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Let more public bodies join British Waterways in the voluntary sector

Last week, British Waterways said it wanted to leave the embrace of Government, and set up as a charity. Inspired by the National Trust, it said it could stand better on its own two feet.

This started me wondering. How many quangos would be better off if they followed British Waterways’ example, and set up as third sector organisations?

An awful lot, probably. In fact, the more services which can be moved out of a bloated public sector, the better.

Skeptics might say this has been tried before. The Government has often tried to slough off services through privatisation, and has had very mixed success. Why should this be any better? What are the advantages of charitisation? Or social enterprisation?

The third sector’s advantages over the public sector are obvious. It can cut costs, introduce innovations, and respond to change much more quickly. And a charity can attract more publicity, more trust, and more goodwill than any Government organisation.

But it has advantages over the private sector, too. A not-for-profit organisation will remain focused (indeed, often becomes more focused), on the end-user – the beneficiary.

This isn’t always true of the private sector. Sometimes the best way to make money is to hire expert negotiators, run rings round public sector officials at the contracting stage, then sit on your hands while the cash rolls in.

It isn’t just quangos that could benefit from being charitised, either. Other areas would also benefit – the water, electricity, gas and rail monopolies, to name but a few.

The most obvious example is Welsh Water, which aims to bring benefits to the people of Wales – around £21 a year off the water bill of everyone in the principality, the company says, because of its lack of shareholders and its greater efficiency.

NHS trusts and local government departments could also benefit.
It’s an amazing experience hearing people like Jo Pritchard, of Central Surrey Health, talking about the difference that moving out of the NHS and into an independent company has made for health workers.

Instead of sitting and waiting for instruction from the top, she says, CSH’s employees introduce innovation on an almost daily basis, strive to reduce inefficiencies, and enthusiastically spread best practice throughout the organisation.

When the Government first introduced the ìright to requestî initiative, which aimed to move NHS services out of the public sector and into social enterprises, it seemed that it had finally understood this idea.

Sadly, this idea seems to have hit the buffers very quickly – partly thanks to opposition from unions, legitimately worried that this was a Government attempt to do things on the cheap – and the NHS has been named ìpreferred providerî for all health contracts. The right to request concept hasn’t caught on elsewhere in the public sector, either, where examples are sporadic at best.

In my view it’s time for Government to change this. Anywhere there is a quango, a privatised industry, a local authority department, which could stand better on its own two feet, it should be allowed to do so in the third sector.

Funding the Future conference: policy was thin on the ground as Nick Hurd recycled his jokes

Shadow charities minister Nick Hurd announced to delegates at the Funding the Future conference yesterday that he was going to tell them something they might know already.

“There’s going to be a general election soon.”

It was not the first time he’d made the joke. He said it last week at an Institute of Fundraising conference, and Third Sector colleagues tell me he’s said it on other occasions too.

But if there is going to be an election, it would be reasonable to expect both Hurd and charities minister Angela Smith to use yesterday’s conference – at which more than 1,000 charity workers were gathered – to promote manifestos detailing what they would do if they became third sector minister after the election.

But alas, this was not the case. Smith took to the podium first, and gave a potted history of Government policy on the voluntary sector, which sang the praises of the NCVO’s Funding Central website, the recession action plan and Grassroots Grants (but neglected to mention the axed £750,000 Campaigning Research Programme).

She spoke about “challenges and opportunities for us all” and “building long-term capacity” but, aside from mentioning her excitement about the forthcoming social investment wholesale bank, did not discuss future policies.

Nick Hurd’s attempt offered more, but not much more. He reiterated his belief that the third sector should really be the “first sector”, said charities and community groups were the “glue that holds communities together” and criticised what he called Labour’s “initiative-itis”.

On policy, he said the Tories would start with making it easier for charities to claim Gift Aid, by cutting through what he called a “thicket of regulation”. But he said discussions on bringing in an opt-out system were “not going anywhere.”

He said he wanted to encourage individuals to donate more to charity, and he wanted the Big Lottery Fund to be more independent of government. He also wanted to develop a “culture of intelligent grant-giving,” he said.

But the audience was not swayed. As I left the hall, I heard delegates saying Hurd “didn’t say anything proper” and was treating the occasion as a job interview. Those I spoke to afterwards seemed unanimous in the view that things would be difficult under another Labour government, but that it was “better the devil you know”.

Making sense of social media is like herding cats

We had half-an-hour to go before the panel I was chairing at the Media 140 event on social media in the third sector event last week was due to face the audience. Fear was setting in.

