Five trends that matter for foundations: NCVO's civil society almanac

This blog was first published on the Association for Charitable Foundations' website here on 11 May 2017.

Hello – let me start with an introduction. It’s a pleasure to join ACF as Interim Head of Policy, following in the footsteps of the excellent Richard Jenkins who has moved on to work with the Tudor Trust. I look forward to meeting ACF members in the months ahead.

I had an unusual first day on the job yesterday: rejoining my former colleagues at NCVO for the launch of their 2017 Civil Society Almanac. Their flagship publication provides an overview of the voluntary sector’s shape, size and financial trends. Whereas ACF’s Giving Trends report looks through the lens of foundations and their giving, the Almanac looks from the receiving end, by using charities’ accounts data. This means it can help set foundations’ giving in context, enabling them to consider grant-making trends alongside other financial trends.

Here are five trends that were highlighted at the Almanac’s launch that I think particularly matter for foundations.

1. Local cuts

The starkest message was a familiar one: the impact of local government funding cuts have continued to fall hardest on small and medium-sized charities. They have also fallen on particular types of charities: employment and training, social welfare and infrastructure organisations.

Falling grant funding is a long term trend, but the government’s approach to contracting has exacerbated the problem. These contracts are hard to win in the first place and often only cover the bare bones of service delivery.  There is little sign of this changing in the immediate future.

chartweet gingerbread contracts.jpg

2. Earned income continues to rise

One of the more encouraging signs is that many charities are generating more earned income. This won’t suit all organisations (particularly the smallest), but where they can, charging for their services or selling additional products and services can help to subsidise charities’ missions.

As with the first trend, foundations may like to consider their response. With the value of foundation grants now exceeding those of government, their funding approaches can make a big difference. For example, where appropriate, foundations can help to improve charities’ sustainability, and manoeuvrability, by providing core funding.

NCVO Almanac 2017 - earned income graph

3. Brexit bump – but what next?

Giles Neville, head of charities at Cazenove Capital, spoke briefly at the launch as sponsor of the Almanac. He highlighted the recent boom in investment asset values, following the EU referendum. This is likely to see many foundations’ resources increase in the short term. However, the longer term outlook post-Brexit is far more uncertain, with the possibility of a downturn.

Many foundation trustees will want to consider how any short-term gains can be used to best effect in light of potential future scenarios.

4. Geography matters

While the Almanac is brilliant at describing headline trends, one of the pitfalls of using national level datasets is that they rarely do justice to local variations. In a recent report that I wrote with Lloyds Bank Foundation, for example, we highlighted the fact that ‘the economic recovery’ had barely been seen outside London and the South East.

Community foundations and others with a local focus will be better placed to assess all of these trends in light of their local context. They will also want to consider potential future variations – if public funding falls further, it will affect areas with a heavier reliance on public funding and higher public sector employment; if EU funds are withdrawn, it will have greatest effect in areas that currently benefit from those funds – Wales, the North East and South West. If the challenges are therefore about who decides where and how funding is delivered, might foundations have a role to play in making the case for equitable settlements on behalf of their beneficiaries, or supporting them to make the case themselves?

5. More data = better insights = better decisions

Finally, Rachel Rank of 360Giving spoke about the possibilities if more datasets were opened up.

The new “Grant Nav” platform (which uses 360Giving data) already enables searching by area, topic or other keywords – but it is only as useful as the underlying data. The more foundations and public bodies that release their data, the more comprehensive its coverage will be. This could lead to much richer insights that get beneath the headline statistics, as important as these are, to help foundations and other charities in the difficult decisions they need to make.

Rachel and her team would be glad to hear from any ACF members that are interested in exploring this further:

Slide from 360 Giving presentation at the NCVO Almanac launch

Slide from 360 Giving presentation at the NCVO Almanac launch

5 things charities can and can't do at general election 2017

This article was published in Civil Society magazine on 19 April 2017

With a general election now scheduled for 8 June, many charities will be wondering how they can engage with the public and politicians to raise awareness of their work and the issues that matter to them. Charities can play an important role during elections, helping to facilitate and inform public debates, and they should feel confident in doing this, as long as they heed relevant guidance.  

