Thursday, 9 December 2010
Avid readers of Fab will know that I’ve spent time in the US, most recently in April this year, picking up ideas about how non profit sector leaders are being supported. While at the GEO conference in Pittsburgh I learned of an initiative whereby foundations support sector leaders in taking sabbaticals allowing them the kind of space for personal development they would never otherwise have and also hugely benefitting their organisations. I was really pleased that ACEVO was able to host Claire Peeps from the Durfee Foundation based in LA which had supported this work at our National Conference to explore how it could be applied to foundations here.
Of course international learning works both ways. Last week I was in Toronto speaking to Philanthropic Foundations Canada about the work ACEVO has done on full cost recovery. The previous day had seen the launch of the Canadian taskforce on social finance which had drawn very heavily on similar work in the UK. It was strange to be sitting in an auditorium in Toronto hearing about the great example of a social impact bond pilot at HM Peterborough being led by the St Giles Trust, but it was a very powerful illustration of how much influence the UK sector has around the globe.
International learning can be really valuable, but an understanding of the cultures concerned is vital if those lessons are to have relevance. My colleagues in Euclid Network, have found this a particularly interesting in promoting networks of civil society leaders across Europe. How does one do this in Germany, where the whole concept of leadership is a fundamentally difficult one?
The Coalition Government has spend a great deal of time in looking at the USA as a model for many of the kinds of reforms which they want to see. Various gurus have come across the pond to help the government articulate the Big Society narrative. In some areas such as policing and welfare to work provision it seems that these will be fruitful lessons.
But giving is different. I’m no expert on the topic, but in my conversations with non profit folk in the US about the relationship between the public, the state and the sector, it’s clear that America’s history and national narrative, going right back to the founding fathers, looms large.
America was created in revolution. It was a reaction against a government, that of King George III, but in many ways that identity has become a reaction against government of all forms. Hence the Tea Party can attract so much support to the bafflement of Europeans.
The motivations for philanthropy in the US need to be understood in this context. The idea of giving as a duty is stronger in the US than it is in the UK because there is less shared expectation or desire for the state to act. It’s not so much that Americans give because the state can’t act, its more that they give because they don’t want the state to act. Therefore the culture of giving has become engrained over generations and become a norm.
This is a very crude generalization, but it is important to understand some of these differences. DCMS want to encourage philanthropy because they have less money to fund the arts. Public spending is going to fall in many areas such as the arts so giving must increase to save national treasures as well as essential services.
Even if people accept this necessity, it’s not quite the same motivation for giving as you find across America. Britons would still rather the state acted in the first place. And therefore the lessons won’t always quite fit. For a change in cultural norms in the UK to result in more giving people need to feel more than a greater sense of altruism or community spirit, and indeed it will take more than people knowing that the state is unable to act. For the culture of giving to better reflect America people will need to feel that they don’t want the state to act, and that’s a much bigger task for the government.
Of course I am all for initiatives to promote more giving, and there are definitely lessons to be learned from the US, but these initiatives need to be in a UK context and not pretend that we just less generous Americans.
Monday, 1 November 2010
In the UK alone our domestic policy to drugs is a manifest failure. Penalties get harsher, more and more substances are criminalised, and yet drug consumption continues to rise. Talk to the leaders of charities working with addicts and its clear that it is the consequences of the criminality associated with drugs; with the poverty, the exploitation, the spirals of deprivation, which is the fundamental problem.
I am not coming at this really from an ideological point of view. I completely understand the motive to want to protect people from harmful things by making them illegal. Governments of old made perfectly reasonable assumptions when banning drugs that this would stop people using them. My problem with the status quo is simply that it doesn’t work. In this debate facts simply are not the driver of policy, fear and misunderstanding take the lead.
This government has been clear that it has a response to areas of policy where government interventions don’t work. It’s called Big Society. As I’ve blogged before I think that Big Society is best conceived of as a political philosophy rather than a coherent programme of work in its own right; an approach based on devolving power and building personal and community responsibility. Speech after speech from senior members of the government has declared that government can’t have all the answers for the tricky problems which society faces. Sometimes society itself just has to be left to found the answer. Where government gets in the way it should withdraw and let the people take charge.
The Big Society narrative has of course been used in the context of championing those who work in communities affected by drugs including those who work with addicts. The sector’s record here is outstanding and of course more should be invested in treating addicts as people with a medical problem rather than a criminal one.
However is there not a more fundamental application of Big Society principles to the drugs problem (and I’m really posing the question here rather than being sure of the answer!)? If government is the problem in the sense that it is the criminalisation of drugs which is more harmful than drugs themselves, then shouldn’t the harmful influence of government simply step back. Shouldn’t we decriminalise all drugs and then focus on a social and medical set of interventions to build the communities which have been ravaged by drug related crime? Take away the criminality and you take away the illegal drug trade with all its associated harm. You change incentives and you change opportunities in those communities no longer driving people towards the drug trade as the only available enterprise. You empower people to seek help without the fear of being locked up. In short you change the whole structure of communities affected by drugs to seek solutions rather than be stuck in spirals of harm.
