So we're off

So we’re off: the election has been called. Critical for the country as a whole this election is critical for the sector too. What is at stake and what change do we need?

Fortunately ACEVO and our partners at the Community Alliance and Social Enterprise Coalition have already answered those questions. Our joint manifesto outlines the four things which the next government needs to get right in order for our sector to play its potential role in transforming public services, cutting the debt, and empowering citizens and communities.

1 Smart investment in an age of austerity

• Use a variety of funding vehicles when working with third sector organisations which are best suited to the desired outcome, including contracts, grants and loans.
• Support the capitalisation of the third sector by continuing to develop social investment, the creation of the Social Investment Wholesale bank and stimulating new forms of social finance such as social impact bonds.
• Attract private investment into the sector through adapting investment tax incentives to give a higher return for those organisations delivering social or environmental benefit.
• Transfer more assets into community ownership and invest in the communities which will manage those assets.
• Deliver better banking by reforming financial regulations so that banks can more easily deliver for all the communities they need to serve.

2 Improved public service markets and the democratisation of commissioning

• Create an environment where commissioners are able to take risks and dare to try something new.
• Ensure a level playing field, transparency and openness in all public procurement, with simplified and proportionate processes.
• Value co-design in the commissioning of services.
• Respect the terms of the Compact.
• Supporting the development of social enterprise models across public sector agencies
• Commission services on a scale which makes sense to service users and allows third sector organisations to play to their strengths.
• In tendering processes support and facilitate collaborations between local partners, between large and small, and between national and local organisations and those with different business models.
• Value social and environmental outcomes in commissioning processes.
• Support and incentivise capacity building through procurement.
• Develop skills of commissioners and providers, and create the space for strategic conversations.
• Ensure services are personalised and joined-up.

3 A supportive architecture

• Sustain a department and minister with sole responsibility for the third sector at the heart of government.
• Performance manage government departments on their involvement and engagement with the third sector in all areas of policy development.
• Reform benefits to remove disincentives to volunteering and allow part time paid work in community groups and social enterprises.
• Reform regulation affecting the third sector to encourage more community action and volunteering.
• Allow more flexible governance arrangements in the sector.
• Continue to invest in building the sector’s capacity, in particular in leadership and governance, with a smarter more demand led approach.
• Create a tax system which promotes social entrepreneurialism and philanthropy while maximising returns to the sector.

4 An environmentally sustainable relationship

• Deliver the recommendations of the third sector ministerial taskforce.
• Embed green outcomes in public procurement.
• Place the third sector at the heart of a green economy.
• Support all organisations to deliver a triple bottom line.
• Support third sector leaders to respond and adapt to the future of public services.
  
  

Closing hospitals should be our goal

I watched the Chancellors’ debate with interest last night. All three missed opportunities for killer blows – I guess everyone was nervous.

My favourite question was from an A&E doctor who asked which of the three could guarantee the maintenance of front-line services in his department. Cue lots of assurances from both the Tories and Labour about protecting the NHS at all costs.

However they all missed the opportunity to provide a much more progressive answer to that question. That is: of course we want to protect front-line hospital services for those who need them, but the real opportunity in health care reform must be to keep as many people out of acute care as possible and seek opportunities through a greater use of the third sector to further improve primary and community care. Services should be re-designed and re-prioritised so that fewer and fewer people end up in A&E, resulting in better more tailored services particularly for those with long term conditions, allowing people to stay in their homes, and delivering savings to the stretched public purse.

Consider the opportunities. Someone with diabetes can quite easily end up in A&E if they have not been able to administer their own medication. However support from a third sector organisation at a modest cost could prevent that admission and save the huge costs associated, as well as avoid the suffering for that individual.

Our recent manifesto published with sector partners showed the example of Age Concern South Staffordshire who run a support service for elderly people who have been discharged from hospital, supporting them in those first few vulnerable days. An investment of £0.5 million has saved over 8,000 hospital bed days at a cost of almost £2.5 million.

There are countless other examples but this debate is something of a taboo with the general public and particular with the press. The “reconfiguring” or closing on acute services is always met with great resistance from local campaigners, even when the money saved will be used on better primary care or where those hospitals have been deemed unsafe.