Huddled in the corner, the panellists and I were chatting about the kinds of questions I would be putting to them before opening up the session to the audience in the room and on the web. And while we had all worked with social media, the sense that we might be out of our depth was creeping in.

“What does that question mean?” asked one panellist, pointing to the question ‘Where is our community?’ which had been suggested as a discussion topic.

“Er, not too sure to be honest,” I replied. After a bit of thought I figured we had better skip that one, much to the panel’s relief. No one could be quite sure if it was an important question or just gibberish (although I’m almost certain it was the latter).

Trying to identify what works and what doesn’t in social media is like trying to herd cats. Sometimes social media initiatives fail for no discernible reason. Sometimes they succeed, but we’re at a loss to know why.

Ten years ago most people were only just online, and we still had time to make a cup of coffee while our dial-up connections loaded up websites. So it’s laughable to think that anyone should already have some magic formula for something as emergent and bottom-up as social media.

We really shouldn’t get intimidated or worried by it, especially since there’s so little financial risk involved.

Social media is a chance to experiment and play. Your social media experiments might not result in what you planned, but the unexpected isn’t always the unwelcome.

An extra five hundred million for charities? Here’s why See the Difference is too good to be true

According to Dominic Vallely, one of the founders of the soon-to-launch charity video sharing website See the Difference, it is like being at the beginning of Google. At least that’s what he told me when I visited his offices last week.

Vallely restated his bold claim in terms more relevant to the sector. “Children in Need and Comic Relief pioneered the idea of donating through a telethon,” he said. “We’re pioneering the next big thing: the video revolution for charities.”

It’s difficult to believe that fundraising is about to be radically shaken up – after all, a lot of charities already have videos on their websites and share these on Facebook and Twitter.

But Vallely, who was previously a senior producer at the BBC, has some big backers, including Microsoft and Virgin Money Giving. He’s ambitious: he has set the website a fundraising target of nearly £500m in its first five years.

And there’s more to it than just a library of charities’ videos, which would rely on donors bothering to go to the website and watch them. The point is to make the charities’ work a talking point, so people email videos to their friends and post them on their blogs and social networking pages, just like they do with YouTube already.

But before charities start getting over-excited, there are a few things to bear in mind. You can’t just send the videos you’ve already made: they have to fit the See the Difference model of telling a story that highlights a specific project, and pledging to tell supporters exactly how their money was spent.

This means making sometimes complicated accounting arrangements so you can ensure that £10 donated to a specific school in, say, Tanzania, is actually given to that school.

The site intends to cater for a young, headstrong generation who demand to know exactly how charities spend their money and who are sceptical that a monthly direct debit would be absorbed into general running costs.

If See the Difference gets these people giving, it will have succeeded where many charities have failed. But the website could have a different effect: of reducing unrestricted income as people give directly to specific projects.

And in the long term, it creates a cultural shift. Charities are telling their supporters, in effect, that they have a right to decide where their money goes. Surely a charity’s staff, who have knowledge and experience in their field, should decide on the most sensible allocation of funding? Will it become tough to raise general funds if a “donor choice” attitude becomes widespread?

But there could be £500m at stake here – about a one per cent increase in the total level of giving in 2008/09. For that amount, giving more of a say to demanding donors could be a risk worth taking.

Sharing online applications? That’s charitable

Popular opinion has it that charities are reluctant to share expertise and resources with one another. Which is why Child’s i Foundation‘s promise to make available for free its digital tools to other charities stands out as an act of goodwill.

Digital expertise is something Child’s i has in spades. The British charity, which was set up in 2008 to build a home for abandoned babies in Uganda, makes a point of using only free or low-cost resources. Up until a few months ago, for example, its website was created solely out of a free WordPress blog, though it has recently switched to a more sophisticated site.

Its developers have also created a bespoke code for its Buy a Brick fundraising campaign online, which has so far raised more than £10,000. And soon, the charity promises, the codes to both the website and the Buy a Brick tool will be available free to any charity that wants to use them.

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We’re going to the zoo, zoo, zoo…how about you, you, you?

A woman of principle, or a bit of a crank?

The question relates to Angela Smith, Minister for the Third Sector, who has made it clear that she’s not prepared to attend an event at London Zoo because she’s a strong supporter of animal rights and a patron of the Captive Animals Protection Society.

That means she won’t be at next Monday’s annual meeting on the Compact, which is an important occasion in the continuing development of the agreement that regulates sector-government relations. The venue was fixed last September, but officials weren’t then aware of the minister’s scruples.