David Cameron is keen to be pictured as the radical. Big Society is his vision for changing the country. The question therefore is just how radical is he prepared to be to empower society to solve the problems that government can’t.
Thursday, 7 October 2010
On that latter point I fear that they will have left disappointed. In spite of roughly half of all the fringes being badged Big Society in one way or another, the difficulties in getting a handle on the policy implications remain.
Lord Wei was a big draw. He spoke at two of our fringe events, as well as the Respublica Big Society reception on the Sunday Night. The audience at each were hanging off his every word, often furiously scribbling down what was being said (some were even recording it). Lord Wei spoke about the Big Society as being a society in which “none of us feel small”. He frequently drew on international comparisons apparently to prove that this is now a global trend. His vocabulary was riddled with jargon, such as his debate about the benefits of “bridging and bonding social capital”. He extolled the gains that there could be if only we all formed more coherent groups – and at one point said that something as simple as learning each other’s names could save the state £billions.
It’s crude to take Lord Wei’s comments out of context. His job is to be the muse and when you listen to him speak you kind of know what he’s getting at. But the fact is that his audience perfectly legitimately want to know what this means in terms of how they do their job differently, what it means in terms of policy, and in my personal view in this particular regard he appeared out of his depth.
Lord Wei’s answer to what it all means, an answer also given by Nick Hurd, is that it’s not government’s job to define it. That’s old thinking. Big Society means devolution and localism, groups and communities taking control. We decide what it means. We make it happen. “Set forth and build the Big Society.”
There is of course some logic to that. If Big Society is simply a political philosophy then this is where we are left. The problem is that there is lots of evidence that government is not actually taking that approach, and therefore it is not a satisfactory answer for a number of important reasons.
Firstly government has been seeking to tie all sorts of policy announcements to the Big Society since it came into office. We have seen the announcements about the four pilot areas where local communities will be given extra support in building big society projects. We have the Big Society bank in the offing. And we have the work of the Big Society network, a new body which, as widely reported this week, is in danger of alienating the established third sector. Far from stepping back and letting society get on with making itself Big, the policy fragments which we do have paint a rather rigid picture of what sort of projects constitute Big Society.
Claire Cox from the institute of ideas spoke at our joint fringe with Policy Exchange on Monday night and gave a highly amusing description of Big Society as sanitised, enforced activism where the civil service decide what counts. We’re left with a feeling that the Big Society can be what you make it, as long as the powers that be agree.
There is an broader link here to the Tories views on campaigning. A colleague working the stand for a big national charity this week reported a lot of hostility from party members that they were there to advocate and campaign rather than fundraise. “We don’t give to charity for you to spend the money on campaigning.” A few indiscrete remarks from people close to the centre of Government who should know better have suggested that ACEVO has been foolish to speak out on projects like the National Citizen Service with which we have disagreed. We of course know Oliver Letwin’s position on this from his remarks to NCVO last year. The sector must be careful to protect its campaigning in face of this hostility and there is a clear contradiction between the ideal of Big Society and government not wanting to hear hostile messages.
The second reason why the laissez-faire argument isn’t satisfactory concerns the government’s approach to public service reform. Amongst the less ethereal parts of the Big Society narrative are the very welcome pronouncements about pushing ahead with market based reforms in public services with a clear commitment that the third sector must be able to play a significant role in those markets. The messages from government about removing barriers to level playing fields, reforming commissioning to focus on outcomes, removing bureaucracy, and accessing capital show a good understanding of the challenges which third sector providers face. But getting these market structures right requires some very serious and very specific policy direction from government. Lack of clarity about what and how government wants to buy would be disastrous.
Again in reality, and quite rightly, government is not leaving all this up to chance. There are some important over-riding messages about needing to focus on outcomes and payment by results in the provision of services and different departments across government are bringing about significant changes to the market structures of services. The government understands that good public service markets cannot be spontaneously created from the grass roots.
A third reason concerns the fact that the most radical change which the government is seeking to bring about is coming from ministers who are showing real political bravery and leadership.
I was struck across many of the government speakers on the fringes by how many ministers spoke like they were still in opposition. Asking for ideas and input. Weighing up arguments on both sides and seeking to come to a dispassionate judgement. The idea that Big Society can just be left to happen rather fits into this mould. However, the likes of Iain Duncan Smith and Andrew Lansley (who in my view was the best speaker on the fringe) have shown quite the opposite qualities, demonstrating real boldness in pushing trough their reform agendas. They understand that they have responsibilities to live up to and that their decisions have consequences, and in so doing leave those who need to understand those areas of policy which a clear idea about the direction of travel.
These bold policy pronouncements where they exist, as well as contradicting the idea that Big Society shouldn’t be defined by government, do also present third sector leaders with further confusions. If one looks at the nature of the these reforms to public service markets there is a fundamental inconsistency in how they are being applied. As Sonia Sodha from Demos argued at our joint fringe, in some public service markets we are seeing consolidation and in others a fragmentation. Welfare to work, for example, is moving to yet bigger regional prime contracts for delivery, with a complex supply chain below. The NHS on the other hand, is moving in exactly the opposite direction, with commissioning being devolved to GPs. This inconsistency will make the joining up of areas of public services, vital if the third sector’s role really does mean doing things differently in a way which can reduce spending on those services, much more difficult.
