This article presents empirical findings about the distinctiveness of smaller voluntary sector organisations (VSOs) involved in welfare service provision, based on in-depth, qualitative case study research. We identify a series of organisational features and practices which can mean that smaller VSOs are distinctive from larger organisations. These include how they are governed and managed, their approach to their work, and their position relative to other providers. To explain our findings, we draw on the concept of stakeholder ambiguity. This idea was posited by Billis and Glennerster (1998) and is commonly cited in relation to distinctiveness. We identified several manifestations of stakeholder ambiguity and confirm the concept’s explanatory importance, although we argue that our understanding of distinctiveness is enhanced when stakeholder ambiguity is considered alongside other closely related features, such as being embedded in a local geographic community and informal familial care-based organisational cultures. Our findings also highlight the fragility of smaller VSOs. We argue that this combination of distinctiveness and fragility creates a tension for social policy makers, many of whom recognise the value of smaller VSOs and the risks that they face but must weigh this against a requirement to allocate resources for statutory services as effectively as possible.