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The government is over-counting social enterprises

I was interested to read about Charles Leadbeater, speaking at the International Year of the Co-operatives, indicating that too much time was perhaps being spent trying to make the social enterprise/co-operative movement the next big third sector thing. He said: “I think social enterprise is not supposed to be that big. I think it is supposed to have huge influence on the other sectors.”

Euro-directive is a big opportunity for social service charities

The words ‘European directive’ are usually enough to make all but the most dedicated policy observer yawn and fall asleep. While most of us were busy preparing for Christmas, though, the European Commission published something different which should make us sit up and take notice. The public procurement reform proposals have the potential to create a defining moment in the sector’s role in public service delivery.

The Big Society spin on the New Year’s Honours

If the turn of the year is a signal of aspirations for the next, then we are left in no doubt that the enthusiasm for voluntarism and community action running through David Cameron’s government is here to stay.

An honours list, being a medley of awards to establishment stalwarts, unsung heroes, industry figures, creatives and performers, requires a fair amount of analysis to determine whether there are any trends in the group of people who receive them. In the government’s own words, “the vast majority of people recognised include those supporting the Big Society by making a real difference to their local community through volunteering, fundraising, social action and philanthropy”.

There is indeed plenty of evidence that people who have made the grade through charities and voluntary work have been blessed appropriately. Save the occasional dinner lady or former Blue Peter presenter, a great many public servants, including medical professionals, teachers, military figures and members of the Royal Household are also on the list. Whether the Cabinet Office had in mind Ronnie Corbett as a poster boy for the Big Society cause or not  (he was awarded a CBE for ‘services to entertainment and charity’) may be a source of gentle amusement. But it is difficult to see whether the 2012 New Years’ Honours list looks that different from any previous roll-call. The Big Society spin on this year’s awards, interpreted to varying degrees in the mainstream media, may just be yet another convenient re-badging of the initiative. After all, few governments of recent times have failed to recognise the efforts of those in the charitable and voluntary sectors, whether they are leaders or lesser-known foot soldiers of ‘good’ causes.

Another relaunch may well be in vain, undermined by the apparent disorganisation and lack of co-ordination within government. Despite the calls for a Big Society minister, there is apparently no need for one, or an advocating department other than 10 Downing Street itself, so we may as well accept that the awarding of honours is just as political in its intention than any other action of this government. Increasingly, the question must be asked: what is the overall vision at the heart of government for this policy, other than that personally restated by the Prime Minister? Aside from the work undertaken by third sector bodies to interpret the vision in practice, the three page document on the Cabinet Office website detailing government policies that support the Big Society remains the only tangible written evidence of a Big Society policy. Everything else seems to be in the Prime Minister’s head.

If that is the case, then fine. We may never be presented with anything more than a rather anonymous looking PDF. The coming year looks set to witness a further realignment of politics anyway – a strengthened Conservative party buoyed by a newly confident relationship (or not, as the case may be) with the European Union, and an even weaker Ed Miliband. Meanwhile, Labour’s ‘good society’ response has struggled past the conceptual stage, with only vague talk of mutuals and co-operatives bandied around, yet to become a part of Miliband’s broader response to the political status quo.

The real test of the Big Society in 2012 will be Olympic and Paralympic Games in London, giving the voluntary sector enormous strength as it literally delivers the games on a world stage. Volunteers will support many of the activities which will be integral to the Games’ success, in many cases for two week periods at a time. Whether the government can make sufficient political capital out of it is another question, but the Games will, in any case, provide a once-in-a-lifetime opportunity to prove that the Big Society can exist on an even bigger scale that it does already.

Paul Prentice is a freelance political journalist and worked for seven years as a communications professional in the voluntary and public sectors.

Is payment by results compatible with the big society?

Small, local charities –  lynchpins of the big society –  could lose lifelines of funding under the government’s payment-by-results plans for solving social problems.