The point is this: facilitating the Big Society requires a coherent policy framework which all the key actors can understand. I suspect that third sector leaders have left Tory conference none the wiser about the Big Society as a concept. We have no reason to buy the argument that defining the Big Society should be left up to us because government has not in fact been leaving it up to us and nor should it. We need to know the rules of the game in which we are being asked to play. Those working with Lord Wei need to understand that reasonable demand and give the sector some answers, if indeed there are any.
Friday, 24 September 2010
No one can be very surprised by this decision, and the sector should resist its natural urge for outcry. Both organisations have done good things over the last few years, but what matters now is how their functions are delivered in new architecture, and how effectively the sector is supported as a result.
There is no doubt that the sector will need ongoing capacity building support if our potential in building strong communities and delivering public services is going to be realized. ACEVO has for many months been arguing for a more demand led approach, and we will be making this case strongly in the forthcoming OCS consultation. Our focus therefore must not be on institutions but on the quality and impact of the support which is provided.
Similarly with the Commission for the Compact, what matters is better partnership working between statutory bodies and the sector. There is a promotion role there which must still be done, although others like Compact Voice are well placed to do that. And there is the accountability role too, which the Commission, because of its lack of statutory power, has never been able to deliver. Greater accountability measures are part of the deal for the new compact, on which Compact Voice is currently consulting.
There is so much still to be decided over the coming months, so it’s vital that we all concentrate on what matters and getting the right outcomes to support the sector.
Monday, 9 August 2010
He also makes clear though that this personal responsibility does not exist in a vacuum, nor is it the whole solution, and that the NHS and government must be there to support and encourage better decisions.
It is interesting because the new government somehow needs to find a way to make conversations about spending less money on healthcare politically acceptable. The Tories knew that any suspicion of being hostile to the NHS or seeking to cut health budgets would be electorally fatal. The Coalition has maintained the promise to ring fence health spending, even though the Lib-Dems did not match that promise during the campaign.
Now I have absolutely no desire for government to spend less on healthcare for its own sake. But as I have argued here before, the focus in our popular narrative on protecting acute care above all else means that we neglect investing in community care and preventative interventions which crucially both cost less money and can stop people getting acutely ill in the first place. The kind of behaviour change which Prof Field speaks of should be our strength as a sector.
The conversation which government needs to stimulate therefore is not how to cut money from the NHS, but rather how can health care and public health be delivered in a way which focuses less on institutions and more on good outcomes for the public. As we know, seeking to close a hospital is met with placards and protests. Yet there no longer being a need for that hospital could be met with celebration.
The third sector has an absolutely key role to play in all of this. Recently Paul Corrigan wrote an outstanding pamphlet for us on how the third sector will be the catalyst for a transformation of the way in which healthcare is delivered through revolutionising the business model and changing the way in which value in healthcare is conceived. The public themselves can add value to their own healthcare, not just by adopting healthier behaviour but by learning more about the long term conditions from which they may suffer. His argument is purely an economic one – although with a clear moral obligation.
I can’t recommend it strongly enough. It will change the way you think about the healthcare sector. You can download it here (you just need to enter your email address to see it).
So how do we get there? This round of NHS reform is going to be crucial for the third sector. GP commissioning consortia could be a huge opportunity for third sector organisations to have a greater role in both provision and in working with clinicians to commission the right interventions for particular demographic groups. Details of the White Paper are currently open for consultation and the ACEVO policy team is working furiously with members to respond.
But it will be a difficult challenge. A colleague of mine was recently hosting a roundtable with GPs to talk about how the third sector could play a significant role in markets for patients with personal health budgets. While very enthusiastic about what the third sector could offer in their local area they ended the meeting asking whether there were in fact any third sector organisations in that area!
That dialogue must be quickly formed if we stand any chance of encouraging behaviour change in the general public to live healthier lifestyles, or create a health service which can respond to the challenges it now faces.
Tuesday, 20 July 2010
Thank you David [Senior from Action Planning, not to be confused with Cameron!] for that very kind introduction. Our partnership with Action Planning means a great deal to us and I am really pleased to be here today in this great venue.
We’ve got a great line up here this morning with the opportunity to hear straight from the horses mouth with officials across government able to explain how policy is developing across departments. My job is to set a little of the context, to explore what Big Society may mean and how it will affect our roles in running charities.
It’s now three months since the election and a result which I don’t think many of us would have predicted. It’s been a whirlwind period for all of us as we try to identify what is at the heart of the new government’s vision, and how new policies will affect us and the work we do.
As the dust has begun to settle it is clear that there are some important narratives which are coming to the fore, and which will dominate policy making across government.
The first of these big narratives is of course The Big Society. While this agenda certainly does need some more development there is a great deal of welcome news for the sector in the announcements which have been made.
