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Why do charities want a fourth term for Labour?

The sector wants another Labour government – not by a slim margin but by a massive one. That is the finding from the State of the Sector survey Third Sector carried out with research agency nfpSynergy.

These results do come with caveats; it’s a self-selected online survey for a start, but I doubt many would be shocked to find Labour is the sector’s party of choice.

What is surprising is the size of Labour’s lead over the Conservatives, given how unpopular Gordon Brown’s government is with the wider public.

The survey offered no insights into why this might be, but there are several possible explanations. One might be that those taking part found it hard to untangle their own political views when they answered, so the result reflects the bias of the sector’s employees.

Another might be that the Conservatives have not yet convinced the sector that it will be safe in their hands.

Finally, the result might reflect a view that public spending cuts are bad for the sector, which harms the Conservatives because they have talked more openly of reducing expenditure than Labour have done.

Whatever the reason, the finding does raise a couple of important questions.

First, just how in touch are charity employees with the UK as a whole, given the glaring difference between public opinion polls and our survey?

And, if they are out of step with the public, does it matter?

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Consolidating NHS charity accounts into those of trusts is a terrible idea

I have spent a lot of time recently listening to charity finance specialists talk about the concept of consolidating the accounts of NHS charities into those of NHS trusts, and they’re pretty much united in describing it as one of the worst ideas they’ve ever heard.

The first thing to say about this debate is that it looks at first glance to be an obscure point of accounting doctrine, but it actually sets a very worrying precedent that the sector must fight hard to avoid.

The second thing to say is that, as far as I can tell, consolidation seems to have only one possible positive benefit to anyone, and it’s got nothing to do with the intentions of those who dreamed it up.

The idea, due to come into force this year, is an unforeseen consequence of an obscure accounting regulation called IAS 27, which says that if a public body ‘controls’ another body, it should list all that body’s assets on its balance sheet.

It applies to NHS trusts because in most cases, they act as sole corporate trustees for their associated charities. And according to IAS 27, if you can appoint and dismiss the trustees of an organisation, you control it. Ipso facto, the assets of hospital charities belong to those hospitals, and ought to be on those balance sheets.

This sets a worrying precedent because it suggests public bodies could use charitable funds as a substitute for public funds.

In fact, it could make it appear as if approximately £2bn in charitable funding is actually Government money, and could offer plenty of scope for fiddling the books in the boardrooms of NHS hospitals.

Curiously, however, despite the fact that this rule appears to be rolling inevitably into existence, none of the parties involved seems to particularly want it: the NHS and the Treasury don’t seem to really care whether trusts consolidate or not, while the trusts themselves are almost as keenly opposed to it as the Charity Commission.

One obvious answer is for the NHS trusts to stop being sole trustees. In fact, trusts have already formed a queue asking for permission to change their governance arrangements.

The commission, however, is lukewarm on this solution, largely because, while it would solve an immediate difficulty, it wouldn’t resolve the real problem – that the Government believes charitable cash can be recorded on a public body’s balance sheet.

Notwithstanding the commission’s view, I think changes in sole trustee arrangements at NHS charities are the one real benefit to come out of this whole thing. I don’t trust NHS trust managers to act impartially as trustees of associated charities.

It’s a job that could easily require them to act against the best interests of their employers. And having a government servant running a charity could reduce public trust in it.

If a better governance structure for hospital charities is the unforeseen consequence of this unforeseen consequence, it can only be a good thing.

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Charities should take notice of the anti-X Factor campaign


For me, two recent and seemingly unconnected events have highlighted the power of ideas and the ability of civil society to
harness them.

First, the recent visit to the UK of Eboo Patel, founder of
the USA’s Interfaith Youth Core. Eboo’s thesis is that we are living at the
collision-point of four seismic shifts: religious revival; increasing
interaction between people of different faiths; a youth bulge (he notes approximately
60 per cent of Iranians, for example, are under 30); and the fact that extremists are
the only people organising around the first three trends.

I don’t know enough to be able to interrogate Eboo’s
hypothesis with any real vigour. But what was startling about listening to the
man was his incredible ability to bestride the intellectual debate whilst
simultaneously evincing a sharply practical focus on what civil society can do.

