The real factors stopping female-led charities and small businesses maximising their impact
They outperform male-led businesses and bring fresh thinking. So why are women-led organisations overlooked and underfunded?
This report is supported by PayPal Giving Fund
The idea that women aren’t running organisations is a myth: in the UK charity sector, women make up between 56%-63% of CEOs, and are most in evidence running small charities. Stats from NatWest and Beauhurst’s New Startup Index show that out of the 900,000 new UK ventures launched in 2023, a record 164,000 were female-founded — 18% of the total.
Yet in that same year, female-only founded startups received less than 3% of venture capital funding. The evidence shows that women-led organisations make an impact: they have larger average revenues than male-led companies, and create higher job growth. Many female founders are more motivated by factors like the desire to make a difference and contribute to society.
And the killer figure: the UK economy could grow by £250 billion if women started and scaled businesses at the same rate as men.
So why isn’t the dial shifting faster? And why aren’t investors backing women?
Through in-depth interviews with some of the country’s leaders and experts across the commercial and for-impact sectors, The Female Lead explored the economic, technological and cultural factors that can supercharge female-led small organisations: from overhauling a broken funding system to modernising boardroom culture, resetting our understanding of risk, ‘clustering’ and collaborating, and harnessing the rapid growth of AI tools.
The fundraising hurdle
“My career success is largely down to being really good at asking men for money,” says Debbie Wosskow, a multi-exit entrepreneur and Co-Chair of the government-backed £255 million Investing in Women Taskforce. “That's quite weird if you think about it”.
In our conversations with leaders and experts, one topic dominated: we need to overhaul the funding system.
Close to a third (29%) of UK charities saw a fall in voluntary income in 2024, according to Blackbaud data. The major factors they gave for this were being impacted by the macro economic environment and not being adequately resourced, meaning grants and other funding are now even more key.
“Walking into a room as a woman and asking for money might even be looked at differently from a man doing it," says Erin Hope Thompson, the founder of The Loss Foundation, who feels that assertive fundraising doesn’t come naturally to her. Thankfully, her team includes a powerhouse female fundraiser. Funding is also essential for commercial scale-ups.
Women tend to set more realistic projections than men, explains Tom Kelly, Head of SMB BB Europe at PayPal. “That’s an advantage in many ways, but the area in which we see that it’s a significant disadvantage is in fundraising. A male entrepreneur who has a tendency to overestimate potential fits the blueprint.”
Investors want unicorns, so they’re not excited when they get realism rather than optimism from female entrepreneurs.
The impact is that some women are discouraged, and may be unable to get started. Ayesha Ofori is the founder of Propelle, an investment platform for women. Despite her strong credentials — she had an Imperial College physics degree, an MBA from London Business School, and experience at Goldman Sachs and Morgan Stanley — she struggled to secure funding and saw a clear bias in the system. “When it comes to fundraising, it doesn't matter what I do, they're just not going to give me the money. It was like a smack in the face.”
“I've even had one woman at a VC that I pitched, who messaged me on WhatsApp saying: ‘I'm really sorry. The board is all men. You tick every single box. I just wanted to apologize because I'm disgusted.”
Ayesha Ofori thinks a major culture change is needed, to encourage more investment in diverse founders, as well as more targeted events and programmes that focus specifically on introductions to relevant investors for women-led businesses. Wosskow is focused on the lack of female venture capital partners - only 11% are women. “Female investors are twice as likely to back a woman compared a male investor, that’s the issue,” she explains. Her taskforce aims to increase female investors, including attracting them from overseas, so that women are more in control of how funding is allocated.
Playing to women’s strengths
For the few businesses who get through that funding funnel, the playing field is uneven due to cultural myths which misunderstand their strengths. The Female Lead’s 2021 ‘Women at Work’ research with Dr Terri Apter uncovered five myths about women at work, which can impede their career progress. One is the perception that women are risk-averse - which is largely a stereotype. Yet it is a pervasive one.
Michael Hayman, a co-founder of communications consultancy Seven Hills BPI, and the former chair of the UK’s Small Business Charter, notes that women are often described as taking a more cautious approach to risk than men, and that this can hold them back. It’s an area that he feels needs more investigation: “My sense is that experience is the cure: the more generations of successful female role models there are to fall back on, the better.”
The investment community also needs to rethink attitudes to risk, Hayman argues, as part of a mature approach to business.
In contrast, recognising women’s strengths can bring agility, collaboration and innovation to the economy.
The Loss Foundation reaches thousands on a budget of just £100,000 per year. Its founder Erin Hope Thompson says she is "learning to love” being small, as it allows for agility, creativity, and resilience, especially during economic downturns. “We can continue to stick to our values without worrying that big size interferes with that. We don't need a lot to carry on. So in some ways, small has become our strength."
Ruth Marvel OBE, CEO of The Duke of Edinburgh's Award says that modern leadership thinking is at last recognising that the qualities traditionally attributed to women in the workplace are not weaknesses, “but in fact superpowers”. “In the charity sector I am privileged to work with phenomenal female leaders who are demonstrating how qualities like collaboration, low ego leadership, empathy and radical flexibility can help charities convert scarce resources into serious impact,” Marvel added.