I think that many of the principles for which we have been fighting for over many years seem now to be the starting point for the Coalition’s interaction with the sector. Government is talking with great enthusiasm about the importance of vibrant civil life and the role of the third sector in delivering reformed public services.
The likes of David Cameron and Francis Maude are talking about the need for a “smart, strategic state” to make the Big Society possible, avoiding simple state retrenchment and recognizing that the detail of the commissioning process, with a level playing field for the third sector, is what matters.
Words are warm elsewhere too with figures as diverse as Iain Duncan Smith, Chris Grayling and HM the Queen making it explicitly clear that the third sector is central to the new government’s vision.
This is without doubt good news. Our sector’s dialogue with the new government starts from a strong position. We don’t need to work at getting our foot in the door, but rather we should be able to get stuck in to the details about making the relationship work.
The Big Society narrative does however I think present some questions for us here in this room, what you might call the organized part of civil society.
Firstly, as I’ve hinted at, there is still a lack of clarity over what exactly it means. Reports from the election campaign suggested that did not go down well on the doorstep as it failed to make much practical sense to ordinary voters.
It is unclear the extent to which this is an agenda about the third sector and supporting the work of third sector organisations, or a more ethereal idea of stimulating civic action and engagement. On the one hand we have very clear, concrete and very welcome initiatives in the offing such as the Big Society Bank, but on the other hand many of the key individuals who have been at the heart of the development of the government’s vision for the Big Society have tended not been established third sector leaders.
A look at the Big Society website, jointly run by Lord Wei the advisor to the new government on the Big Society agenda, illustrates some of this. The blogs, articles and videos on the site very colorfully illustrate examples of what is Big Society. However, they do not really provide much analysis of how to turn these examples into a broader policy agenda, or indeed how the levers of government can turn this wide scale reality.
Now this lack of clarity is also a significant opportunity for us all here, as it is our collective role to work with government to better define Big Society. ACEVO has been arguing since the election that the rather romantic language used to articulate Big Society needs grounding in the reality of the modern third sector. Stephen Bubb gave a lecture back in May which argued that to achieve the vision of the Big Society we need not just civic action but organized civic action and that means a professional third sector which is well capitalized and business-like.
The second challenge which government faces with implementing the Big Society is a challenge which it will also face in many other areas, which is how to swing parliament and the juggernaut of central government behind it.
The Coalition’s majority is much smaller than those which have been enjoyed by the recent Labour governments, and even then government wasn’t always able to do what it wanted. Parliament will therefore have a stronger role; and the political reform agenda is set to give it a stronger role still. Backbenchers will matter and there is little telling at this stage whether or not the Big Society matters to them.
Ministers and senior officials may “get” the role which the sector can play, but it will mean lots of doing things differently, lots of new structures and systems, and the taking of lots of chances – some of which will of course fail. Convincing the treasury mandarin or the local authority chief executive of the need to take these chances will require sustained policy direction and real political bravery from central government. It will also require a sector better able to demonstrate its impact and make its own case.
So Big Society presents definite opportunities for the sector, and we all have some work to do in developing it further. But there is of course a cloud over all of this.
On the last page of the Coalition agreement, after thirty odd pages of commitments, it says in large letters in the middle of the page: “The Deficit reduction programme takes precedence over any of the other measures in this agreement”.
Spending cuts are the biggest game in town and this is of course the second big narrative of the Ccoalition. This year we have seen the beginning of the cuts, and already we have seen an impact on the work of the third sector with the end of programmes such as the Future Jobs Fund. The budget made clear the enormity of the challenge ahead: an average of 25% cuts in departmental spending over the course of the parliament, £11bn lopped from the welfare bill and tax rises of which many (such as the rise in VAT) will hit the sector and those we serve hard. The Autumn’s spending review will be all important as each department submits its proposals for the 2011-14 period.
Now, there is no doubt that public services need reforming in many areas, and there is the potential for a bigger role for the third sector to deliver those services which are preventative and holistic, and keep people out of the most expensive government institutions like hospitals and prisons. We had a conference with our Health and Social care members yesterday and there was a real buzz in the room about the opportunities for a significant increase in the role of the sector in health and social care. But even optimists like us at ACEVO would see it a little far fetched to believe that the sector isn’t going to be hit hard by these cuts.
When we look back at the last decade or so we have seen a very significant expansion of the third sector. Now while there has been some very favourable specific policies towards the sector in terms of capacity building and capitalization, the real change for us has not been down to these sector specific policies, but rather down to the public service reform agenda, the significant growth in the public services industry and the increase in contestability with more opportunity for third sector organizations to play a role in providing those services. Capacity building didn’t grow the sector on its own. Public service reform did.
In this light we might reflect that however well intentioned the policies around the big society are, and however significant the opportunities for the will be to transform the way services are delivered, the reality is that the savage cuts which we will see across the board are likely to have more significant impact in the short and medium term on what it feels like to run a charity.
We don’t yet know exactly what Big Society means in terms of our day to day jobs, but we do know what losing funding would mean. Big Society could be a very interesting and coherent political philosophy, but we may not feel that this is the time for philosophizing.