The government wants organisations that work to attain social outcomes, such as reducing re-offending, getting the unemployed into work or delivering recovery from drug addiction, to be paid according to the results they achieve. But if there is enough money to be made from payment-by-results contracts, large companies will sweep the board and many charities could be left without funding.

It’s not going to be David Cameron’s vision of the big society. The big society is based on the idea of small and beautiful local organisations, with people understanding each other within their communities. That’s not what we’re talking about here. We might be moving into an era where small and local really doesn’t work any longer.

Charities will need large amounts of capital to deliver services, before they are paid by the government according to the results they achieve. But charities, especially small local ones, do not have large war chests and face losing bids for contracts, and thus seeing their funding dry up.

In a pilot payment-by-results contract, returns to investors will be based on reductions in re-offending rates among prisoners leaving Peterborough Prison, achieved thorough the work of the St Giles Trust and others. To carry out the work, the charity raised money from charitable foundations and social investors. But if payment-by-results contracts prove profitable, companies with large capital bases will see them as attractive. And charities will find it hard to compete.

Small, local charities could see their main source of funding vanish. Larger, national charities will face the choice of  trying to bid against commercial organisations or working with them. The competition to be faced can be seen in the decision to award a community healthcare services contract in Surrey to the company Assura rather than to Central Surrey Health, a local social enterprise.

I believe that, in this context,  the growing number of established social investors, who seek more than a financial return on their investment, will become more and more important to the sector.

The need for investment will throw service provider charities into thinking about new ways of working. Do they find comparable sources of capital to bid or do they enter into joint ventures? Are they investment-ready? Are they culturally ready to work jointly with commercial organisations?

We are working on all of these issues for service providers and social investors. The ingenuity and dynamism of the sector will find successful ways of delivering this for some. But we could be looking at a radically changed sector in a few years from now – and quite possibly one where big capital benefits more than big society.

Philip Kirkpatrick is a partner at law firm Bates Wells & Braithwaite

Free expert advice can take the pain out of IT projects

An effective IT system is a prerequisite for a successful charity merger, but it doesn’t have to be a drain on already limited budgets. Small charities often have fairly rudimentary IT provision on which they may have managed for years. A merger shines a spotlight on the flaws in the system and also generates new technological requirements for data integration and customer relationship management.  With a national register of nearly 8,000 volunteer specialists with time to donate, often in between professional contracts, our IT4Communities programme has been helping voluntary and community organisations resolve their IT challenges for nearly a decade.

Last financial year the Charity Commission reported a 150 per cent rise in the number of merger cases in which it has been directly involved – a result of falling donations and investment income.  Our experience reflects the same trend, with a 300 per cent increase in the amount of merger-related work in which our volunteers have been involved.

Merging is a complicated and drawn out process requiring the resolution of multiple issues before ‘union’ can take place.  There are legal, structural, financial and cultural considerations and while the overall goal may be to save money, there can be considerable expense associated with the journey.

When the disability rights charities Disability Alliance (DA), the National Centre for Independent Living (NCIL) and the Royal Association for Disability Rights (RADAR) decided to amalgamate to form the Disability Rights Partnership, cost saving and efficiency were two of the most keenly anticipated benefits.

By merging management, assets, operations and services, the potential economies of scale were huge, but when it came to IT, a totally new modus operandi was a must.

The overarching need to be prudent with restricted finance – while also ensuring that equipment is fit for purpose, future-proof and good value for money – is an intimidating prospect at an already difficult time.  Without an impartial and expert eye on the situation, charities can often flounder.  Mistakes made at this stage can be expensive and obstructive at a time when efficiency and speed are critical.

We ‘matched’ the emerging Disability Rights Partnership with Faye Heatley, an expert in interim project management with over 15 years experience as well as the in-depth technical knowledge required.  Her unique skill set has proven invaluable to the charity and has informed the integration process in unprecedented ways, which has delighted her ‘client’.  In the two months she has already given pro bono, she has audited the existing IT infrastructure, run focus groups to identify departmental priorities, set up trials of new equipments and even helped put together funding bids to finance the investment.

