Mergers and rationalisation

An interesting article in The Times recently by Camilla Cavendish It is worth reading as it make some interesting points. Here it is in full;

"Nearly half the budget for voluntary organisations comes from the State. We need fewer, better charities

'What would Jesus cut?" is a question that seems to fit the moral outrage of our times. Let's see. Sex scenes, perhaps. Moneylenders' bonuses, for sure. Probably not VAT, for the VAT rise will bring in infinitely more cash than closing libraries, and shoppers seem to have shrugged it off already. But possibly - hear me out - some charities. He might question some of the Good Samaritans who need the taxpayers' help to volunteer.

I recently went out visiting with a charity that is operating in what turned out to be a rather crowded market for good works in one London borough.

Our first stop was a doddery old lady on a tidy estate. She looked a bit puzzled when I asked her about the charity's work. "Well the Social came this morning," she said, trying to help. "And the day centre is very nice, my neighbour takes me." My enthusiasm for the charity dimmed. But its eager young staffer didn't seem to notice that his work was, if not actually duplicating, then apparently adding nothing noticeable to her life.

Not all charities are equal, however well meaning they are. That is the brutal truth, temporarily concealed by the orchestrated outrage over cuts. The head of the Association of Chief Executives of Voluntary Organisations (Acevo), the eloquent Sir Stephen Bubb, has called for charities to be ring-fenced from local authority cuts, to protect the Big Society. Does that include all 50 breast cancer charities? Why? Sir Stephen might do better to find ways of distinguishing the truly great from the merely nice. For otherwise we risk losing some excellent organisations such as Fairbridge, ThePlace2Be, HomeStart and others (insert your favourite) that have proven track records of real value.

The coming cuts do look worryingly indiscriminate, because the coalition has put its agenda of devolving power to local authorities ahead of trying to knock sense into them about what to cut. Many councils are inclined to protect their top salaries, bureaucracies and in-house contractors at the expense of libraries, bus services and homeless shelters. Ministers will get the blame for this, and they should have known better. But they are partly trapped by the extent to which some charities have been nationalised.

I have sat on a number of charity and non-profit boards over the years, and run a non-profit organisation. One thing that has become perfectly obvious is the jump in government involvement. Public money made up around a tenth of charity budgets in the 1980s. Now it is nearly half: and more for some of the biggest, such as Barnardos and Action4Children.

As a result, the default position for many fundraisers is to look to the State. A whole industry has emerged of charity consultants who know how to fill in the complex forms required to unlock public money. They will write your equal opportunities policy, your health and safety policy, your governance code. It's quite an art.

In the 1990s I led a regeneration partnership that became skilled at raising money from quangos, local authorities and central government, as well as the private sector. We made ourselves a safe home for government "overspend" by always having a project ready to go. We ticked the box on ethnic minority employment because we employed a lot of Irish builders, and we discovered that the Irish counted as an ethnic minority. I drew the line, though, when I was asked to join a group with the sole purpose of extracting money from an EU fund, for which we would have had to invent schemes of no real value to our community, only to our balance sheet.

Public officials, only human, often prefer to dribble money out to many groups rather than concentrate cash on a few where they could have more impact. Research by the National Council for Voluntary Organisations suggests that the number of charities has doubled in the past 40 years, to 160,000. Many in the sector see that as a sign of success. But is it? Such a vast cottage industry in the private sector, some of it duplicated, would by now have resulted in consolidation.

I once set up some charitable schemes for Pearson plc, the multinational I was working for. As one of the world's biggest publishers, we were passionate about literacy. When I researched it, I had to report back to the board that the field was saturated: almost every other large American company already had a literacy programme. But despite this, what infuriated me was there were still millions of people who were illiterate. Couldn't they have worked together?

An untold story is that beneath the cascade of government cash, private donations in Britain have stagnated. The NCVO says that the number of individuals giving to charity, as a proportion of the population, is in long term decline. The virtual freeze in private giving during the last economic boom is perplexing. Labour made generous provisions for Gift Aid, yet neither rich nor poor upped their giving significantly.

Was that because people felt less need to donate at a time when charities appeared to be prospering? Were they sceptical that their money would be well spent? Martin Brookes, of New Philanthropy Capital, which helps to connect donors to charities and to analyse their performance, says that few charities are really professional about proving their worth. He has suggested that charities should answer the same challenging questions that the Treasury routinely asks of departments in the Comprehensive Spending Review (why should we fund this? Who else could do it? And so on). But his idea has had a decidedly lukewarm response from the sector.

If one good thing could come out of austerity, it would be a better connection of money to the most effective good works. The Government is putting £200 million into a Big Society bank to fund innovative social enterprises. Mr Brookes suggests it spend the same again on an impact fund to tide the best charities over - if they can rigorously prove their worth.

We need to find a way to increase private giving, and to help people to give more time. The increasingly onerous requirements imposed on trustees and school governors, and CRB checks, are barriers that many of us have run up against. That is one of many areas where the State must retreat.

If governments knew best, there would be no need for charities. The State is not good at helping Mrs Jones feel less lonely or sticking with Dan long enough to get him off drugs. We need a voluntary sector, but one that is smarter and slimmer.that will take honesty,not divine intervention. "

The financial crisis that faces many of our organisations will properly turn attention to mergers or alliances. But also, as we grow we will face more scrutiny and ,inevitably , more attacks. It has already started with the nonsense on big nationalised charities.

Acevo has been hosting the Impact Coalition. A grouping of charities who have got together to promote transparency. It is an important coalition and one that needs to be strengthened. Acevo is currently looking at how we can do this. We want to see how to provide more resource to promote what we do as the coalition. And we want to het the charities that are involved in the coalition to give it more support.

I'm on my way to Leicester to speak at a major conference for the voluntary and community sector in Leicester. I shall be arguing that to take advantage of the new rights in the localism bill and the new opportunities for public service delivery we must be fit for purpose. This is not the time for pity but for action.