Our focus at ACEVO is to support the sector’s leaders through spending cuts, with guidance and advice on collaboration and partnerships, on demonstrating impact, and on making those tough decisions which senior managers will have to take. We have recently launched cutswatch.org.uk to provide a first port of call for sector leaders and I’d commend it to you.
So to conclude David, two key narratives from the new government will significantly impact on the sector, Big Society and spending cuts. Both present opportunities and challenges, but one still needs a good deal more explaining. We all have a big role in shaping the debate about what the big society means, but until you’re clear on how it will impact on your day to day role, my advice would be to focus on the spending review, think about income diversity, investigate collaboration and demonstrate your impact; because the challenge of spending cuts is a very real one.
I look forward to hearing the perspectives to colleagues here from government and look forward to the discussion.
Friday, 16 July 2010
· Demographic shifts redefining participation;
· Rapid advanced in technology;
· Networks enabling work to be organised in new ways;
· Rising interest in civil engagement and volunteering; and
· Blurring boundaries between the sectors.
The report outlines the ways in which organisations will need to respond and how we will need to develop the sector’s leadership to rise to these challenges.
For me the highlights are the quotes from sector leaders which explain what these changes will mean and present some real challenges to our thinking:
Tara Mohr, a coach from San Francisco said on the growth of inter-organisational networks:
“The organisation as an entity is becoming less and less important... We need to be looking at entrepreneurs, programs, organisations and networks of organisations, and thinking about how we organise our work and organise our impact across all four of those things, and less focused on the organisation as a central unit of how we get our work done.”
Shiree Teng, a consultant working with the sector argues that a radically different approach is needed for the models of leadership (not necessarily on-message for ACEVO!):
"It’s interesting to look at recent studies on nonprofit leadership deficits. That’s very conventional thinking — "replacement thinking." I think generational shift, along with trends related to diversity and technological advances, will change how we look at the leadership pipeline. Less replacement theory, more demand to revamp the executive director job so [it is] more doable. [We need to] increasingly look at the single leader model... and challenge that assumption of "leader." We need to move to more shared leadership for organizations."
Stephen Bauer, from American Humanics warned of the consequences of ignoring good HR:
"In our drive to put mission first, sometimes the staff are sacrificed. There are some funders out there that have taken the initiative in supporting effective HR functions and staff development, but if we don’t do more to take care of our own folk, we are going to lose them to other sectors."
David Eisner, former CEO of the Corporation for National and Community Service, champions the need for new partnerships:
"Organizations must become more facile around all sorts of dynamics, from 'co-opetition,' where an organization they are competing with they must also have to cooperate with, to understanding joint ventures, mergers, and acquisitions activities. The geographic world is changing dramatically. In the business landscape, there have been massive changes about how organizations are meeting supply; a lot of big nonprofits have not been able to restructure themselves to meet these new realities."
Peter Brinckerhoff, another consultant argued that funders have a key role in supporting organisations through these changes:
"As nonprofits, we can’t set money aside in a fund; you have to spend all the money according to the norms, which are "If we are not poor we are not holy." This gives us no cushion to thinking strategically. If nonprofits always budget just to break even, they can never grow and help more people."
As we focus on the immediate challenges we face around spending cuts and responding to the new government it is easy to forget the broader context and the longer term evolution of our environment. However we will ignore this at our peril.
Friday, 18 June 2010
I’m glad I’m not Tony Haywood. It’s not that that BP deserves any particular sympathy, but he’s clearly had a pretty rough few weeks. In the eyes of America’s media and politicians, desperate to trump one another in the outrage stakes to curry favour with November’s electorate, he cannot do anything right.
Appear contrite and apologetic and he’s not sincere, or he’s wasting time when he could be plugging the hole himself. Appear pro-active in fixing the problem and he’s not sorry enough. Appear British (which he finds hard not to) and it’s the fault of his whole country. Appear to worry more about his own life and family and everyone hates him.
Now Tony is pretty well paid for his trouble. According to Wikipedia he is paid an annual salary of £998,000 and in 2008 his bonus was £1,496,000. But his experience does proove that it’s lonely at the top. His Chair has avoided putting his head above the parrapet except to declare how much he cares for the small people. Tony has been in the firing line, and, to be fair to him, he has not shirked away from it.
Today is our future leaders summit and I am looking forward to chairing the afternoon session. The conference, aimed at our associate members who are looking to make the step up to the role of chief executive, will see a great line up of speakers sharing experience about how to bag that top job. It will also see the launch of our new publication, written by Cass Business School, on How to Become a Third Sector Chief Executive.
I suspect that most of the delegates are more interested in leading a charity than a multi-national oil company. But Tony’s experience should remind them all of one thing: once you’re the CEO there is no passing the buck. When something goes wrong it’s all your fault, even if it’s a genuine accident, even if you had all the right policies in place, even if your staff do something completely stupid.
It’s that kind of isolating responsibility which makes ACEVO’s networks so valuable. There is a point at which only other CEOs can provide you with the support you need, because only they can know what’s it’s really like.
