Grimsdale's Ire: 20/10/08

Many in Ireland are wary of economic costs of absorbing Ulster 17/10/08
Henry McDonald on political deadlock in Northern Ireland not being resolved and how Dublin and Westminsters’ focus on the financial crisis is leading to political stalemate. [Guardian]

What's the point of regional ministers?
“It's not my question, but it's a good one. Andrew MacKinlay asked it in the House of Commons this afternoon. According to the Press Association report, this is how he put it:

‘I don't want to be unhelpful or unkind, but will you tell us what the regional ministers do … There is no scrutiny. I genuinely don't know precisely what they are supposed to do, and bearing in mind now we are told that there are some assistant regional ministers as well, those of us who are in the minority of never having been invited to do anything are beginning to wonder what we have done wrong.’” [Guardian]

Don't forget the third sector
Stephen Bubb on the need to continue development of the Third Sector through sheltering it from some of the more damaging effects of the economic downturn. [Guardian]

David Cameron proposes national insurance cut for small businesses 20/10/08
"David Cameron today called for very small businesses to be given a temporary tax cut of 1p on national insurance contributions to help them deal with the economic downturn.

In an interview on the Today programme on BBC Radio 4, the Conservative leader said that a tax cut of this kind — costing the Treasury £225m — could offer immediate help to small firms struggling to pay their bills." [Guardian]

Home Office trying to persuade unions to drop opposition to ID cards 20/10/08
"The Home Office is in active talks with trade unions in an attempt to persuade them to abandon opposition to the imminent introduction of compulsory ID cards for airport workers.

Meg Hillier, the minister in charge of ID cards and passports, today promised there would be no delays to the £4.7bn programme despite the threat of a UK economic recession." [Guardian]

Digital TV switchover will hit rural viewers 20/10/08
"The culture secretary, Andy Burnham, has been accused of neglecting 2.5 million households in rural areas after it emerged they would get less than half the number of TV channels broadcast to the rest of Britain after the switch to digital services.

Opposition MPs believe the government is discriminating against rural communities because ministers have refused to make sure that all the broadcasters using the digital service Freeview offer a full service for every home, once the analogue television signal is finally switched off in 2012." [Guardian]

Click here to read more information on Mr Grimsdale, King Heron and Mobius

Knowledge Share: Maximising Information

Confidence has been growing in the third sector as its contribution to public policy has been increasingly recognised. Voluntary organisations are increasingly being recognised for their work in serving their local communities. Decision makers are increasingly being convinced by the third sector’s advocates of the need for ongoing public reform. However, there is still room for improvement. We have been underutilising the levels of knowledge of the sector. To fully develop the potential of the sector we need to ensure that every key fact and third sector success story is shared with relevant organisations and sections of the community. Currently the Economic and Social Research Council (ESRC) is undertaking a consultation on how academia can improve its analysis of the third sector, as it seeks to make its level of understanding match the public and private sectors. We should now take this opportunity to open the gates of understanding, welcome public analysis and adapt to develop models of co-dependent learning and education.

Recognising The Third Sectors Strengths And Weaknesses
The third sector suffers whenever information is underused because of silo mentalities and short-termist expediencies. Failed opportunities to learn about the sector and have up-to-date information on key areas often result in too many third sector organisations whispering their successes when we should be shouting their progress. When knowledge share does occur it allows us to present ourselves as unified. It enables us to strategise more effectively. It reduces wasteful searching for material. Duplication of efforts should also decline.

The third sector is often very successful at researching. Through specialist third sector material being uploaded on organisations’ websites and increasingly blogs and other web 2.0 based communications third sector organisations have been able to make the case for volunteerism, philanthropy and civic engagement. This is very useful, as it gives individual organisations the chance to explain developments in the third sector, areas of best practice and issues that prevent organisations from being able to fulfil their goals.

However, considerable amounts of information get lost. Often the strains placed on people researching and writing pieces combined with other onerous tasks can result in the acquired knowledge being underexposed. For instance, articles may not be uploaded onto the Internet after having been forwarded onto publication editors. Reports may be delayed and only done in infrequent batches. Other organisations with a mutual interest in the results may not be even informed at all.