The Interfaith Youth Core is all
about practical action, bringing young people together from diverse backgrounds
to talk and work together on issues of concern to them and their communities.
Theologian, historian, philosopher, sociologist, this former Rhodes Scholar,
and now part-time adviser to President Obama, seems, above all, a man of action.

I came
away inspired at his ability to combine cool analytical rigour with a warm,
pragmatic awareness of the inevitable messiness of community organising. And as
I did, I was reminded once again of the incredible power that lies in
harnessing ideas to movements – and that, whilst in the UK,
in the third sector we (inevitably and maybe justifiably) spend a great deal of
time discussing institutions and personalities, we should remember the wider
notion of civil society and the part we play in long-term social change.

Which, in turn, led me to get unfeasibly excited about Rage
Against the Machine’s rise to the top of the charts
courtesy of a campaign
against the corporatisation of popular culture which started out on a Facebook
page and ended up capturing the imagination (for a few days at least) of much
of the population. And all thanks to the ingenuity and savvy of Jon and
Tracy Morter, getting active with their idea.

Say what you like about the song Killing
in the Name
– Radio 1 DJ Bruno Brookes played
the full uncensored version live on his show in 1993 and was sacked in 1995,
pop-pickers – this feels to me like another neat illustration of the power of
people coming together around an idea – the notion at the heart of civil
society.

So as we slink off into
the snow and start the new year, let’s remember that we’re about ideas and social
movements as well as institutions and services.

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Has Gift Aid reform come any closer?

Some experts on giving and philanthropy have been wary about the idea of redirecting to charities the tax rebate that can be claimed by higher-rate taxpayers on Gift Aided donations. Such a move might have unpredictable effects on giving by the rich, they warn – especially in a continuing recession with a new 50 per cent tax rate looming for those earning more than £150,000.

But the recent research by a group of academics for Her Majesty’s Revenue and Customs indicates that most higher-rate taxpayers would not be too fussed by the loss of the rebate. Only a third of them claim the rebate, it says, and another third are not aware that they are entitled to it. A third of those who do not reclaim say that’s because it takes too much time and effort.

“Given a choice,” the research concludes, “most higher-rate donors would appear to prefer a system that channelled all higher rate relief to charities over the current system….A key theme from the qualitative interviews was that changing the system would make little difference to major donors.”

The research examines not only diverting higher-rate relief to charities, but also the idea of establishing a new composite rate that would allow charities to receive a fixed proportion of donations by both standard and higher-rate taxpayers. At a rate of 30p per £1 donated, the researchers reckon that giving might fall a fraction, the total received by charities (including the tax relief) would rise by 2.4 per cent, and there would be a 4.3 per cent cost saving to the Exchequer.

At a rate of 37p, there would be a slight rise in giving, a 10.3 per cent rise in the amount received by charities and a 21.5 per cent increase in the cost to the Exchequer.

No prizes, then for guessing which of these the sector would prefer; nor, indeed, for predicting which the Government would go for – if, indeed, it went for anything. The research appears to settle many of the anxieties about the effect of changing the system on donors who are higher-rate taxpayers, but there is still no commitment by ministers to do anything more than look at Gift Aid reform. It has now researched one set of proposals, but there has been no such examination yet of another strongly-supported proposal: replacing an opt-in system with an opt-out one.

The best that can be said is that we are now a bit better informed. Whether that brings us closer to a commitment from politicians is debateable. The campaign by the sector is far from over.

Think it’s easy to define volunteering? Think again

I think I have found the common thread that unites people who work in volunteering: they love a good debate, but they know it will never lead them to agree.

The topic for discussion at Volunteering England’s AGM earlier this week was ‘Volunteering for profit: is it ever ok?’

John Ramsay, head of volunteering at Age Concern and Help the Aged and a panel member for the debate, acknowledged early on that some people struggled to see the point of it.

When he told his colleagues about the discussion topic, he said, their response was: “Rather than having your esoteric debate, why don’t you come back to the office and do some work?”

At first, I was on his colleagues’ side. Surely the answer is simple: if you do unpaid work for a charity or a community group, it’s volunteering. If you do it for a business, it’s work experience. Why waste time talking about it?

But as it turned out, things got much more complicated. A divide emerged between the stalwarts who thought volunteering should only happen in the voluntary sector, and the movers-with-the-times who had different ideas.