And it is that responsibility which justifies the salaries which we pay to our CEOs. In the media circus surrounding executive pay, it’s easy to forget that it is responsibility, and not just the complexity of the role or the hours worked, which makes CEOs so valuable.
Everything comes on a scale, and not many ACEVO members have the capacity to destroy large swathes of the American coastline. But we do extremely complicated work with the most vulnerable people in the UK and around the world. The risks are enormous, and the responsibility sometimes overwhelming. Things have gone wrong in our sector and you can be sure they will again. So spare a thought for those who choose to isolate themselves with responsibility, and don’t complain when we pay them a little for their trouble.
Friday, 11 June 2010
The article cites a number of major campaigning organizations, including the Nature Conservancy, Conservation International and The Environmental Defense Fund, who have worked closely with BP to advise on extraction methods or help develop carbon trading schemes. Some have received donations from BP in return. Now, many of the groups’ supporters and other activists are protesting that those organizations are too close to the wicked BP and have sold-out.
The article reminds us that in the last twenty years the relationships between the corporate sector and nonprofits has changed beyond all recognition, and real partnership is the norm on both sides. ACEVO is currently working closely with the CBI on identifying what leadership skills are needed in both third and private sector in order to build effective service delivery partnerships. We are also running the Sustainable Business Forum, led by Oliver Rothschild, which is looking at the future of corporate-third sector relationships.
BP’s shattered reputation does raise some important questions about how our sector works with big corporates. There is no doubt that close partnerships make a real difference to the behaviour of organizations. McDonald’s relationship with a number of environmental groups is a case in point. An equal seat at the decision making table is always likely to bring about more change than waiving placards outside the board room. However, every nonprofit has, or should have, its limit; and sometimes things happen which we must oppose. So understanding the point at which we turn our back on partnerships and pick up our placards again is key.
Many organizations in the UK will be feeling a similar dilemma about our relationship with government. The partnership between the sector and government here is the most sophisticated in the world. However, the age of austerity and fears for our most vulnerable beneficiaries cause us all to ask at what point we have to turn away from partnership and protest. (Polly Toynbee wrote on this a couple of weeks ago.)
It is a tough call for third sector organizations as there is still huge potential opportunity in partnership with government. As ACEVO has been arguing since the start of the credit crunch, by focusing on prevention, devolving control towards service users and joining up silos, the third sector can bring about real reform in our public services – both saving money and delivering better outcomes. The question is whether or not government is brave enough and bold enough to lead that kind of reform. If not, salami slicing and the protection of vested public sector interests will leave many of our service users much worse off. When this happens we have a responsibility to cry out. We must not be afraid to do so when necessary.
Friday, 4 June 2010
Much more significant for third sector leaders is the decision of Grant Shapps the new housing minister to highlight the salaries of housing association chief executives, as reported in the Telegraph the following day. The fact that these organizations receive a significant amount of public money is key to the argument in the article.
The report claims that these figures have been “uncovered” by Mr Shapps, suggesting an air of cover-up. It doesn’t, of course, take much uncovering to look through the annual reports of housing associations which, like other charities, publish the salaries of the highest paid. But this language is important as Mr Shapps is clearly suggesting that any salary over than of the prime Minister is unacceptable, and the article goes on to say:
“The housing association salary packages are embarrassing as the executives run non-profit making bodies providing housing to some of Britain’s most disadvantaged citizens.”
The obvious question is how long will it be before salaries of other third sector chief executives are again making the headlines, and how will we respond when they do?
Salaries such as those reported in the Telegraph, even for those running housing associations, are very rare in our sector. (Journalists do like to turn the exception into the rule.) The ACEVO pay survey for 2009-10 shows a median salary of £57,264, and even for organizations with a turnover of more than £25m the median salary is 104,500 (significantly less than David Cameron).
But we know that there is a significant gulf between what the public think we do in the third sector and the reality of our work in the 21st Century. In the still-frenzied media world following the expenses scandals of last year, and the supposed “new politics” of the coalition government, there is a very real risk that the very modest salaries which most third sector CEOs are paid could be conflated yet again with the excesses of the city and alienate many of the public on whose support we depend. Many serious people believe that charity CEOs should do the job for free.
The National Housing Federation are right to point out in their response to the article that housing associations have been open and accountable about senior salaries for many years (unlike the civil service) and match every penny of public money with two pence of their own resources, thus providing excellent value to the tax payer. The same argument is true of other charities.
I am not going to try to make a detailed value-for-money case here. My point is simply that making such a case is the only way for the public to judge whether or not these salaries are acceptable. I have argued many times in this blog that as a sector we need to take charge of the narrative about what makes for a good charity. Measuring and judging inputs is pointless. Describing how our work makes a difference to the world and how we use recourses effectively to achieve that difference must be the priority.
We have nothing to hide about what we pay our chief executives, and nor have we been hiding it. But in this climate we need more than ever to champion how the sector’s leaders bring about change for the most vulnerable and needy in society and how they are worth every penny.