Refocusing Knowledge
The ESRC is developing a strategy for its engagement with the third sector to ensure that the academic community is able to fully comprehend our goals and create opportunities for knowledge exchange. This is a great opportunity to highlight the strengths of the sector and make sure that the third sector is as well understood as the public and private sectors. Hopefully we will be able to have a clear overview of how society wide changes in governance are providing the third sector with unique roles for civil renewal.

However, given the gaps in knowledge that some areas of academia have previously had of the third sector it is important to strongly guide the direction of research in some areas of academic enquiry. Through explaining the difficulties that we face we will be able to add authority to ongoing issues such as the need for a stronger and more enforceable Compact, the importance of service provision being based on outcome measurement systems and the benefits of continuing state and public sector reform. Hopefully knowledge clusters will develop, as well as around sector specific research. If this happens then shared opinion will be able to fully represent the beneficial utility of the third sector to public services and communities.

Through participating with ESRC’s research and articulating our needs and desires we should be able to examine and then transform how academics and organisations plan and release information. We must also make efforts to highlight and encourage organisations which provide joined up research. For example, Intelligent Giving’s blog usefully signposts reports and events in its commentary, allowing time conscious third sector employees and curious parties links to more information should they require further insight on topics. Looking at the long-term picture the potential of the Internet to coordinate the third sector’s communication makes it necessary to examine ways of improving the sector’s existing knowledge champions and perhaps even coordinating new third party research hubs.

The third sector’s diversity provides an oasis of innovative ideas that can make it difficult to get a comprehensive overview of its strengths and weaknesses without taking the time to search around. However, if we matched the new commitment from the academic community to increasing levels of research of the third sector’s processes and the positive outcomes of our efforts with a new attitude to sharing our knowledge then we should be able to accelerate the development of a more professional, confident and effective sector.

This article was written on behalf of Peter Kyle, Director of Strategy and Enterprise for ACEVO in July 2008

Bread and…Roses too: The Quest for Better Labour Relations

The dramatic rise in influence of the third sector since the 1990s has aroused a feeling of suspicion in some sections of society. Organisations such as acevo have been accused of being the ‘weapon of choice’ in undermining the welfare state, sometimes of herding the sector towards a point where we risk losing our independence in order to sit at the parents’ table of public service provision. These most ardent naysayers are misplaced in their fears.

One of the most interesting things about the third sector is its diversity. It is difficult to define what a ‘normal’ third sector organisation is, just as its equally difficult for politicians to articulate what Britishness is. This can exaggerate some trade unions’ anxieties. However, these differences make the third sector so invaluable (and it is what makes Britain so exciting). The third sector is neither lapdog nor Trojan horse. Third sector service provision will not tear down the welfare state and throw people into soup kitchens. Equally, we aren’t prepared to kowtow to funders if it harms the communities that we assist. The benefit of third sector organisations is that their individual goals are usually narrow, allowing them to accept working with all necessary organisations, cutting through the thick jungle of partisan baggage that often undermines public service improvements.

Welcome To The Jungle: The Quest Begins

Recently acevo launched a report on the relations between trade unions and the third sector. Our jungle guide, Nita Clarke provided us with a path that she had uncovered as a result of her time hunting with neighbouring tribes (Nita was a longtime official before going to work in No 10 for Tony Blair on Government and union relations. She now runs the IPA (The Involvement and Participation Association)). In our quest to uncover the lost city of Better Labour Relations, famous for its healthy and flourishing civil society we formed a League. Reacting, the bravest warriors in the land assembled at No. 11 Downing Street, where I was joined by famed leaders, including Phil Hope, Minister for the Third Sector; Tom Watson, Parliamentary Under Secretary of State; Keith Sonnet, Deputy General Secretary of Unison; Clare Tickell, Chief Executive of NCH; Nita Clarke; as well as numerous foot-soldiers of society.