As third sector leaders it is time for us to lead on this debate. We must be bold and advocate for a better balance between acute and primary and community care, with a significantly bigger role for the third sector. This can dramatically improve outcomes for patients, but is can also save huge amounts of public money at the time when those savings are most needed.

This means some hospitals closing. We should celebrate this as a success for the third sector and those we exist to support. After all, no one actually wants to be in a hospital if they don't have to be. We have the potential to harness the voices of our service users to help lead the debate about how we reform health services. Image the power of thousands of diabetes suffers hailing the closure of a hospital because they are receiving better primary care. It would certainly be harder to resist than NHS managers talking about efficiencies.

This potential for reform is why our victory over Burnham’s disastrous preferred provider policy is so important. The third sector has so much to bring and we must be allowed the opportunity to do so. Rest assured there are other significant vested interests who will continue to fight against such reform but it’s time for the sector to champion this change. Service users know what they want and third sector leaders are ideally placed to help to convey that message.

Can Business Save The World?

This week I am finally back in the office after the nastiest bout of flu I have had in years.

One advantage of having all that time was it allowed me to catch up on my reading. I have just finished Michael Edwards new book Small Change, Why Business Won’t Save the World. Edwards has had a prestigious career in the sector and was for many years a director of the Ford Foundation in New York.

As in his previous works, Edwards’ argument focuses on deconstructing what he calls “Philanthrocapitalism”, the trend in the non profit sector towards market forces and business discipline being harnessed to expediate greater social change. Grouping together a slightly amorphous group including social entrepreneurs, venture philanthropists, and social investors he picks apart the philanthrocapitalist ideology for its lack of evidence, its arrogance and crucially that it may undermine the more traditional non profit role of stimulating social change.

Edwards does not believe that more effective use of the market can be a means to solve many complex social problems because often it is the market which has caused those problems. Real social change can only come about from the grass roots advocacy role within civil society stimulated by a desire for social justice rather than income generation.

Citing Albert Cho, an academic who studies this field worldwide, he draws the distinction between “ the social entrepreneur asking, ‘how can I mobilize recourses to solve this issue,’ rather than, ‘why does this issue exist?’” Edwards challenges us: “Do we want to address the symptoms of social inequity, or do we want genuine social transformation?”

This is a fascinating challenge to our sector where the wind is most definitely in the sales of the social entrepreneurs and investors. I think Edwards is right to highlight the limitations of philanthrocapitalism, and the fact that the distinction between social enterprise and the more traditional non profit sector is often over stated, particularly by social entrepreneurs themselves. (I wrote a blog on this topic a few weeks ago.) As Edwards reports public charities in the states already receive over 70% of their income from the sale of goods or services. The danger for social enterprise is that as presenting itself as the panacea it can only disappoint. An interesting sub-text for Edwards is the fact that new philanthrocapitalists are often better at presenting themselves and explaining the changes they are trying to bring about than parts of the traditional sector, perhaps because of a corporate training in communications. But that doesn’t necessarily mean that they are better at bringing about real social change or have any firmer evidence for those changes.

For me though this challenge is slightly overstated. It would of course be a tragedy if what Edwards calls citizen philanthropy was lost at the expense of purely market based solutions to tacking social justice; but that isn’t really on the cards. Instead the two can and should exist side by side. Both have faults and both have merits. Some social problems can be tackled by using the market, others can’t. It is incumbent on us in the sector to try to fully understand the causes of those problems so we can develop the right solutions. As Edwards himself highlights “Its not that our old ideas about social transformation were perfect; it’s that our new ideas are imperfect, too, and almost certainly won’t turn out as planned”.

Also in the book there is a particularly good analysis of the difficulties of comparing different organisations and the perils of trying to develop simple tools to measure comparative performance, and a healthy challenge to both philanthrocapitalists and the foundation community to improve accountability. I’d recommend it to anyone interested in where the sector is headed.