Importantly, in this general election period, special guidance from the Charity Commission applies. It can be found here. While many charities say they have felt deterred from campaigning in recent years, this guidance is actually fairly enabling. It should not unduly hinder charities campaigning in a responsible and non-partisan way. 

For example, five things that charities can do, are:

  1. Continue campaigning on issues
  2. Reach out to the candidates and ask their views on issues 
  3. Publish candidates' views on issues
  4. Host a debate between candidates or invite them to issue-focussed events
  5. Publish a manifesto or briefing materials on issues

Charities should follow the Charity Commission guidance above and note its advice about how to go about these activities. For example, inviting candidates from across the political spectrum to events. 

Where charities are spending a significant amount (over £20,000 in England) campaigning around the election, they should also look into the registration requirements of the Lobbying Act – but this is unlikely to affect most charities.

There are of course some restrictions, but these should be common sense. Charities serve a diverse public and rely on upholding public trust to undertake their work. A key point in the guidance is that charities “must leave it to the electorate to make their own decisions about how to vote”.

Therefore, four things charities can't do are:

  1. Advocate for any individual party or candidate
  2. Explicitly compare the organisation’s views to those of individual parties or candidates
  3. Donate funds to any individual party or candidate
  4. Allow their organisation to be cited in a candidate’s manifesto

Finally, the guidance acknowledges that sometimes staff within charities will wish to be involved in party political activities in their individual capacity, including as candidates. Where this is the case, it should be declared and the charity should consider how best to manage a potential conflict of interest.

Important opportunity to shape debate

A case report from the Charity Commission on issues that arose in the run-up to the 2015 general election gives some further useful pointers. Charities should be mindful of their social media presence and posters or materials on their premises, for example. Overall though, only a small number of complaints were made, and most breaches were inadvertent and easily resolved. 

Charities should, therefore, feel they can continue campaigning with confidence. The last year has yielded many lessons for politicians and campaigners. Among them, the importance of listening to communities, promoting open and honest debate, and carefully assessing evidence. In all of these respects and others, charities have much to add.

The general election 2017 is an important opportunity to help inform the debate about the future of the country, I hope charities will take it. 

Seven steps for sustaining #smallbutvital charities

For press coverage of this report - see Civil Society and Third Sector magazine

I recently had the pleasure of launching Facing Forward: How small and medium-sized charities can adapt to survive, a new report commissioned by the Lloyds Bank Foundation.

Written as a practical, accessible resource to help pressurised, time-poor CEOs or trustees of small charities plan for the future, it’s the culmination of several months of conversations with small charities and an in-depth understanding of the issues they face.

It feels timely to be focussing on sustainability, given there are so many uncertainties about the future. For me, sustainability doesn’t simply mean sustaining funding levels, it’s about sustaining our mission and the personal and collective energy the small charity sector brings to the table.

What really struck me through the conversations I had with small charity CEOs is the often-hidden toll that funding challenges are taking. Although in some cases charities’ income may have held up, it is not uncommon to hear that their workload has doubled, that they no longer have any say in service design, or that staff are working many unpaid hours.

Despite these challenging times, small charity leaders are among the most inspirational, caring and dedicated people you will ever meet. At the launch, Michelle Hill and Sarah Mitchell, Chief Executives of TLC: Talk, Listen, Change and Carers Network respectively, shared detail of the very real challenges they’re facing on the frontline.

For government and funders grappling with the social challenges of our time, these ought to be exactly the kind of people they put resources behind, those who are making a big difference with only a small amount of support.

Of course, charities need to adapt and Facing Forward was written for you. It starts by drawing together analysis of external research and sets out ten trends that are likely to shape the future. But offers much more.

So here are the seven practical steps we’ve set out to support charity leaders – both CEOs and trustees – plan for the turbulent times ahead:

1. Understanding sustainability

It’s natural that charities think firstly about sustaining their own services, but sustaining outcomes for your beneficiaries might sometimes mean considering a different path: campaigning, merger, or even closure. Everyone involved in your charity will have their own perspective on this, but it’s ultimately for trustees to decide its future.

