Grants and contracts

The new CEO of The Charity Commission is shaping up well. In a speech two days ago it is reported:

"Younger said the sector should be encouraged by the sentiment emanating from government that the “affairs of charities are climbing the political agenda”. But in order to make the most of this opportunity, the sector must, “move from a grant mentality – the expectation that they will be supported because their heart is in the right place – to a contract mentality. To an understanding that you are going to need to bid for support for certain projects, services, or activities in return for demonstrable public benefit.”

Spot on. A message ACEVO has been making for years, before the current cuts crisis. You need a diversity of funding and income streams. Over reliance on grants is dangerous.

And an important point that needs to be made is illustrated by a story in yesterday's Times which suggests that some charities that have income "from the state" of up to 90% are in danger. Actually it depends on how this is made up. Is it a mix of contracts and grants and contracts spread over a range of bodies? And are they contracts in areas that are set to expand (welfare to work, health, justice etc)?

The CSR on Wednesday will be a mixed message for our sector. Cuts, especially as implemented by local Councils will be brutal and clumsy. There is no doubt that state bodies will often want to protect their own. As Jack Straw wrote in The Times today, "People in large organisations quickly develop a tribal loyalty. Their unit becomes their second family, which holds together and resists outsiders".

But the scale may lead to some radical change. Some Councils; Lambeth and Suffolk for example, clearly see an expansion of service delivery by the sector as the way to deliver more effective services.

This was rather borne out at a meeting last night of some of the investees of The Social Investment Business. We had gathered them together to take the temperature and find out how their loans were going.

It was interesting to see the optimism they can exploit the current circumstances for the good of their beneficiaries. A realistic optimism! We had a good mix of national bodies, Independent Midwives for example, (a marvellous group of people who even delivered a third sector baby to the wonderful Matthew Thomson and his wife!)and local groups like Harrow Carers.

There was also striking evidence that at local level groups in the sector are getting together to discuss partnerships and alliances, consortia for tenders or even mergers.

I suspect the cuts will lead to quite a big shake up in our sector. Some of this will be good, but I have no doubt some will be bad. We may loose some brilliant organisations because cuts are often carried out stupidly. It is not just the inefficient who fall.

So we await tomorrow!