Tuesday, 11 May 2010
We’ve had it good for the last ten years. Government has wisely recognised the need to invest in the sector’s capacity in a number of key areas including financial management, governance, workforce development and IT infrastructure, as well as providing greater access to capital. This investment has been a great success story for the sector and many organisations have transformed in the way in which they can meet the needs of their beneficiaries. For some of these interventions, such as Futurebuilders, the evidence of impact is clear. For others, such as the regional infrastructure consortia, the evidence is more sketchy.
However successful the last ten years have been, the job is not done and the sector still needs support in building its capacity. We also know that government spending will be radically curtailed. It is inconceivable that the sector can expect ten more years of the kind of support we have received. Therefore in order to make the case for continued investment we must propose a new model of smarter capacity building that meets the sector’s needs in a more efficient and effective way.
Looking back on the way in which some of these services were delivered it is fair to say that there are lessons to learn. The desire from many to equate the sector’s with capacity building has led to the duplication of services at national, regional and local levels. Similarly the principle that the sector should deliver its own capacity building has led to some confusing commissioning arrangements where conflicts of interest have had to be carefully managed. Much of the time the standard answer to addressing a particular capacity deficiency has been to set up an organisation, or a quasi-organisation like the Hubs, to deliver services to solve the problem. This kind of supply-led intervention has meant that services are often not flexible enough and run the risk of speaking to the lowest common denominator.
Now we find ourselves at something of a watershed. The state of public finances present us with huge challenges as well as significant opportunities in our role of transforming public services. Significant changes to market structures such as the lead provider model and personalisation mean that organisations have to change their business models and compete with other sectors. And all this time demand for our services continues to rise.
So what might smarter capacity building to meet these challenges look like? Social investment will be at the cornerstone of much of the sector’s development and the growth of this market, with the creation of the Social Investment Bank, is as essential as it is sustainable. However, other more traditional forms of capacity building will also the required. In a speech last September Stephen Bubb, ACEVO’s chief executive, outlined three principles which should guide our thinking in how this should evolve.
Firstly we need to be clear about the difference between capacity building and advocacy for the sector. Both functions are critical, but may operate best at different scales. It makes sense to lobby local, regional and national government over relevant issues at the same time, but it makes less sense to invest in the development of support services to improve third sector governance at multiple scales. What matters is that organisations of all sizes can access the services they need. National expertise in developing generic sector wide support, like ACEVO’s Full Cost Recovery model, may be the most effective way of building basic capacity.
Secondly statutory funded capacity building needs to become more demand led rather than supply dominated. In some cases the organisations, or quasi-organisations which have been set up have spend a great deal of their time trying to find the organisations whose capacity they can build. That’s not a very efficient system.
Since Stephen made his speech ACEVO has begun to offer third sector leaders individual budgets, funded through our Income Generation and In Better Health programmes, allowing those leaders to identify the support they need and then procure it in a way which works for them. Just as with personalisation in health and social care, this model requires an active market of providers of capacity building services, “guides” to help identify need and connect people with the services which the market provides, and resource to allow users to access those services.
Later this year we will begin a research project with leaders of infrastructure organisations to develop a model for how such a demand led market of capacity building could work at a local level, including the roles which local authorities and other statutory agencies should play.
There are other ways of changing the way in which capacity building is resourced, including incentivising lead providers in supply chains to build the capacity of other providers (such as will be promoted through the Merlin standard used by DWP in welfare to work services), and to better develop the building of the sector’s capacity and especially its leadership as a CSR activity. As you might expect ACEVO is leading the debate on these issues too.
Thirdly, we need to gather better evidence about the impact of capacity building and the difference we make. Gathering evidence on this is notoriously difficult but critical if we are to be able to coherently make a case for continued investment.
It is vital that the sector takes the lead on this debate itself and presents the new government with a realistic, constructive and effective model for how investment should be developed. We must use our resources wisely to maximum impact so that the sector is better placed to meet the needs of our beneficiaries.
Wednesday, 5 May 2010
Thursday, 22 April 2010
I’ve written before about the lack of awareness of the role and scope of the nonprofit sector at all levels of government in the US.
Amazingly now, given the severe fiscal challenges of State governments, the sector is being attacked on new fronts. State and municipal administrations are even seeking to impose additional fees and taxes on nonprofits to boost revenue, in spite of these being the very same organisations that are already massively subsidising the delivery of essential services.
A report by the National Council of Nonprofit Associations shows these trends starkly. Tim Delaney, their CEO, described to me the scale of the problem. The vast majority of the sector’s interaction with government takes place at the State level of below, yet 48 of the 50 states are in serious financial difficulty. In Arizona they have sold the state building and the government is leasing it back just to bring in some short term cash. This fiscal crisis is leading on to three broad trends which are hurting nonprofits and those who use their services.
Firstly, many programmes are being slashed or simply stopped all together, and these include the programmes which are providing essential support to those most affected by the recession.
Secondly, government is getting worse and worse at contracting with the sector, with agreements signed sometimes a year after work began. In New York over 75% of contracts with the sector are signed late. California owes the sector more than $2bn and was paying some organisations with IOUs at the end of the last budget cycle.