What if, for example, you volunteered as a befriender in a private care home? The job has to be done by a volunteer, because residents appreciate the efforts of someone not paid to be there for them. But the home might make more profit by having befrienders.

And anyway, an audience member pointed out, many charities tender for contracts from local authorities. If having volunteers means a charity wins a contract, and thus expands and starts paying its staff more, aren’t those staff making profit from volunteering?

All sensible points, I was thinking, but why does it matter what ‘counts’ as volunteering and what doesn’t? Justin Davis Smith, Volunteering England’s chief executive, told me some volunteer centres refused to refer volunteers to private sector organisations. And that’s why it mattered.

So it’s a shame, really, that no-one could agree. The closing comment from David Brindle, public services editor at The Guardian and chair of the debate, was telling. “There seem to be a lot of unresolved issues here. Maybe you should sort them out before you start talking to the media.”

A New Year wish for the social investment bank

So this is Christmas. And with another year over and a new one not yet begun, the pre-Budget report tells of untold riches in dormant accounts to be used to fund a social investment wholesale bank and projects for young people.

The latter will be routed through the Big Lottery Fund. I just hope – I really, really hope – that we’re not going to parcel this up and shovel it out as bog-standard capital and short-term, fixed-life, project-focused revenue grants.

Why? Because the ills of the funding status quo are so deep and well worn that they threaten to see off what Christmas cheer I might start to be feeling.

Let’s remember that the insistence on tying grants almost exclusively to short-term deliverables means that some of society’s most valuable work takes place in profoundly unstable institutions, because charities are over-stretched and under-capitalised.

In our crazy, dystopian status quo, immediate outputs are prioritised over long-term outcomes; funding is insufficiently flexible to respond to changing circumstances; planning horizons are typically limited to one or to three-year cycles: and because key staff are not retained, core knowledge and competence is lost.

Funding follows connections and charisma, not necessarily effectiveness. There is no incentive to outperform, because restricted funds are clawed back in the event of efficiency gains, or leveraging of other income. Demands for unrealistic exit plans concoct the fiction that complex, deep-seated problems can be solved in arbitrary, fixed and short time frames.

But it doesn’t have to be like this.

A number of funders have made great strides. The Big Lottery Fund has shown itself pretty adept at smart investment.

So what I really, really want this Christmas is for the Big Lottery Fund to look over the brow of the hill to those folk who’ll be getting excited about the social investment wholesale bank, and think hard about what social investment can teach us all.

In the past decade, a range of agencies, such as Venturesome and The Impetus Trust, have pioneered techniques for social investment. Perhaps too often we’ve focused on loans. For my money, the principle of investing in the underlying and long-term strength of institutions, not just the projects they carry out, is what really counts in social investment.

So when it comes to unclaimed assets, any investment in young people is going to be infinitely stronger if it’s informed by the patient-capital approach of social investment.

Happy Christmas.

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Angela Smith’s breach could kill the Compact

Sir Bert Massie, Commissioner for the Compact, described it as challenging; others might prefer the word tortuous. But the Compact on relations between Government and the Third Sector in England finally completed its slow metamorphosis from a 160-page document to a 22-page one this week.

It was a low-key affair, predictably ignored by the national media and without an event to mark the occasion. This probably came as a relief to third sector minister Angela Smith, whose recent Compact breach might have led to some ticklish questions about the apparent contradiction between her words and deeds.

Smith’s breach has taken the wind out of the Compact, at just the worst time. It may even prove fatal. After all, why should anyone now obey the agreement if the Government department responsible for championing it comes up with the classic excuse for breaking it by saying other things were more important?

The Compact has achieved some spectacular, but very isolated, successes in its 11-year history. But the fact remains it isn’t working.

Richard Corden, chief executive at the Commission for the Compact, says 2010 will be about promoting the Compact in central government and its quangos. He is certainly the man for that job – few people in the voluntary sector understand how Whitehall works better than him.

But if little progress is made over the next six months, will whichever government is in power consider it good value to give the commission another £6m to champion the Compact in its next three-year funding settlement for 2011 to 2014?

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NGOs owe a debt to amateur bloggers

It’s been five years since the Indian Ocean tsunami. Not long, but an age in terms of online developments.

A revolution has occurred between then and now in how NGOs get information to those affected by disasters, and how they report events to the rest of the world.