Our volunteers often go on to form lasting relationships with the charities they have supported that extend way beyond their initial involvement.  Some have joined the board and others have even been offered permanent jobs.

Anne Stafford is the programme manager of IT4Communities, an initiative run by AbilityNet, which adapts technology for disabled people

How technology has changed charities in the last decade

Coming to the charity sector from private industry requires some adjustment.  When I joined Charity Technology Trust at the beginning of this year from an IT firm, I was already aware that there are many charities – particularly small ones – which were still being hampered by a creaky old IT infrastructure.  As small charities are habitually constrained by a lack of time, funds and often a deep enough understanding of the potential of IT, this is a common problem.

At the same time, in some areas such as communications and fundraising, the sector has been an enthusiastic and highly effective adopter of new technology. Ten years ago, the majority of charities were still contacting their supporters by post and receiving almost all small donations in the form of cash or cheques.  Mailings were slow and expensive because of print, paper and postage costs. They also had a very low success rate – even the most willing donor had to make an effort to return their donation to the charity.  Sponsorship drives seldom delivered more than a percentage of the pledges made because it was always such a hassle to collect the money.  The same was true of raffle tickets.

One of CTT’s earliest offerings was a software package which allowed charities to manage their mailing lists and contact supporters via email.  This simple piece of software resulted in huge cost savings for our customers, and the uptake was swift.  Before long there were more low-cost commercial solutions on the market, and all of us are now used to receiving email shots from the charities we support.

For me, online payment has to be the other single most important technological development for the third sector.  Not only for the now ubiquitous sponsorship sites, from JustGiving to Everyday Heroes, but also in the transformation of many other traditional fundraising activities.  Raffles can be conducted online, “virtual” badges can be attached to Facebook and Twitter accounts, and even auctions can take place virtually. Bucket-shaking on behalf of the RNLI or the Poppy Appeal attracts our attention partly because we now see so little of it.

Just as the major supermarkets of the world led the IT revolution that has brought debit and credit cards to corner shops, so the giants in the charity world are leading the way for their smaller cousins.  As Oxfam sets up its online vintage clothing store, even the smallest charity can now send out an email newsletter easily, and all of us can direct our friends to a website – possibly our own personalised website – to sponsor us online.  The challenge for the next decade is for those of us in IT to make sure that charities are aware of what’s out there and how they can put it to good use so that we can give the commercial world a run for its money.

Richard Craig is CEO of the Charity Technology Trust

Social value, rather than price, could influence future commissioning

If you work in a charity or a social enterprise, the chances are you might not have paid much attention to the Public Services (Social Value) Bill, which has just cleared its Commons stages and is about to be considered by the House of Lords. However, if you work with, or deliver, public services then the chances are that the Bill may come to have a very real impact on the work your organisation does for decades to come.

The bill aims to reform the commissioning process by asking public sector bodies to consider how they can improve the social, economic and environmental well-being of their areas through public sector contracts. By making people aware of the advantages of using services that offer a greater social value, we can achieve more sustainable, innovative and efficient public services.

The Transition Institute (TI) is starting to unpick the issues and complexities involved in this reform of public services and has launched its first publication, ‘Social Value Ethos’, on this subject.

This publication details how an emerging group of public sector entrepreneurs have responded to the pressures on public services by spinning their service out of the public sector, creating what we have termed a social value ethos that has been ingrained into the fabric of the emerging organisation.

Of course many charities and social enterprises have the elements of a social value ethos already hard-wired in them, and many already deliver public services. However, what the shift towards social value commissioning may offer third sector organisations is an opportunity to see this ethos become a very real competitive advantage over large private sector organisations who often have the capital and scale to successfully bid for public sector contracts.

The changes in the bill, should they come into full force, will have a profound impact on the commissioning and procurement of public services in the decades ahead. It will shift the focus from the bottom-line price or cost of a service towards the overall value of the outcomes delivered.