In one sense it’s all very convenient for her – she won’t have to face the music for her flagrant and admitted breach of the Compact last November, when she scrapped the £750,000 Campaigning Research Programme and withdraw grants to 32 small organisations at short notice.

Her colleague Dawn Butler, minister for young citizens and youth engagement, will go to the meeting instead and deal with the inevitable criticism of the decision, which has still not been convincingly explained.

But Smith’s track record suggests that she’s not just using animal rights as an excuse. She worked for the League Against Cruel Sports for 12 years before she became an MP, and there’s nothing in her political record to suggest she’s unable to tough out an unpopular decision.

Her position on the zoo will seem eccentric and self-indulgent to some. One can just imagine her officials, who have of course loyally taken the rap in public for the mix-up, raising their eyes silently to heaven as they close her office door behind them.

But I suspect she will gain a lot of respect in the sector over this episode. It makes a refreshing contrast to the trimming, expediency and cynicism we’ve become used to in our politicians. And zoos are strange and sad places, whatever you say about their role in education and conservation.

And what if she had gone? The way would have been open for the animal rights lobby to point out her patronage of the society, and then she would have stood accused of hypocrisy – which is arguably the worst sin of the lot.

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The Right to Ask campaign misses the point

The question of whether charities have a “right to ask” the public for donations has been stirring up controversy lately.

The Institute of Fundraising wants to remind the public that fundraisers – whether they stop you on the street, knock on your door while you are in the middle of dinner or phone you at home – have the right to do so because their beneficiaries need funds.

The aim of its campaign would be to reduce bad feeling among the public towards charity fundraisers, and to give fundraisers a more positive attitude to their work.

The institute is right to address the issue, but I think it is missing the point. Plenty of charity fundraisers know that they have a “right to ask”. The trouble is, most of the general public do not feel confident about their own right to say no.

I used to get annoyed and even embarrassed when I was stopped by face-to-face fundraisers. I felt guilty about not signing up. My new approach – of explaining that I do my charitable giving online and will not sign up in any other way – seems to be working well. But the trouble is, I am in a minority.

If people felt able to politely say no without feeling guilty about it, they wouldn’t have such a problem with fundraisers. If they wanted to support the charity’s work, they’d sign up. And if not, they’d let the charities spend their time talking to other people who might.

But I suspect this is a message the sector is less keen to promote. People do sign up because they feel guilty, and this is probably more common with face-to-face and door-to-door than with other types of fundraising. If these folk started saying no, charities could be sacrificing cash to appease public opinion.

Is it a price the sector is willing to pay?

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Gift Aid reform: here’s one reason why progress is slow

What is the charity sector trying to get out of Gift Aid reform?

Many systems have been proposed, but none have gained much traction with either the Government or the sector. Should we have an amended opt-in system or an opt-out system? What about an accounts-based system? Or a composite-rate system? Or a system whereby higher-rate relief is transferred from the higher-rate taxpayer to the charity, with a portion of tax retained by the Government?

I suspect progress is slow because charities are seeking two different benefits. One is a reduction in the administration costs of each donation, and that seems achievable. The other is a system that would make Gift Aid payments easier for charities to claim, which would mean the Government would have to pay out more cash on more donations. That seems unlikely.

The Treasury says it is keen on a ‘revenue-neutral’ solution to the problem, according to the academics who drew up its most recent report. It’s unlikely that the agenda would include anything that cost the Government cash – certainly not in the middle of swingeing public spending cuts.

Some of the wider-ranging proposals for reform, such as a recent Treasury model for scrapping the current higher-rate relief and replacing it with a new benefit, are beginning to look like a dice roll.

This suggestion involves getting rid of the 25p benefit to taxpayers and replacing it with a 25p benefit to charities. The move looks neutral, but it could reduce the total tax rebate on the donation, which would hurt donors more than it helps charities.

Would the reduction in the total value of the donation be compensated for by the fact that more cash ends up in the pockets of charities? Who knows? The only way to find out who would win would be to implement the new system and see.

And there is an added corollary: even if reform does work in favour of charities, the sector faces a large and expensive headache in the form of endless legal quibbles, new auditing procedures, reprogramming every fundraising database, and extensive in-house retraining.

All this suggests that charities should concentrate on cutting down administrative costs. One way to do this would be for the Treasury to implement an accounts-based system that would measure how much money charities receive, then to pay out a percentage.