Nita Clarke’s report, The Way Ahead highlighted how past actions and future fears had allowed the tribes of Unionism and The Third Sector to foster misgivings. Mistrust and lack of unity has allowed the roads to Better Labour Relations to become blocked by the enveloping thickets of conflict or pillaged by private interests. Many union elders witnessed firsthand the shift in public services to private and third sector providers and developed animosity towards our tribe. Some go as far as to suggest that third sector groups are a tool for undermining the welfare state or that we are unqualified to provide more than niche or specialist services. As I argued earlier, these fears are misplaced, although as Nina’s work highlights that there is significant scope for improving employment practices in the sector.

Equally, there have been concerns from the Third Sector Tribe that past skirmishes from Unionism to stem the transference of public services to our sector has made some of our chieftains wary of improving links for fears that it could militarise internal criticism, affecting their organisational cohesiveness. Many groups feel that the unions provide an outdated ‘offer’ and do not do enough to address the specific characteristics of the third sector or its staff.

The Way Ahead helped to rally the troops at No.11. Nita’s insights highlighted how past concerns can be overcome and how our differing skills but progressive values can make both the third sector and unions far more effective at serving communities. We were reminded how the third sector should be seen as a better alternative to the private sector during our journey. We were taught how trade unions could summon pools of knowledge on industrial relations to protect small and medium sized organisations from negative spirits that seek to undermine our goals. We are now confident that more can be achieved through joint lobbying and open communications. The occasion reminded me of ancient wars, where union standard bearers advanced under the proclamation “We want Bread… and Roses too.” I believe that this theme unites the people of Unionism and The Third Sector in our quest.

Fired with this spirit we march, aware of our need for a joined up strategy for improving HR and ER as a matter of priority. Common agendas will emerge as we identify issues of mutual concern, develop better union/third sector protocols and dispute resolution procedures and achieve more goals through combined campaigns. The trail towards our destination is long but we are now more aware of what needs to be done to reach the city of Better Labour Relations.

This article was written on behalf of Stephen Bubb, CEO of ACEVO in July 2008

Weathering The Storm – How Will The Third Sector Cope During Economic Downturn?

The succession of negative stories in the press about higher inflation, concerns over the housing market, and the possibility of the UK entering a recession has dented public, private and governmental confidence in the near future. Chief executives are rightly asking how might this affect their own third sector organisations. Here we explore the possible implications of the economic downturn on three major funding sources and what the sector can do to mitigate against those risks.

Less resilient and innovative organisations will find it more difficult to withstand the economic downturn. For the third sector to minimise organisational losses a professional approach will be key. Innovative approaches recognise that incomes may decline but that it is still possible to retain and unearth untapped revenue making opportunities. To improve long-term viability it is necessary that third sector organisations understand the environment in which their funders are operating and map the likely effects on any economic changes, so that revenue making strategies can be recalibrated to maximise opportunities and weather the expected economic storm. This should enable third sector organisations to remain intact and flourish when more optimistic periods return.

Public Service Funding

The Government’s concerns over future economic growth and long-term investment decisions may have implications for organisation who rely heavily on government funding.

During economic slowdowns or recessions an increasing proportion of taxation gets apportioned to social services, as money has to be spent on people with reduced incomes rather than investment projects. This may favour third sector organisations working with certain Government departments such as the DWP, funding organisations to retrain and find employment for the long-term unemployed. However, this is likely to be at the expense of other third sector areas, as funding gets directed towards relieving increasing levels of poverty.

In addition to economic changes shifting government spending, a significant proportion of the Government’s investment programme is being attributed to recent grands projets such as the Olympics, Crossrail, ID cards, nuclear power stations and Trident. In such a climate many third sector organisations not in the focus of more pressing government strategy will struggle during the fight for fewer contracts.

The continued efforts to develop more sophisticated relationships with government funders and commissioners, and the continuing professionalism of the sector may help to overcome these risks. Communicating the added value that we can provide through running public services will be key. Investment projects will become increasingly scrutinised by commissioners keen to keep an eye on the bottom line, to emphasise value for money to taxpayers but three year contracts; emphasising the positive outcomes of third sector projects; and highlighting effective accountability when should enable third sector organisations to increase competitiveness relative to rival providers.