But back in the final days of 2004, reports emerged of how amateur ‘web loggers’ (remember them?) – not NGOs or news organisations – were publishing some of the most vivid accounts first.

We learned how a Sri Lankan blogger, Morquendi, sent text messages from his mobile phone when his internet connection failed, giving descriptions of scenes of mass burials. A blog group based in India began posting his texts on their blog, which in turn was read by thousands of people around the world – a sort of proto-Twitter.

And another blog run by volunteers in India, the South East Asia Earthquake and Tsunami Blog, became a key resource for aid agencies.

Fast-forward five years, and the Thomson Reuters Foundation is among those to have caught up, with the launch yesterday of its Emergency Information Service.

EIS says its ‘action units’ – teams of specially trained Reuters journalists – will, within hours of a disaster, arrive in affected areas to seek out, collate and disseminate information to the disaster-struck population.

It promises to be incredibly slick: the teams will “assimilate and process multiple information streams, with information services in local languages via SMS, email and web”. Information as aid, according to Monique Villa, the foundation’s chief executive, will be as crucial as shelter and blankets in an emergency in 2010.

Which makes it all the more impossible to re-read those 2006 Asian tsunami stories about sketchy, uncoordinated – but nevertheless brilliantly resourceful – efforts by amateurs, without asking the question: why weren’t NGOs alive to the possibilities of the internet five years ago?

And what opportunities might they be missing now?

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You think 2009 was bad?

So that was 2009. A year that began with a rather limp recession action plan and a damning National Audit Office report on the Government’s £446m attempts to strengthen the third sector, ended with the appointment of a new job-sharing, on-loan director-general of the Office of the Third Sector and the worst Compact breach in the agreement’s inglorious 11-year history.

In between there were job losses – bucket loads of them – as well as charities withdrawing from unprofitable welfare-to-work contracts and the acrimonious closure of the Third Sector Leadership Centre. Good, wasn’t it?

As for the highlights… well, Christie’s, the Manchester hospital charity, fought a loud and successful campaign to retrieve the £6.5m it had invested in failed Icelandic banks (although other charities didn’t get their money back), thanks to some government sleight of hand that nobody cared to investigate and the Scout Association beat ministers into submission with their persistent Stop the Rain Tax campaign.

A new Cabinet sub-committee was set up to do something or the other about removing the barriers that might help third sector organisations win central government contracts.

But perhaps the best news is that by this time next year, 2009 might not look so bad after all. Spring cuts at local authorities, the looming Comprehensive Spending Review and this wretched recession are only likely to increase the chill factor.

It would be nice to think things won’t turn out to be that bad over the next 12 months.

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Do we need a charity sector commentariat?

Hooray, hurrah, huzzah! (Is huzzah a word?) I have been asked to blog. Officially. By a proper, bona fide news magazine. Third Sector no less – doughty organ of civil society and recorder of the slings and arrows that befall our collective sector from time to time. Yet brief flush of pride aside, aren’t there some Troubling Questions About Blogs to be factored first, before I accept?

Foremost, does anybody read blogs? I mean real people who have real in-trays and real deadlines and (most important of all) real people in real need of the services their charity provides? And what’s the upside here?

Presumably the point at which my putative readership exceeds a value of n (where n = people called Wilkie closely related to me) is the point at which I bring an unholy brouhaha crashing down on the frankly brilliant charity (London Youth) I work for through some indiscretion or other (committed in haste to my computer screen), by admonishing a town hall bureaucrat, the tyranny of innovation, the idiocy of 90 per cent of funding regimes or any number of items I’m slowly warming to the idea of sounding off about.

I have some more noble concerns too. I wonder if we’re not falling into our own little trap of celebrity in the third sector – focusing too much on people and not enough on ideas and institutions. Don’t blogs beget the exact same sort of navel-gazing and narcissism we can do without?

Plus is more really more? Does a proliferation of voices give life to a healthily, dynamic, diverse and informed commentariat? Or do we simply substitute depth for wafer-thin breadth when we open up airwaves and fibre optic cables to all who wish to comment?

When Marshall McLuhanfamously predicted we would all have our fifteen minutes of fame, he might have added we’d all also have 15 gigabytes of unlimited broadband which we could bombard the world with our thoughts. Dave from Nantwich on climate change anybody?

So do I really want to blog? It’s not at all clear.