But the Government hasn’t looked keen on this – possibly because it wouldn’t really be tax relief at all, but rather a donation from the public purse. It would be hard to measure reliably how much money charities actually receive in donations, which could open the door to creative accounting or even outright fraud.

But I do think this idea could work if it was confined to smaller charities which aren’t claiming large sums in Gift Aid and which would benefit most from reduced administration.

They could be allowed to claim a flat rate percentage of their donations as Gift Aid. A similar system has already worked with other tax reliefs; VAT rebates for small businesses are handled in a similar way.

Such a system would be easier to negotiate if the flat rate was set at a level no higher than the current average reclamation rate – just over 8p in every pound donated. It would save a lot of time and effort.

Perhaps larger charities should concentrate on streamlining the current system, rather than venturing into an uncertain world of wholesale reform.

What is it like to be a chugger? I asked one, and this is what he told me

I never used to stop for chuggers. Before I became Third Sector‘s fundraising reporter, I was one of those annoyed members of the public who walked past quickly, avoided eye contact and mumbled “No, sorry” to any fundraiser who tried to stop me.

I still maintain that I will never sign up for a direct debit on the street, just like our blogger Felicity Donor. I’d much rather choose my charity and donate online. But unlike Felicity I now, instead of ignoring chuggers completely, stop to politely explain why there’s no point in them trying to persuade me.

And so, as I was walking down the high street in Hammersmith the other day, I stopped for the bearded hippy in an EveryChild jacket who waved enthusiastically to me.

He asked me what I did for a living, so I fessed up. “I’m a journalist,” I said. “I cover charity fundraising for Third Sector magazine.”

But instead of smiling and giving up, as chuggers usually do in response, he was intrigued. “It’s a real scandal, you know,” he said, “agencies pay chuggers loads of money. I used to earn £500 a week from an agency.”

I replied that people were often annoyed about chuggers getting paid, but it’s surely unreasonable to expect fundraisers to stand in the freezing cold all day for nothing.

“Yeah,” he said, “but there’s more…”

According to him, there’s a widespread belief among street fundraisers that if an agency decides it doesn’t want a particular chugger any more – perhaps because that chugger is becoming jaded – the agency will find an easy way to fire them.

“They’ll put you in a quiet area, with a rubbish team and a difficult charity, then set you high targets. Then they’ll get rid of you if you don’t meet them,” he said.

And becoming jaded was partly why he quit his agency job and started working for EveryChild, which employs its own team of chuggers.

“You never feel any connection to a charity when you’re working for an agency,” he said. “You just move from one to another every week. I never want to work for a profit-making business again.”

He also said he could never imagine himself doing anything other than chugging. “I’ve been doing it for four years,” he said. “I like fresh air, I like talking to people and I like raising money for a good cause.”

But what about the bad press, and the abuse from the public? That’s life, he told me, and you can’t let people grind you down.

And after all that, he let me wander off. He didn’t even ask me to sign up.

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A new youth activism magazine: just so crazy it might work

In a move that flies in the face of received wisdom on the best way to grab the attention of today’s young activists, Christian Aid’s youth campaigning arm, Ctrl+Alt+Shift., launches a biannual print consumer magazine this week.

Although the charity is not saying how much the magazine cost to produce and distribute, the amount is likely to have been considerable because, as charities know, producing and distributing paper magazines is very expensive.

And for any publisher, launching a new consumer title in a recession is a risk, and this one has a cover price of £3.95.

To add to the challenge, the magazine is aimed at young adults who, we are told, are all broke and spend their time online reading content for free.

But Katrin Owusu, Christian Aid’s head of youth marketing and innovations, is confident the risk will pay off.

“It’s just another platform to build our community,” she says. “The idea that print is dead is not true; if it’s niche, of high-quality and interesting enough to collect then people are happy to part with money.”

Owusu isn’t just acting on a hunch. She points out that last year the organisation published a limited-edition graphic novel, Ctrl+Alt+Shift Unmasks Corruption, with a cover price of £5, that sold 7,000 copies.

And the new magazine is not strictly new: it existed up until last year, albeit in a much smaller format, as a free fanzine distributed in bars and galleries. The bigger, bolder consumer title, she says, has been called for by Ctrl+Alt+Shift. supporters across the world.

It’s is certainly a beautiful and thoughtfully produced product: stylish, weighty and full of wry comment on consumer culture – an affecting six-page fashion spread, for example, highlights interrogation methods at Guantanamo (headline: “Detention to Detail”).

Given the risks, it deserves to do well.

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