Private Organisation Funding

Private companies have differing reasons for donating money to the third sector, whether based on CSR values, the need to publicly demonstrate giving, or the accounting benefits of charitable contributions. It is important to remember that private companies’ motivations are to maximise profit, which is especially likely during periods of economic uncertainty or decline.

In many cases the charitable arms of organisations are one of the first things to be pared down during economic downturn. While CEOs may lose their jobs for reducing their company’s dividend return it is unlikely that heads will roll if their charitable giving were to be affected in similar ways. One recent example is the plight of Northern Rock, a stalwart of charitable giving who had to reduce its donations from 5% of its profits to just £7m annually following its collapse. Only after nationalisation was it able to increase its funding to a still relatively low £11m.

It is likely that the levels of donations given during more optimistic business cycles will not match future funding as a result of the economic uncertainty ahead. However, it is not necessary to panic, as most companies should still be able to afford to donate. Innovative approaches that reinforce relationships with third sector organisations and their private benefactors are likely to see strengthened funding over time. For example, Execution Ltd, an institutional stockbroking firm has an annual charity trading day, which donates all gross commissioning raised that day to charity. This helps to emphasise to all staff members the positive differences deeds and giving can provide, rather than a 1% footnote that gets ignored on companies’ CSR reports.

Individual Funding

Third sector organisations are already suffering from reduced individual funding, with NCVO and CAF suggesting a 3% decline in the population giving to charity in 2006/7 on previous years. The combination of inflation and a slowdown in the economy is likely to hit individuals’ confidence in being able to handle their financial priorities, further affecting the volume and total amount of contributions.

It is important for organisations to examine the economic and social makeup of individuals who currently donate to them and how differing economic scenarios may affect them. Currently the OTS suggests that there exist large increases in the average donation from individuals above the £20,000 earnings threshold and again those earning more than £50,000 annually. This is reflected in the strong correlation between levels of income and the amount donated to charities and the third sector, which is highlighted by this year’s Sunday Times Rich List Giving Index showing the 1,000 richest people in its paper’s survey nearly doubling donations to £2.38bn.

Differing consumption profiles between income groups are likely to be the key to understanding how third sector organisations’ donations will be affected. Low income groups are likely to be affected the most significantly, as they are highly vulnerable to the effects of higher food, fuel and mortgage prices. The OTS highlights that the most common barrier to spending was not having enough money to spare, with 58% of non-givers and 75% of those who decreased their donations mentioning this as a reason.

There have been some whispers by economists that rather than fears of stagflation, whereby both unemployment and inflation increase simultaneously that that the economy could be heading for biflation, whereby the processes of inflation and deflation occur simultaneously. If it were to happen then paradoxically, while low income users would end up suffering from high prices of basic goods, the declining costs of luxury goods, such as televisions and cars may increase the purchasing power of the most affluent in society.

It will still be difficult to encourage the wealthiest to maintain or increase their contributions and coax donations from individuals whose annual bonus have shrunk from £1m a year to £200,000. However, it is possible and likely to be one of the most effective strategies for organisations in the short-term, despite it appearing an uphill battle. For example, Vanni Treves, a senior fundraiser of NSPCC likes to highlight how rich Britons donate relatively little compared to in the US, despite both countries exhibiting wide income gaps. Research by the Institute of Fundraising reinforces this notion, suggesting that the key to successful fundraising lies in nurturing loyal high income supporters, citing a growth by activity of 77% in star performers.

NCVO and CAF have suggested that charities would benefit from appealing to other charities’ donors rather than to the population as a whole, especially given the current shrinking of the pool of donors, to increase the donations of those willing and able to pay. Also, trends worth examining for organisations looking at approaches to maximise revenue include the number of religious donators increasing by 8% over the previous year, bucking the decline in donors; and the high incidence of married women donators giving to charity (62%) compared to single men (44%).

The oncoming economic situation will prove difficult for the third sector, as financial setbacks and instability may result in tough decisions for its leaders. However, a practical and level-headed approach to economic challenges can be used as an example of the increasing maturity of the third sector. It is imperative that organisations brace themselves for challenges, increase innovation and improve links with existing funders so that when the short-term difficulties pass the third sector will stand on an improved footing relative to both the public and private sectors, and fully take advantage of better times when they arrive.

