In Praise of Big charities at the heart of Big Society

Not content with simply blogging prolifically myself I do of course read those of others. The other day I came across the following passage on Nat(Lord)Wei’s blog and read with a drooping jaw:

"As for cuts, about which I intend to blog more soon, all I can say is how angry I am that so many community projects and social enterprises were led up a garden path even though the recession started two years ago and that many became so reliant on government funding and are now at risk because their funding base became so concentrated. I’m going to do everything I can with colleagues in Government to help cushion the blow, and rouse philanthropy to help transition the VCS to develop more balanced streams of income and business plans to match with skills and support from the many concerned onlookers who can help with this transition, and over time make funding from government more locally owned and commissioned – but we are where we are because of what the last Government did, not because my colleagues do not care about the VCS.

The final point to say is that the VCS is not necessarily synonymous with Big Society. Many charities and social enterprises both actually big and small can be just as bureaucratic and unempowering of citizens as Big Government, and often this is because most of the funding they have has come from the state with all the strings that can be associated with that. They have ended up becoming Big Charity, not Big Society."

Reality check time. It is a shame that Nat feels it appropriate to make a rather cheap party political point out of the cuts which the sector is facing. ACEVO members are worried about how the needs of their beneficiaries will be met as resources get more tight, not whose fault it is.

Let’s have a look at this argument in more detail:

Firstly the sector was not “led up the garden path” on funding. The growth in our sector over the last 20 years or so has been brought about through major reforms in our public services. The then Government, and indeed the Conservative one before, realised that increasing contestability was the best way to drive up standards and mainstream innovation. It wasn’t about Government randomly choosing to throw money at our sector. Or indeed forcing us to take it!

The attraction for third sector leaders in seeking to bid for this kind of work was that it allowed them to better meet the needs of their beneficiaries. Decisions to bid or not were taken in a serious way by senior staff and boards of trustees with the best interests of the organisation’s beneficiaries in mind. It would have been irresponsible for leaders in the sector to not take advantage of the opportunities to grow their operations in those circumstances.

Secondly, the idea that an increase in Government funding for the sector has made funding bases more concentrated is wrong. Many third sector organisations have seen greater stability in their funding as a result of a diverse range of contracts covering different timescales with different statutory agencies, as well as grants streams from councils and other agencies. (Incidentally there is an important debate here between the relative stability of using grants and contracts as a mechanism for funding the sector – as outlined by my Director of Strategy in the Guardian.)

To argue that Philanthropy would constitute a more stable funding base is probably more a case of leading the sector up the garden path. Philanthropy is good. And we seek it. However philanthropists only rarely have the kind of long term relationship with an organization which a contract holder would have, volumes of giving are much more likely to vary and prone to change, and we all know that some causes are just not popular enough to be supported in this way.

ACEVO has long been working on the need for organisations to have as diverse a base of income as possible – hence our work on full cost recovery and better commissioning.

Thirdly, in spite of Nat’s best efforts to ameliorate the effects of the cuts by stimulating philanthropy I don’t think that it will be enough. The UK’s givers would have to pretty much double their current giving to the sector to make up for the money invested in the sector by statutory bodies. At the same time major philanthropists have been making it clear over recent months that they are not prepared to simply make up for a withdrawing state. The vision of new business models explained above seems to conflate two separate issues. More locally driven commissioning is indeed a reform of the way in which public money is spent, but it does not in itself mean that the sector can do its job of serving beneficiaries with less money. Just because funding may be local does not mean it is not State funding!
Indeed, although mostly positive, local commissioning will in some cases remove economies of scale and create inefficiencies.

That is not to say we do not welcome the work of Nat and his colleagues to drive up giving. Here he can play an important role in backing our sector calls for Gift Aid reform and supporting our call for the continuation of gift aid transitional relief (due to end April'11). We will work with Nat and with Nick Hurd in trying to open up new capital investment opportunities and in driving up giving. We will support work to drive up volunteering, done in a professional way.

Fourthly, the claim that big charities can be as bureaucratic as the state, or that their funding model is what drives their culture need to be evidenced.

Large national charities are amongst the most trusted of institutions in the country and have grown in size because big problems often require big solutions. Other parts of the Government are pulling in quite the opposite direction, with contracts in areas such as DWP, rehabilitation and prisons, and health, depending increasingly on scale.

Let’s make no mistake, the Government needs the sector if it is going to achieve its Big Society vision. We’re not an optional extra. To suggest that we are some sort of bit player to Big Society, as opposed top being at its heart, is not simply wrong but divisive and unhelpful. And the strength of our sector comes from its diversity, big charities and small, community organisations and national social enterprises. Attempts to pit big v small is to strike at the heart of what makes us strong.

Organisations like Tomorrow’s People, St Giles Trust, the Scouts and WRVS, the RNIB and Barnados, Cancer UK and Save the Children and thousands of others deliver outstanding outcomes for their service users, and with relatively modest investment. They are working day in day out to save lives and build better communities. They save Government significant money downstream. They make a better society. They have been doing so for longer than governments have been delivering services. And will continue to do so as their size enables strength on behalf of their members and beneficiaries. I support a strong, increasingly professional and growing sector.

Organisations in the sector have not seen some kind of mystical transformation take place because they have been in receipt of public money that makes them vulnerable. They are supreme in both using state money and ensuring that the voice of the user is heard; loudly where needed. They have been building relationships with people who value the work they do, individuals, Government agencies and businesses. Their challenge in the future is to make sure there is enough money to meet the needs of their vulnerable service users.

Decisions on cuts will be made by the Coalition Government and it will be their decision to protect the sector from meat cleaver cuts or not. It will be the decision of government to protect the most vulnerable. Or not. I would hope that Nat and his colleagues used their influence to protect our work and to meet the Coalition agreement to ensure fairness in the cuts process.

The challenge for the future is not well met by blaming historical investment in that cause or criticism of the work of "Big charities".

May I suggest that rather than criticising our work Nat might think how best to use the skill and experience of the thousands of professional staff and volunteers in "Big Charities" to help build a Bigger Society? He will find a strong friend. But also a stern critic when wrong decisions are made. That is the strength of our country's magnificent third sector.