When Charity and Politics Collide

Christine Pratt thrust herself into the limelight on Sunday afternoon and in the process all but destroyed her charity, brought the confidentiality of help lines into question and raised questions about the role of charities in political debate.

Whatever one makes of her motivation to speak out, I think that there are a couple of interesting lessons for third sector leaders.

ACEVO has for many years campaigned for greater clarity and more flexibility in the rules about charity involvement in public policy. The sector’s campaigning role has come into question again in recent weeks as a result Oliver Letwin’s recent comments at the NCVO campaigning conference and extra guidance issued by the Charity Commission ahead of the general election. I hope that sector leaders are not any more reluctant to become involved in the political process as a result of the backlash against Pratt. They shouldn’t because Pratt did a great deal wrong.

The website of the National Bullying Helpline contains quotes of endorsement from David Cameron and other prominent Tories. Her board was comprised of other local Tory activists and the office was two doors away from the local branch of the Conservative party. I don’t for a second believe that her actions were part of a coordinated Tory plot, but for anyone like me who spent two minutes on Monday morning checking out the NBH website alarm bells were ringing.

A huge number of charities involve politicians in trying to promote their work and help to influence the development of policy. This is absolutely appropriate. But that involvement must not be partisan, and in this world appearance is as important as reality. It was very foolish for the charity not to seek and demonstrate cross party support for its work (it’s hardly a controversial topic after all). Whether or not the charity had inappropriate party political links its reputation and credibility are now destroyed.

The second lesson concerns her decision to put political activity ahead of the confidentiality and interests of her clients. The organisation’s objectives as displayed on the charity commission website are “the preservation and protection of good health of those affected by bulling in the workplace and other environments.”

Political campaigning is only allowed and indeed only appropriate when it helps to further the objectives of the charity and is in the interests of its beneficiaries. In her case Pratt has directly sacrificed the interests of her beneficiaries to give herself a platform. That is the cardinal sin of a third sector leader. I wrote a few weeks ago about how our first principle must always be the interests of our beneficiaries.

Sector leaders shouldn’t be afraid to become involved in political debate. They just need to avoid the mistakes of appearing partisan and ignoring their beneficiaries. Neither should be hard.

The Optimistic Ask

In Norwich today on the fifth leg of our Big Ask tour. We are going round the country asking members their views on what support they would like from ACEVO both in terms of our lobbying of the next government and the services we provide to chief executives. Turnout at these meeting has been great and members, as always, have been full of constructive and practical ideas about how we tackle the challenges ahead.

One particularly striking thing at each of these meetings has been the proportion of members who say that they are optimistic about the future versus those who say that they are pessimistic. Almost everyone has said that they are optimistic about the future for our sector in spite of the tough times we know we have ahead.

This mood strikes me as being in sharp contrast to much of the rhetoric in the sector at the moment, but is I think entirely appropriate. As a sector we do have the potential to provide the solutions to many of the problems which the country is facing. We can deliver better more personalised and more cost effective service which help to bring and hold communities together. We can provide a voice for the disempowered and support people to contribute to the maximum of their potential. The question is whether we can articulate our offer in a way which makes us “irresistible” to government, and makes them sit up and take note.

It’s all to do with how we position our sector, and we as umbrella bodies have a key role in that. We must avoid presenting ourselves as yet another victim of the recession needing to be propped up by handouts. We must position ourselves as providing the answers to the problems which the country faces and demonstrate the value we bring to justify the necessary investment. We must provide commissioners with solutions to help them to make the brave choices they need to make in order to redesign the way services are delivered.

Some of this is of course about us getting better at collecting and presenting evidence of the impact which we make. But a great deal of it is about attitude. The biggest thrill in my job is working with chief executives who are committed to delivering solutions not problems and I am proud to play my part in representing them.

"Are you a charity or a social enterprise?"

“Are you a charity or a social enterprise?” This question was asked by a consultant to an ACEVO member at a meeting this morning. I think our member was a little surprised and wasn’t quite sure how to answer.

I feel his pain. Social enterprise as a distinct concept has rocketed up the consciousness of policy makers in recent years and many (including Francis Maude at the SOLACE annual dinner last week) refer obliquely to “the third sector and social enterprise”. How useful is this distinction in terms of promoting the role of the broader non profit sector?

