Seven Cs

Funders of voluntary and not-for-profit action should individually and collectively seek to improve their practice and impact.  Organisations and networks such as the Association of Charitable Foundations and London Funders are key to this.

In March 2007 I was asked to speak at the West Midlands Charitable Trusts Group’s annual general meeting – to give my views on some of the issues facing the Voluntary and Community Sector and, in particular, funders.  The Group – which I chaired from 2008 to 2010 – is now the West Midlands Funders Network.

Eleven years on, it’s interesting to reflect on what has – and hasn’t – changed.   I plan to update these notes soon to include issues associated with Diversity, Equity and Inclusion and the UK leaving the European Union.

OLYMPUS DIGITAL CAMERA

West Midlands Charitable Trusts – Annual Business Meeting 20 March 2007

Remarks

Context – Trusts and the wider Voluntary and Community Sector (VCS) are operating within a broad, changing and complex context – including:

  • Government’s Third Sector Review:
    • cabinetoffice.gov.uk/third_sector/
    • Charity Commission publications:
      • RS15 – ‘Stand and deliver: the future for charities delivering public services’
      • CC37 – Charities and Public Service Delivery – An Introduction and Overview
    • Externalisation of public sector services (eg through Primary Care Trusts creating Community Interest Companies to externalise their existing services as new third sector organisations) and the associated potential growth in the size and shape of the third sector (and therefore potential growth in competition for funds)
    • Government’s Asset Transfer agenda + forthcoming Quirk Review report: looking at transferring the ownership and/or management of public assets (eg council buildings, vehicles, etc) to the voluntary and community sector.
    • Government (and other’s) social enterprise agenda – see:
      • Birmingham & Solihull Social Economy Consortium – bssec.org.uk
      • Cabinet Office – social enterprise action plan.
    • Devolution of power and funding (Local Government White Paper and Bill).
    • Social Accounting – new ways of measuring impact and value – see:
    • Comprehensive Spending Review 2007 – and possible knock-on effect for VCS funding, tax environment, charitable giving, etc.
    • Capacitybuilders proposed changes to future strategy for central government funding of VCS capacity building services (Destination 2014 agenda)

Complexity – individually Trusts and the VCS are having to tackle increased complexity in their own operations – including:

  • Regulation (eg impact of new requirements in Charities Act 2006)
  • Diversity of sector (CICs, asset locks, public benefit clauses, etc)
  • Funding types – loans (soft, patient, hard), “giving, buying, investing”, etc
  • Real or perceived pressure on independence that comes with taking public money – eg:
    • Charity Commission publication RS15 – ‘Stand and deliver: the future for charities delivering public services’
  • How do Charitable Trusts invest in our own development to ensure we are keeping pace with the impact of this changing context and complexity – and the opportunities and threats it represents?

Clout – Trusts have a great deal of power and influence individually and collectively (not all of which is associated with the funds we hold or distribute).  – eg:

  • Cash
  • Fixed assets
  • Reputation
  • Credibility (eg amongst grantseekers, statutory funders, policymakers – particularly in relation to trusts which undertake independent research/analysis and/or progressive funding practices)
  • Continuity (eg health authorities and individual local authority commissioners come and go)
  • Knowledge (people, data about need and impact, etc)
  • Independence
  • How well we utilise all of these assets – individually and (where appropriate) collectively?

Cumulative funds.  We collectively invest significant sums in the sector – particularly to small voluntary and community-based groups – but nationally and in aggregate we are small player – eg:

  • 576 Trusts giving £55m – of which the top 25 give £31m (56%) – (source: Directory of Social Change’s Midlands Fundraising Directory).
  • But distribution of funds across the Region is uneven – eg ranging from £0.80 per person in Staffs to £3.50 per person in Warwickshire.
  • And the West Midlands sector is huge – 18,000 registered charities (with an estimated twice as many unregistered), employing approx 44,000 people and with approx 435,000 volunteers.
  • How many of those organisations are we reaching? How do we know that the needs of those organisations (and the communities they serve) are?
  • Nationally, the VCS only gets 6% of its income from the charitable trust sector (although this figure masks different levels for different groups).

Connecting – the sector is adapting to external pressures (funding, quality, etc) by creating new working arrangements and beginning to ask itself some hard questions:

  • Forming (or at least exploring) partnerships, micro-clusters, supply chains, pro bono support, skill sharing, etc
  • Managing the market on the supply side to avert the risks associated with the market being unmanaged or managed solely by (public) funders.
  • There are particular issues for some Trusts in terms of succession planning – eg creating strategic alliances with others as an alternative route to spending out.
  • What can funders learn from this (eg WMCTG and potential West Midlands Funders Forum) individually and collectively? How good is our market information and intelligence?  How happy are with the notion of a VCS market?  Do we see the VCS as our customers, stakeholders, beneficiaries, etc?

Creativity – Trusts have the potential to support and do new things:

  • Funding the new, innovative and risk-taking.
  • Doing new, innovative and risky things ourselves (eg in how we utilise our assets). But how many of us actually do this?

Co-Production – there are new (and not so new) and exciting ways of engaging with current and potential beneficiaries, based on a shift in mindset (for us and them):

  • Investing in people, communities and organisations. Seeing them as partners who potentially can produce a financial (eg in relation to social enterprise) or non-financial return for us.  New accounting models (eg social audit) can help.
  • Mechanisms to empower people and communities – to have the resources to create their own solutions and outcomes (eg the Neighbourhood Performance Reward Grant which The Digbeth Trust is involved in piloting in Birmingham).
  • Sharing risk, sharing learning and sharing benefits.

ConclusionHow do we mobilise and utilise all our assets to achieve our objectives in the most effective way possible?  With acknowledgement to Jed Emerson – there is a risk that we treat our capital/assets like a horse carefully kept in a stable.  We don’t do anything useful with it (like harness it to a plough).  We only wait for it to produce manure (the interest) which we distribute to make things grow.  The challenge for us all is how to get both the manure (and the roses it produces) and the wheat from the field we have ploughed.   And keep a happy horse.

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