November 11, 2015

Rethinking the Charity Sector

According to Tolstoy in the opening of Anna Karenina, happy families are all alike; every unhappy family is unhappy in its own way. With so many ways to be unhappy, it’s no surprise that the charity sector manages to reflect a fair number of them.

According to Tolstoy in the opening of Anna Karenina, happy families are all alike; every unhappy family is unhappy in its own way. With so many ways to be unhappy, it's no surprise that the charity sector manages to reflect a fair number of them.

It's an odd place to work. There are around 170,000 words in the English language and roughly the same number of registered charities in England and Wales. So if there's a word for it, there's probably a charity for it. If you were re-imagining the charity sector, starting from scratch, would it look like the teetering Jenga tower we have in front of us, being poked and prodded by the media and Government alike?

Would you knowingly create a sector with a combined income of over £50bn with the requirement for all organisations to be run by a group of part time volunteers with no formal training, managing around 700,000 staff and literally millions of volunteers? Would you create mind numbing duplication? Over 200 charities tackling visual impairment - part of more than 20,000 charities dealing with  some aspect of disability. Another 1,584 tackling cancer and 4,180 looking after the animals. And would you then set them all against each other and against parts of the public sector in the chase for funding all this and be surprised when sometimes some of these organisations cut some corners in their efforts to stay afloat.

No, of course you wouldn't want that. It would be madness. Surely the Regulator would step in and sort it out? The capacity building organisations in the sector would definitely have something to say? Charities would work collectively to ensure they didn't overlap, and people creating new charities would take steps to think through whether their particular cause was genuinely unique or could be better served through an existing organisation.

Er, no.

How should the sector be structured so that we start to see it operating effectively? What could be done to streamline it, encourage partnerships to flourish between organisations with similar aims and objectives, strengthen and improve charity Boards and remove the obstacles facing these organisations from achieving their aims and objectives? Here's my wish list for Charity Santa:

1)    The Government needs to set a much more rigorous test for organisations wanting to register as a charity, or be funded centrally, that feeds in to a national strategy of defined needs. Top down priorities determined by the evidence, the 'NICE' (National Institute of Health and Care Excellence) equivalent of the charity sector, working across all departments - analysing the evidence, setting the objectives and attaching the funding accordingly. This is a role that our 'Regulator' the Charity Commission, could embrace. Move beyond the simplistic assumption that beneficiaries know best (watch out, heresy about), and move to an assessment of the evidence of need, which takes beneficiaries views in to account alongside a macro level understanding of the political and social context of a particular area.

2)    Charity governance needs a complete overhaul. We can't continue to find 1 million trustees to run 170,000 charities. There simply aren't enough accountants , lawyers , digital technology wizards and risk experts to go round, let alone do it for free when they're all time poor. As I've suggested in previous posts, the sector should allow group structures to flourish so that one Board can manage the affairs of multiple charities with similar aims. These Super-Boards should be remunerated, well trained and held properly accountable for it's work.

3)    The only successful motivation for charities to merge, currently, is if one of them is about to fail. Egos, history and culture get in the way every time even when it's self evident that organisations are falling over each other. The Charity Commission or perhaps NCVO should have a unit dedicated to helping charities find a partner to merge with - specialists in identifying areas that would benefit from economies of scale, where beneficiaries will benefit from it and where the evidence suggests bigger is better. This unit needs government funding but could also earn something from savings derived by the joint charity. Backed up by both push (motivational) and pull (sanction based) levers that can require charities to engage in the process if they don't do so willingly.

Having said all this, it's also evident the charity sector is of huge economic benefit to the country. Volunteering is good for your mental and physical health and contributes billions to the economy each year. The sector, even in it's dysfunctional state, saves the state a bundle of cash in service delivery. Its bottom up liveliness means that social inequality is often tackled locally and specifically by charities seeing a need and responding to it. So the challenge for those of us who care about it is to harness the good stuff but face up to the problems - be glad for the happy families but let's do something to help the unhappy ones too.

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