There is no clear definition of social enterprise as a noun. There are of course some specific legal forms which social enterprises can take (CICs for example) but to restrict the social enterprise movement to only those organisations would exclude many which are trading for a social purpose.

A better question to our member might have been “do you do charity or social enterprise?”. The term makes more sense as a verb. Trading is a vital part of the funding mix for many organisations in the sector. According to the NCVO almanac earned income was responsible for 51.2% of the sector’s total income in 2006-7. ACEVO’s income generation team supports organisations in diversifying their income streams and the development of trading is key.

But as a verb social enterprise is nothing new. Charities have been trading for centuries and earned income has been a major source of income for particularly smaller organisations.

So if it is not a noun, and as an activity it is nothing new, what is the relevance of the distinction? I suspect in asking the question our consultant friend was trying to gauge the mindset of the organisation in question. Social enterprise can be associated with being professional and innovative, operating in complex markets and delivering products and services which compete with providers from any sector. This is distinct therefore from traditional charity based on voluntary principles, donations and non marketable interventions.

This is an interesting distinction but many organisations which would never think of themselves as social enterprises would tick all the boxes of being professional, innovative and delivering market based products or services. These qualities are not unique to social enterprises.

This matters because many of the challenges which the sector faces are common to those organisations which class themselves as social enterprises and those which don’t. The quality of the interventions which we can bring are equally high.

There is a spectrum on which third sector organisations sit – some which do a lot of trading may have more social-enterprise-like characteristics - but it is not a polarity. Categorising social enterprise as something other than the rest of the third sector is unhelpful because with common challenges to meet we are best placed meeting them with a shared voice.

First Principles

Frances Crook, the Chief Executive of the Howard League for Penal Reform, has written in her most recent blog about her and Kevin Curley’s meeting with the Charity Commission on the issue of charities being involved in the running of prisons.

Kevin has made his views on the issue very clear. He set up the “charities must not run prisons group” on facebook (which now has 157 members; including Andy Benson from NCIA) and tweeted on the issue frequently last August (@kevincurley).

I profoundly disagree with these objections which fundamentally boil down to the running of prisons not being the sort of thing which Frances and Kevin feel charities should do. Frances talks of it being “immoral” and cites situations where charities may have to be involved in making difficult decisions about punishment regimes.

Others have responded to these points well (including my colleague Peter Kyle on Crook’s blog last August). Charities have to make difficult decisions every day about the best ways to help their beneficiaries, sometimes compromising short term comfort for long term outcomes. We live in the real world and the best organisations understand how to operate within that real world to bring out the best long term results.

These divergent views are one illustration of a fundamental schism in the sector which is becoming increasingly apparent to me. On a number of issues, such as whether we should pay trustees, whether we should deliver more public services, and how we should present ourselves to the public, there is a polarity between those who approach from the point of view of what charities should look and feel like, including the experience of those who work and volunteer within those organisations, and those who approach from the point of view of what will generate the best outcomes for beneficiaries.

Now I understand that this is a crude distinction. These things are often related and that they are both important. However, I do think this is a helpful distinction because it forces us to refine our first principles when making judgements about how our sector should develop.

Taking a few of those salient issues, my approach to addressing them starts with the question "what’s the best thing for the beneficiaries?" I believe that charities should be able to pay trustees if they want to in order to get the best people on their board to make the best decisions to drive the best outcomes. I believe that charities should get involved in bidding for government contracts if it allows them to better meet the needs of those they were set up to serve. I believe that charities should be able to have a role in running prisons if they will be able to better rehabilitate offenders as a result.

The counter arguments sound to me like they prioritise norms about the sectors character. Charities should not be allowed to pay trustees because our heritage is voluntary and that we should be distinct from the private sector. Charities should be wary of becoming involved in public service delivery because it may jeopardise our independence. Charities should not be involved in running prisons because it might mean that they have to make difficult and unpalatable choices.

So what is more important: what the sector looks like or how well we deliver for those who need us? What are your first principles?