And Paula Mullin, Acting CEO for Midlands Engine, says that female entrepreneurs approach growth and impact entirely differently from male ones in her experience. “Those businesses are bringing new and fresh thinking. They're going to the market in a very different way to their male competitors.”
In September 2024, she brought together around 400 mostly female-led organisations and was struck by the optimism in the room. “This is not the traditional boardroom model that they're bringing. They work in a very different way. They're leaning into hybrid working, innovation and technology.”
Women entrepreneurs naturally embrace partnerships in her experience, which could lead to major economic advancements, she says. She has noticed female-led businesses “clustering”: working together for cross-sector innovation and opportunities across industries, particularly in manufacturing supply chains in sectors like defense and aerospace.
The last 18 months have also seen a step-change in female organisational leaders integrating technology into their work, with huge potential for creative solutions and efficiency, according to Carrie Green, the founder of the Female Entrepreneurs Association. “In my community, women are even naming their ChatGPT, because essentially it's become their AI assistant. I see a lot of women who are trying to juggle kids, caring for elderly parents with building a business, or having part-time jobs, or even full-time jobs on the side. They are able to make a lot more progress by leveraging clever technology and AI.”
“If you use it well, it's like having an extra person,” says Anita Brightley-Hodges, the co-founder of Irene & Jenny, a two-person luxury jewelry business run with her daughter. She uses ChatGPT to help create social media marketing content, as well as other low-cost, easy to navigate services like shared digital workspaces and tools for project tracking and making professional visuals without specialized design skills. “It's part and parcel of what you do every day,” Brightley-Hodges adds.
The women-led organisations we spoke to highlighted storytelling and a strong focus on marketing, PR and brand identity as their leverage when competing against large businesses. “It's very important to establish a brand early on,” says Anna Richey, who with Alla Ouvarova founded Two Chicks, which sells egg-based products including separated egg whites. “So when a competitor comes in, you have a brand identity.” They observed that smaller brands tend to be more creative and innovative in their product offerings.
“I think if you're the first to market in the way that we were, that also helps because you get a following,” Ouvarova said. “We're an egg white in a carton, we don't have a magic recipe.”
‘We’re all a little bit in the trenches’
Women-led organisations are supporting each other through an uncertain economic period. Amid a backdrop of increased National Insurance costs, stalled economic growth and macro economic factors like the pandemic and Ukraine war, many are in firefighting mode and peer support is essential.
Polly McMaster, founder and CEO of The Fold, has leaned on her network far more in recent years, and noticed other women doing the same. “I think in the past, people were worried about talking to competitors, and I think to an extent that's been put aside. It’s like: ‘We're all a little bit in the trenches here, let's help each other’.”
Ayesha Ofori from Propelle called for more structured support for women leading SMEs, having found existing organisations difficult to navigate and not always helpful. Richey and Ouvarova from Two Chicks feel that there is still work to be done around women’s business groups, particularly in terms of access to experienced industry advisors. They have set up their own initiative, Future Female Entrepreneur, to try to help.
But there’s also plenty to be optimistic about. Low confidence is well-known to affect women’s organisational success, but other qualities are advantageous, says Carrie Green from the Female Entrepreneurs Association. “Imposter syndrome is a term I hear probably every single day. If I do a workshop with women, the biggest thing in their way is the way they think about themselves: their feeling that they're not enough. But I also think that it's a huge strength. Women are nurturers, and leading with love and empathy is a very, very powerful thing.”
“Women are not underrepresented in the non-profit sector, and yet struggle to reach the very top on too many occasions,” says Vanessa Babouram, the Vice President, UK and Ireland for PayPal Giving Fund, a charity that is PayPal’s online fundraising platform to facilitate charitable giving.
This means advocating every day for women colleagues, she says, “creating a space for them to be seen, when sometimes team members with qualities more generally associated with men such as ‘executive presence’ or ‘authority’ overshadow great achievements delivered through true collaboration away from the traditional command and control model of leadership."
Social media offers a chance for women to form communities and write their own narratives, she explains. While traditional media is still centered around how women look, “social media is obviously really powerful. The communities are out there for women to tap into.”
Wosskow noted that female entrepreneurs running consumer businesses can capitalise on the opportunity to leverage the spending influence of female consumers, who control over 70% of disposable income. “I think I'm always in the ‘reasons to be cheerful’ camp, and I think as a female entrepreneur, you do stand out.”
If business leaders and Government dismiss women, or fail to get them access to essential funding, they risk missing out on the social economic powerhouses of the future.
Edwina Dunn, the founder of the Female Lead, said: “We need to urgently address the chronic funding challenge, welcome the different ways of working that female entrepreneurs can bring, and ultimately think about the benefits of backing women, rather than overlooking them.”
Learn more about PayPal Giving Fund.