Thirdly, and most shockingly, governments are seeking ways to bypass tax exemptions and create new taxes and fees for nonprofits to pay. Examples include taxes in Minnesota on streetlamps outside your office, taxes on sick-bed occupancy in Cleveland, and taxes on any students you may be teaching in Pittsburgh. Remember that it is almost unheard of for a nonprofit to recover the full cost of service delivery from the government here in the US (hence there is so much interest in our work on full cost recovery). Nonprofits are already massively subsidising the delivery of essential services, and yet their tax exempt status has made them a prime target for additional fees.
Tim believes the worst may yet be to come. He argues that because of the lag time in the recovery (first the market has to recover, then business have to recovery, then government has to refill its coffers and finally the sector will be funded again) it may take until the end of the decade for things to get back to how they were before the crisis.
There is huge synergy between the work of NCNA and ACEVO and I am really excited about building the partnership – we have a lot to share. The situation here is completely unsustainable and NCNA are working on their own version of the “Big Offer” to break the cycle, presenting to government the reasons why they need the sector now more than ever to fix the expensive social problems. But they have a tough job ahead as much of the architecture that we take for granted in the UK (such as the Office of the Third Sector, the Compact, Capacitybuilders and the Social Investment Business) simply does not exist here. Tim’s first job is to get a seat at the table, and for his members to have seats at the tables of government in each State. It’s a humbling reminder of how far we have come in the UK over the last decade.
Tuesday, 20 April 2010
The Nonprofit Finance Fund’s state of the sector survey was published in March. Over 1,300 nonprofits across the US responded. The headlines show that:
- Only 18% expect to operate above break-even in 2010
- 80% expect more demand for their services in the same period
- 89% expect 2010 to be as difficult of more difficult than 2009.
In terms of income predictions, 59% expect income from government to fall. However predictions for individual giving and earned income are more optimistic with a majority saying that both will increase or stay the same.
61% have less than three months cash available but the fund also reports that nonprofits are strengthening their financial management and 52% have collaborated on the delivery of a programme with another nonprofit.
Looking particularly at those organisations which describe themselves as “lifeline” organisations, offering critical services to people in need, 56% expect to find 2010 harder than 2009 for their organisations and 64% don’t think they will be able to keep up with demand.
In spite of this picture, nonprofit leaders remain optimistic. The Fund reports how leaders have redesigned the delivery of services to create efficiencies and actively planned for future scenarios.
A very similar pattern emerged from the 2009 ACEVO pay survey (Press release here). Leaders showed that although they were finding the environment tough, and they expected worse to come, they remained optimistic about the long term future, and remained passionate about their jobs, with 90% saying they were happy in their role and 96% saying they would recommend working in the sector to others. The survey is now being sent to all ACEVO members and their chairs to complete for 2010.
Monday, 19 April 2010
The similarities in governance structures between the sector in the US and the UK are striking.
On Friday afternoon I had a great meeting with Bill Ryan, research fellow at the Kennedy School of Government at Harvard. He is a leading thinker on board effectiveness and runs an online programme for chief executives supporting them to develop the performance of their boards. We discussed how this programme could be made available to chief executives in the UK.
Bill described how the narrative around nonprofit governance over the last decade in the US has focused increasingly on the control and audit aspects of boards, with the sector seeming to want to fit into an agenda of post-Enron corporate governance structural reform. Nonprofits adopted the onerous Sarbanes-Oxley regulation even though it did not automatically apply to them. Committees, audit trails and regulation proliferated, and yet governance did not necessarily improve.
Bill cited the example of the Smithsonian in Washington, an organisation which could not have had better governing structures on paper if it tried. It’s chair is the chief justice of the US supreme court. However scandal broke in 2007 where amongst other things the Chief Executive’s remuneration got out of hand (even by ACEVO standards!). The issue according to Bill was that the board had neglected the behavioural aspects of governance, the way in which people on the board actually related to each other and made decisions, and focused instead on structures.
This is pretty common. It is after all a good deal easier to talk about structures than it is to talk about behaviours. And it’s an important lesson as we work on revising the code of good governance in the UK. The right structures, with all the text-book checks and balances, are necessary for good governance but not sufficient. People need to behave in the right way, relationships must be cultivated and nurtured. Egos must be kept in check. This is of course equally true on both sides of the Atlantic and is why it is so important that tools like ACEVO’s governance review service look at both structures and behaviours.
The comparison between the UK and US structures therefore is very helpful. More diverse are the systems of governance across Europe. With partners across the continent Euclid Network is leading on the creation of a set of Europe-wide governance principles. In Paris last December representatives from across the UK and France began work in defining principles common to the two countries, and in spite of varying structures being described, those common principles of accountability, of collective responsibility, and of board leadership shone through. In the summer this will be expanded to Scandinavia with an event in Oslo.
ACEVO passionately believes in the importance of providing an international perspective to third sector leadership, and it is clear that in observing how topics such as governance develop around the world we can all learn from each other. Long may that continue.