This article was written by Jonathan McHugh in June 2008

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How can CEOs drive accountability and outcome measurement in their charities without losing sight of organisations caring supporting function?

The third sector’s role is changing as a result of moving from working predominantly in niche areas to greater involvement in core activities of public services. However, the third sector has tended to lag behind the public and private sectors in improving accountability and transparency. Given the number and range of stakeholders that third sector organisations work with, including some of the most vulnerable in society it is imperative to for organisations to build strategies that demonstrate effective governance, rather than just relying on the sector’s positive motives. Increasingly performance management systems are being used to help organisations balance the differing requirements of funders, staff, and service users, and strengthen organisations’ functions.

Developing effective monitoring to improve leadership and public perceptions

The third sector’s goals are more intangible and their ability to evaluate success less clear cut than the private sector, which focuses on profitability; or the public sector, where accountability comes through elected politicians. These differences in intension and preferred measurements have often caused problems, as funding agreements have usually been focused on inputs (where money went) and outputs (what the charity did), rather than outcomes (what difference was made).

Currently, the monitoring system of third sector organisations are largely controlled by funders, often stipulating reporting which offers minimal benefit to the third sector. Consequentially organisations spend too much time and resources focusing on providing less appropriate information. This reduces funders’ ability to fully understand the fund’s benefits, as they may receive reports that don’t fully reflect how much of an impact their money is making to communities.

However, more considered and proactive outcome measurements would reassure funders, and focus organisations minds on the provision of services. If third sector organisations were better able to highlight their societal benefits through effective performance measurement systems, whilst showing financial prudence then they would be more attractive to funders, and increase their role on the delivery of public services.

Learning to communicate more effectively with funders

New Philanthropy Capital (NPC) highlights a reciprocal problem between funders and the third sector, with funders being mistrustful of the third sector’s financial competence, and recipients being too nervous to question the funders volume or choice of reporting. However, through examining the optimum level of measurement, and having the confidence to explain the benefits of differing approaches it is possible to build trust with funders, provide them information that highlights the positive outcomes from their investment, and reduce administrative waste.

When funders ask for detailed reports they want to ensure that their money is not being wasted. However, often too little feedback is given, leaving charities unaware of how their reports are being used, or even at all. This can be demoralising, time consuming and inhibits future improvements to the monitoring system.

This is exacerbated by the timidity of some organisations in the face of funders, as they are reluctant to question or challenge their demands for fear of alienating funders. This weakens relationships and threatens trust, as charities may be hesitant to report problems or speak clearly.

NPC’s ‘Turning the Tables’ pilot study encouraged charities to be more proactive through producing their own standard report and then offering it to all of their funders. They suggested creating three types of reports:

• A core report, containing information relevant to the whole organisation.
• Project reports, containing detailed project specific information.
• Individual reports, tailored to the needs of particular funders.

This method helped re-examine the reporting structure through taking a holistic approach; improving organisations’ relationships with funders, through increasing empathy; and lowering administrative costs through reduced duplication and targeted monitoring.

Ensuring that staff members and service users are involved in the monitoring process

Engaging with staff is a useful way of encouraging innovation and ingenuity to create solutions. Given the fact that staff members are the front line of service it is necessary to seek their input to create an optimum balance between improving the needs of service users and funders’ needs for accountability and financial competence. Ensuring support for change and ascertaining whether the organisation currently has the training and capacity to handle any governance reforms is critical.

Similarly the involvement of service users in the governance of organisations and in defining outcomes is one of the factors which helps to distinguish the third sector as having a user-centred perspective, as opposed to the organisation-centred perspective so often seen in the public sector. Focusing public services on the user is one of the most fundamental challenges facing organisations who delivery and commission public services and is a key strength for the third sector.

Far from compromising the support which third sector organisations provide, a greater emphasis on outcomes and performance measurement will mean that organisations focus on delivering the services which really matter, and that funders are aware of the real impact which they are making.

This article was written by Jonathan McHugh in June 2008