2. Make time for planning

A major Charity Commission review of charities in financial difficulty found planning ahead – including with staff and trustees – was the critical factor in charities’ survival. Too often, charities leave it too late and only seek help at the point they’ve run out of viable options.

3. Assess your strengths, weaknesses, opportunities and threats

Taking an honest look at your organisation (why are we here, what can we offer that others can’t?) will lay the groundwork for your plans. This can involve a simple SWOT analysis or you could use one of the free diagnostic tools highlighted in the report.

4. Match income to activities

Ask most small charities and they prefer grant funding (ideally core funding). But with grants in short supply, a good starting point is to segment your organisation’s activities using NCVO’s Money/Mission Matrix. This will prompt you to consider which activities could potentially generate income in future and which truly require ongoing subsidy.

5. Exploring income options

Armed with your self-assessment, you could then look to learn from other’s experiences of making different income streams successful. For example, how to get started with digital fundraising, or how to negotiate contracts. The report contains advice and links to resources that could help when exploring new income options.

6. Digital capability

The future is here, the future is digital. Charities cannot afford to overlook the rapid pace of technological change and its implications for their clients and their own services. Start by looking at 12 digital questions, an excellent resource from Zoe Amar Communications and the Charity Commission.

7. Sustaining ourselves

Back to where I began. Charities depend on the people who lead them. Supporting each other and ourselves is vital to future success; trustees need to be particularly mindful of this when putting more on the plates of already-stretched CEOs. A new book The Happy Healthy Nonprofit has great practical advice for charity leaders and Mind, the mental health charity has also produced guides on wellness at work.

For more tips and resources you can download the full report here.


Campaigning for unpopular causes

This event was also covered by the Guardian here.

I had the privilege of speaking at Cass Business School yesterday, giving the response to a brilliant and insightful lecture by Mark Goldring, Oxfam’s chief executive. 

Mark talked about the campaigning work Oxfam has done since 1942 all the way up to its latest campaign on Yemen. Providing humanitarian assistance is critical, but so is their campaigning work to identify and address the causes of poverty, which isn’t always as popular. Mark reminded us of the South American bishop who said that “When I give food to the poor, they call me a saint; when I ask why they’re poor, they call me a communist.”

Most refreshingly, Mark highlighted examples where they’d not got it right. In my experience, it is rare for voluntary sector leaders to be so candid and it was hugely valuable for us all as a learning opportunity. The whole sector would benefit from more of this (quick plug therefore for the rest of Cass’s “charity talks” series).

In my response, I drew out some of the lessons from Mark’s talk and my experiences working within government and campaigning from outside it. The key points were:

·       Spotting ‘policy windows’ by staying close to the action and building relationships with key players

·       Analysing messy systems – who holds power, what legitimises them, where does the money go, how are instructions transmitted – to assess best intervention points (see Duncan Green's How Change Happens for more on how to do this)

·       Carefully deciding between insider influencing and outsider campaigning strategies

·       Crafting big messages for the public, engaging in the detail when speaking to policymakers

·       Choosing your messengers – giving a platform for those furthest from power wherever possible

·       Finding disarming allies and “safety in numbers” when campaigning on less popular causes

·       (No) Surprises! – creating media hooks but importance of keeping channels of communication open with policymakers

·       All above board – involving trustees, knowing the law but being confident within it

·       The mirror test – acting with integrity, learning from setbacks and successes


The rough road to Brexit

Today’s High Court’s decision is just the latest twist in what is inevitably going to be a long and fraught journey towards Brexit.

In the Court’s judgement, it conclusively stated that the government does not have the power to trigger Article 50, the mechanism to leave the EU, without parliamentary approval. Number 10’s Plan B is to appeal this decision at the Supreme Court – with a hearing pencilled in for 7 & 8 December and a likely verdict in January. But the Prime Minister will undoubtedly also need a Plan C to ensure that a parliamentary vote – if required – upholds the referendum result.

A parliamentary vote can’t be taken for granted. Certain commitments about the UK’s negotiating position or further parliamentary involvement would almost certainly be sought by MPs or Lords. A standoff in parliament over the terms of negotiation could lead to delays, whereas a vote against Brexit would likely trigger a general election to confirm the public’s wishes (Plan D?). The Prime Minister has made much of ‘getting on with the job’, but the Supreme Court could yet place a major parliamentary hurdle on the road to Brexit.