This will also include the value of the process of achieving the desired outcomes – in other words, the awarding of public service contracts will no longer simply focus on whether you deliver the required results, but will also take into account how you get there.

As a result, the approach, social impact and ethos of an organisation will become crucial aspects of public service commissioning and procurement.

For charities and social enterprises looking to deliver public services either locally or nationally, the shift to social value commissioning could therefore mean that the deep added value that comes with our work is finally taken into account by the people who buy things on behalf of government.

A chink of light on a long, dimly lit road perhaps, but a real chink none the less.

Dom Potter is director of the Transition Institute

The case for early action has been well made

It seems that almost every charity makes the savings case these days – invest a modest sum in education/resettlement/ youth work and save much more. It reads well, but who believes it?

The Prime Minister didn’t raise many hopes at the parliamentary liaison committee last week when he said: “If you say to the Treasury, ‘I’ve got a great plan to spend some money that will save money down the line’ they will say ‘we have heard that one before and we have seen you coming.’”

Those of us who do believe that investing wisely and early in social wellbeing does save money, promote prosperity, reduce debt, increase growth, encourage fairness and social mobility, and ultimately build a sustainable society have a big job on our hands arguing not just agency by agency and issue by issue but banging the drum for a system-wide transition from acute services to community building and earlier action.

It may be true that the business case evidence for specific interventions is of variable quality, but it is perverse to argue that the high level economic argument for earlier action across the board has not been well made, not just by the third sector but in numerous government reviews and by other independent authorities.

Take this observation, for instance, from a 2009 Audit Commission report: “A young person who starts showing behavioural problems at age five, and is dealt with through the criminal justice system will cost the taxpayer around £207,000 by the age of 16. Alternative interventions to support changes in behaviour would cost about £47,000. Over £113 million a year would be saved if just one in ten young offenders was diverted towards effective support.”

Or this from the Finance Committee of the Scottish Parliament in January of this year: “The current, reactive approach to public spending is unsustainable. There must be a shift away from reacting to crises to a greater focus on prevention and early intervention.”

The Early Action Task Force, whose first report is being published today, proposes a transition planning approach for the incremental transfer of resources from acute services to earlier action and suggests some of the mechanisms necessary for achieving this transformation.

To those who say that steady, incremental targets won’t achieve anything, we say look back at those numerous government reports and look again at Tony Blair’s first speech as Prime Minister in which he warned of the “double jeopardy – worsening social problems and escalating tax bills.”   If Blair had gone one step further and committed to shifting spending gradually away from late towards early action – even by just 2 per cent each year – the UK would look very different today. We know earlier action makes sense, socially and economically. Are we really not committing because we fear that we can’t commit enough?

Government leadership on this agenda is essential but insufficient. The task force argues also for the adoption of transition planning across the third sector, with funders and funded challenging us to consider the optimum point for any given intervention and to ask of every service, “is this at the right time, and if not, how might we engage one step sooner?”

Committing to driving the transition in this way will demonstrate the validity of those numerous assertions and our faith in the rhetoric. Early action yields a triple dividend – thriving lives, costing less, contributing more. Now more than ever we must resist the deniers and promote the case for systemic transition. They may have seen us coming but they ain’t seen nothing yet!

David Robinson is co-founder of Community Links. To find out more about Early Action and download the report, visit www.community-links.org/earlyactionnote

Does the third sector understand search?

Over the last 15 years the media and communications landscape has been subject to a revolution. Access to cheaper and faster broadband, mobile devices and memory have built an almost limitless commodity and introduced some fundamental questions about how campaigns communicate with a newly empowered audience.

Search has been at the heart of that revolution. Google receives almost as many searches every day as there are people on the planet; its YouTube platform receives 48 hours of uploaded content every minute. Google has become a truly phenomenal business by organising the world’s information and making it universally accessible and useful (it just so happens that’s also their mission statement). Put simply, Google really has changed the world: data, speed and relevance are now the pillars of twenty-first century publishing.

