Independent Review of Civil Society's Relationship with Supermarket Retailers

The Problem for the Small Charity Sector

The UK is experiencing a significant decline in the small charity sector, with more small charities closing each year than opening. This is concerning because 78% of small charities work on a local level, compared to only 5% of super-major charities. Consequently, this trend is leading to a national social welfare crisis, with those who require community-based support suffering the most.

The Problem for Supermarket Retailers

94% of global consumers think that businesses should do more than just make money (they should give back), and in the UK, 78% of people are concerned about the health of those who are most vulnerable in their communities and want to see more support for local community projects and charities. However, three quarters (73%) of charities and community groups say they struggle with opportunities to meet businesses, including supermarket retailers. Simultaneously, supermarket retailers are struggling to successfully form and commercially capitalise on mutually beneficial relationships with small and local charities at scale. Our research explores the reasons why this is the case.

Research Results | Community Champion Insights

In 2019, Charity Nest launched a service designed to make fundraising space more accessible for small and local charities. However, during a 5-month period, our team made 9371 phone calls to Community Champions and were only able to book space consistently for a limited number of fundraisers. These insights inspired our initial interest in further research.

Consequently, in early and mid-2021, Charity Nest conducted a series of qualitative research sessions with Community Champions from several major supermarket retailers and discovered a series of challenges.

Community Champions (and retailers in general) are apprehensive about working with less established charities. This attitude ultimately eliminates fair opportunities for small and local charities, which are often in need of the most support. Our research suggests that this culture exists due to the more complex nature and associated risks of working with these types of charities, such as fraud, unprofessional behaviour, and inconsistent feedback. There is also an absence of the infrastructure required to measure and communicate local impact so that it is valuable for brand-wide CSR objectives and PR.

Research Results | General Retailer Insights

Shifting consumer trends now mean it is increasingly important that a brand’s charitable efforts resonate with its customers. The best way to achieve this goal is to support multiple diverse causes, ideally within the local community, where the impact will be noticeable.

Despite this, major brands, including some supermarket retailers, continue to devote significant resources to partnering with well-established major and super-major charities. This strategy, albeit initially more convenient, risks being significantly less effective, both in terms of localised impact and long-term commercial interest.

Consequently, brands must take a proactive approach to ensure diversity, inclusion, and accessibility for a series of local charitable groups, in addition to investing into the infrastructure required to ensure that these relationships yield commercial ROI. Supermarket retailers, in particular, must learn how to work with small charities and authentically communicate the positive outcomes at scale.

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