And this is just the beginning. The actual negotiations can’t get underway until Article 50 is triggered. Assuming this does eventually happen, the negotiations will have at least three parallel strands: exiting the EU (which will happen two years after triggering Article 50); securing a long-term trade deal with the EU; and securing an interim trade deal with the EU, if the long-term one will take longer to agree. This is not even to mention securing trade deals elsewhere.

Whether we need an interim deal depends on what we want from the long-term one: changing to Norway-style EEA arrangement may be straightforward, but a new, bespoke sector-by-sector trade arrangement of the type government seems to be suggesting will inevitably take longer. (Think how long it takes to rollout any major government reform – Universal Credit, for example). Without an interim trade deal, the country and the EU could face a messy divorce and an economic cliff edge in 2019. It seems likely that all-out efforts would be made all-round to avert this.

Other critical issues on the horizon include Northern Ireland, ensuring that Brexit arrangements do not disrupt the peace settlement, and whether Scotland initiates a new independence referendum. What happens across the EU more widely (particularly within the Eurozone and on the ongoing refugee crisis), the French and German elections in 2017, and even next week’s US elections, could all change the Brexit roadmap again.

All of this of course gives rise to more uncertainty. Financial uncertainty is predictably affecting the markets first, but businesses and the real economy will be next. Public confidence, which has been buoyant so far, may fall as it becomes clearer how hard it will be to fulfill, and reconcile, differing public expectations.

But visibility should improve as we get further along the road. If the government wins its appeal in the Supreme Court and/or a parliamentary vote, the two-year Article 50 process will get underway. The Autumn Statement on 23 November should give a clearer indication of government spending plans and priorities.

For their part, charities will have to prepare for different eventualities. Some need to prepare for potential direct effects (e.g. EU funding cuts, supporting EU nationals), whereas others will want to prepare for possible indirect effects (e.g. rising inflation, continuing squeeze on NHS and local government budgets). Those charities that can contribute to the public debate on the future of the country should feel empowered to do so. For while the Brexit process itself seems all-consuming at the moment, the real debates about the laws, policies and terms of trade that we want in future have hardly begun.

At a charity conference I spoke at yesterday, local charity leaders reflecting on all of this and what it means for them. They talked about developing their own plan Bs and Cs to maintain services. But they also talked about maintaining public trust by remaining non-partisan, ensuring only accurate information was shared (e.g. signposting where necessary to Citizen’s Advice or other trusted sources), and gathering high-quality evidence. They wanted to offer support and reassurance to staff, volunteers and clients; and some would have opportunities to reach out to their wider communities. Above all, at this stage, the message was to keep checking the road ahead but not get diverted from our own missions.

For more Brexit analysis, I'd recommend NCVO's latest briefing:

How can charities help solve poverty?

This blog was first published in Civil Society on 6.9.16

In his 1904 Memorandum, businessman and philanthropist Joseph Rowntree noted with regret that: ‘The soup kitchen in York never has difficulty in obtaining adequate financial aid, but an enquiry into the extent and causes of poverty would enlist little support’. 

Today, over a century later, the Joseph Rowntree Foundation has completed just such an inquiry and its landmark report is a sobering read. The sheer scale of its ambition – to provide a blueprint for solving poverty in the UK – is daunting. And yet its tone and message is pragmatic: poverty is real, its causes well-understood, its solutions identifiable and actionable. 

Most of the report’s recommendations focus on government and business. This makes sense given the systemic nature of the issues and solutions. Ensuring the social security system works effectively, creating better jobs, and building tens of thousands more homes for affordable rent. There is plenty for the new Prime Minister to consider, particularly in light of her personal commitment to ensuring a post-Brexit Britain works for everyone.

What does the report have to say about the role of charities and civil society?

Civil society organisations are called upon to make solving poverty an explicit goal. Poverty touches so many areas of our lives and community endeavour, it is not hard to imagine the sector mobilising around such a goal.