For those of us in the voluntary and not-for-profit sectors, then, the question is: do we understand that remarkable influence as well as we should, and do we know how to use it to help us meet our objectives?

To get to grips with that question, we should begin to think of search asmarketing. Targeting specific search queries to specific adverts, with the hope of sending users to a certain web page can be a hugely valuable strategy for a small NGO in particular. Users are not necessarily searching for any given brand; instead, they may be searching for people, issues, information or even imagesconnected to a specific area of work, or they may stumble across a site by accident.

Given that, it is important for campaigners to ask whether they have the right internal digital framework in place to track how and why new users arrive to a particular website, which content users are engaging with and which is less successful, and even how Google and other search engines understand the nature and opportunities of the campaign.

In most cases, third sector organisations still have some way to go with this task, and in placing the web at the heart of all their communications and marketing and integrating it through every aspect of what they do. Although there are of course exceptions, within the sector as a whole there are too many poorly designed websites. Content can be structured poorly. And many sites have too few updates, with not enough creative content.

So it’s important for campaigns to reflect.As always, content is king. Organisations should study how often new content is published; how often Google “crawls” a site in order to update its index; and the variety of content and social media on offer, including video.

Finally, it’s important to understand how many people link to a particular page, and to nurture those important relationships over time. Inbound links are the most crucial element to search; each inbound link should be seen as a vote of influence – the more links a website can harvest, the more influential it becomes.

There is no single strategy for building the most searchable website or campaign. But as funding streams narrow and budgets shrink, third sector organisations should grasp the opportunity to improve how they communicate online, and how they provide smart content and conversations relevant to their audiences – and that means creating an inviting home which people arrive at organically, through search.

Scott Williams is a consultant at Champollion Digital

Breaking a promise – does the public benefit?

Since
leaving the Charity Commission and NCVO respectively, and having been submerged
by the public benefit debate over the past few years, it’s been a pleasant
change not to have it at the forefront of our thinking. In fact, we’d made ourselves a promise
not to mention it.

We
know that, for most charities, demonstrating public benefit is just something
they do and it’s pretty much second nature for them. The furore stoked up by the Independent Schools Council’s
referral to the Tribunal has pretty much passed these charities by. They’ve simply been getting on with
their day job.

But
now the dust is beginning to settle on the public benefit judgement, and some
wider issues are emerging. First,
the judgement itself is bound to lead to further challenges. For all those commentators who have
claimed it as a ‘victory’ for the independent schools, there will be lawyers
offering pro-bono advice to the parents of school children at state schools to
challenge whether their local prep or independent school is providing more than
a ‘tokenistic’ public benefit to those unable to afford the fees. Expect the Commission to be kept busy
on that front. Expect the person
appointed to carry out the review of the 2006 Charities Act to be lobbied hard
as well. Expect some headaches for
politicians.

However,
leaving that political hot potato aside, a broader notion of public benefit is
becoming more
common currency. For example, in
recent days the Health Minister Earl Howe has said he is considering
amending the NHS Bill to require Foundation Trusts to publish details of how
their non-NHS earnings benefit NHS patients. (And NHS Foundation Trusts are already described as public benefit
corporations.) ‘Public benefit’ also
helped the university tuition fees legislation, with universities charging more
than £6,000 now required to undertake measures to encourage students
from poorer backgrounds to apply.

And,
at a time when companies are polishing their social responsibility credentials and
social enterprises are fashionable, charities should proclaim their public
benefit more than ever. After all,
public benefit is what makes charities special; it is why they deserve the
support they get, from the public and the state. Tax relief to charities in the
form of Gift Aid, rate relief, VAT and stamp duty relief was worth £2.56bn to
the sector in 2010/11. There’s a lot
of public benefit in that.

Belinda Pratten, formerly head of policy at NCVO, and Rosie Chapman, formerly director of policy and effectiveness at the Charity
Commission, are independent charity advisors
and co-founders of Belinda Pratten and Rosie Chapman Associates