Business isn’t a swear word

As a newly appointed chief executive in the third sector, I am struck by the frequency with which I am having the discussion about the reluctance of charities to identify themselves as businesses and adopt more businesslike attitudes to service delivery. In some areas the very mention of the word ‘business’ is tantamount to swearing.

Do charities really believe that their – in many cases long – history of doing good works will protect them from funding cuts, shifts in commissioning intentions, and the competitive market place? Will some charities really continue to hide behind a lack of data and inefficient resource management, shored up by good intentions and a mountain of thank-you cards in the hope that commissioners will continue to fund them? I’m pleased to say I have also spoken to many who aren’t. Charities are special because they value and advocate for the individual or group and those close to them. This is our strength, and it is the polar opposite to the statutory sector which say it values the individual but then swamp that intention with bureaucracy and process. However, if we directly provide services to the public, as many charities do, we cannot afford to merely pay lip service to the paperwork, have flaky systems and expect commissioners and funders to accept that we provide a good service just because we say we do. The skill is in striking the balance between the two, having a charity heart and a business head.

Basic business practices are a must: agreed vision and mission statements, sound financial planning and management, robust human resource management, health and safety, risk management, and audit processes. “We do all that,” I hear you say. But what about defining your services – stating clearly what you do and do not do; demonstrating measurable outcomes; understanding the real costs of your services (how much does that home visit cost?); being able to make a business case for funds; being able to respond to a tender situation; deciding who your potential partners and competitors are and having a strategy to address these?

If you are still saying “we do that”, then I hate to say it but you are running a business. Well done you, for proving that running a charity does not mean you cannot run a business.

Doing this does not mean you devalue the excellent work done by the charity, its history, the incredibly dedicated staff, the band of volunteers, and the stalwart fundraisers. Actually, by taking a more business-like approach you are protecting the charity, ensuring it is fit for purpose and will survive in the rapidly changing world in which we find ourselves delivering health and social care, which in many areas is care not provided by statutory agencies, and can ill afford to be lost.

Third sector does not mean third class, and as charities we should not inadvertently add weight to any belief that we are somehow less serious about providing a service by having anti-business attitudes to what we provide and how we provide it. There is competition for all of us, even hospices with 125 years under their belts, and the ‘vultures’ of statutory and private business (and dare I say your friendly charity around the corner) are circling. If you are not ready to meet the emerging and potentially competitive environment head on you run the risk of seeing your charity reduce or fall.

To keep the charity heart and develop the business head takes leadership of the highest standard, and an organisational culture which allows everyone in the charity to understand and hopefully sign up to striking the balance.

Dallas Pounds is chief executive of Trinity Hospice