to improve outcomes monitoring, accounts and governance before submitting the bid.
Several organisations report the need for there to be 'good people' and 'good will' to make a partnership work, with some describing the impact of hostile individuals or strained relationships. In every case study we have collected, relationships have been emphasised as vital to successful collaboration.
Trust is a vital component of any partnership. For some trust is more important than the formal aspects of the partnership: It is 'much more about instinct and trust. [The] Contract is the backstop of a relationship. If you had to get to the contract, things have gone quite badly wrong. The delivery won't work if you don't trust [each other]'. Organisations may find it more difficult to develop trust with others, particularly where they work in different ways, but this is both possible and worthwhile. One larger organisation described needing to trust in the 'latent quality' of very small groups and organisations when they may not have the processes of larger organisations.
The importance of visits and regular communication in person to develop trust were emphasised: 'It wasn’t until they came to our premises and they could see [the] quality of what we were delivering there that all of a sudden the conversation shifted and we started to get some appreciation of the value of what we might bring and [were] taken seriously'. Others recognise that humility, looking at themselves first when something goes wrong, supports good partnership working.
TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations. These regulations protect employees if the business in which they are employed by changes hands.
Bid candy is where an organisation is included in a tender document (with or without their knowledge) by a lead provider, but subsequently not given any or sufficient funding when the lead provider wins the contract.
A prime provider or lead provider is an organisation that is contracted by a commissioning authority to deliver services on their behalf, and subcontracts other organisations to deliver parts of that contract.
NPC (2020), State of the Sector 2020: Where we stood as the crisis hit.
A consortium is an association of several organisations.
Early in the procurement process, a commissioner or lead provider may ask organisations that are interested in delivering a service to submit an expression of interest (EOI) explaining what skills and capacity or resource they would bring. Commissioners or lead providers may develop a short list from this process.
A memorandum of understanding is an agreement between two or more parties outlined in a formal document, but it is not legally binding.
There are different definitions of BAME organisations but key characteristics can include whether they describe themselves as a BAME organisation, whether people from BAME backgrounds make up 51% or more of their governing body, and whether they provide support specifically for or work on behalf of BAME communities.
An alliance is an agreement between two or more individuals or entities stating that the involved parties will act in a certain way in order to achieve a common goal. An alliance contract is one contract between the commissioner and an alliance of parties who deliver the service. All parties work towards the same outcomes, and risk is shared across the alliance.