What more could our organisations each do solve poverty here in the UK? In some cases, it might prompt us to review services, operational or access arrangements; in others, it might be reason to take new risks, develop new services and partnerships. 

Could this also be fertile ground for consensus and collective action? It was of course under the banner of making poverty history that some of the biggest campaigning achievements of the last decade were achieved, relieving developing countries of their debts.

And with much government policy up for grabs post-Brexit, might there be a real opportunity to jointly push for fresh commitments on this issue? JRF certainly hopes others will share their ambition, including foundations and investors whom they will be meeting later this week.

Although the report’s goals are ambitious, the good news is that the actions needed to achieve them are not rocket science. Indeed, much progress has already been made – not least, raising the minimum wage and reducing pensioner poverty.

And many local initiatives are already taking root. In Leeds, JRF has worked with the council to embed ‘good growth’ in their strategic plans, use their purchasing power to create better jobs, and invest in training opportunities for young people.

Elsewhere, ‘Fairness Commissions’ have helped facilitate conversations between people experiencing poverty and those in power and led to change. Looking ahead, devolution offers a hook for renewed strategic conversations and greater investment in early intervention could contribute significantly to public service savings over time. 

Charities can play their part in all of this, not only as campaigners and service providers, but as employers themselves. Many of JRF’s recommendations focus on the quality of jobs on offer.

This is to some extent about pay – asking all employers to pay the Living Wage where they can – but also about increasing access to training and progression opportunities, additional benefits and flexible working where appropriate.

In our sector, this will sometimes necessitate tougher conversations with funders and commissioners about staffing – and thus, contract - costs.

But it is also about setting the right culture within our organisations: having developmental conversations with staff and volunteers at all levels and enabling people to share their skills with each other. Investing in people ought to be a strength in our sector, even in the context of funding pressures.

Finally - though this is by no means an exhaustive list - the JRF report is a useful example in itself of how charities and particularly foundations can engage meaningfully in policy debate.

Without sensationalising or use of hyperbole, the report makes a compelling case for action. It rests on a solid evidence base that has been scrutinised by many researchers and has involved people experiencing poverty during its development. The at-times eye-watering costs of its recommended actions - which charities are often well-advised to shy away from - are here justified by the eye-watering costs of inaction and identification of several credible policy options to help Treasury cover those costs. 

It serves, overall, as a welcome reminder that although charities continue to offer much-needed assistance in the form of soup kitchens or food banks, they can also be powerful advocates of systemic change – as Joseph Rowntree envisaged – when they decide to be and take action accordingly.

What does today's interest rate cut mean for charities?

The Bank of England has announced it is cutting interest rates to 0.25%, increasing quantitative easing (buying bonds to release more cash into the financial system), and extending its Funding for Lending scheme to encourage banks to continue lending to businesses and consumers.

The Bank has taken action because it is anticipating a rapid deceleration in growth. No one used the word recession – but actions speak louder than words and this is a significant package of measures aimed at averting exactly that risk.

For charities, like everyone else, the overall health of the economy matters. It affects their beneficiaries’ wellbeing, their donors’ giving, the money available for public services, their own costs and resources available to fulfil their missions.

The key question is whether the Bank's package does enough to help the economy at this time and what more the government can do - having already ditched its austerity targets – to boost confidence and investment, while Brexit continues to cast a cloud of uncertainty over the country’s future.

For charities, today’s announcements will have other, though smaller, effects:

-          Reduced return on savings. Charities are net savers, so lower interest rates will have some effect on their available resources.

-          Charitable foundations that invest their money are also likely to see lower returns – which could have a knock on effect on the money available to distribute as grants, though some may choose to give out the same or greater amounts anyway if they perceive needs to be rising.

-          Charities that operate overseas are already seeing their buying power significantly reduced, because of falls in sterling. The cut in interest rates is likely to see this trend continue.

-          On the upside, charities that want to expand their services or diversify by investing in property may benefit from falling commercial property prices (thanks to NCVO's @RosJtweets for highlighting this point).

Overall though, it’s still a case of wait and see. The ONS has published a list of its forthcoming releases that will give some greater indications of what’s happening in the economy since the referendum. And the government’s autumn statement will be critical for setting out its revised plans and fiscal measures.