Speaker's House Speech

Securing financial stability in uncertain times

Speech by Peta Wilkinson (Enham, Chief Executive)

Speaker’s House: 14th June 2011

As the chill wind of Government spending cuts sweep our sector we need to turn our attention to thinking, acting and behaving in very different ways whilst maintaining the integrity of our mission, values and aims.

Many of the organisations represented today are from the Third Sector and are facing significant cuts in funding.  It is worth noting the charity think tank New Philanthropy Capital recently estimated voluntary sector income from state sources could shrink from anywhere between £3bn to £5bn and that nearly a quarter of all charities get cash from the government, with 13% relying on state funding for more than half of their income.  Such changes in income streams will inevitably have an impact upon our organisations.

The theme of my talk is linked to diversification of funding streams and I want to discuss three key areas with you today, the first focuses on Philanthropy and fundraising, the next on shared services and collaborative working and the last on service and organisational re-design.

The Giving White Paper, recently published by the Government echoes many of the philanthropic ideals many of the charities here today are founded upon.  Many people express their beliefs and values through the giving of not only money but also their time.  We must continue to harness this philanthropic giving in different and more creative ways, so we can ensure services continue to grow and improve, whilst keeping costs down.

It is clear that in times when our cash reserves are stretched, we must ensure we influence policy and legislation in relation to tax and giving to incentivise donors and maximise income and benefits from every donation. We need to lobby for schemes such as lifetime legacies and opportunities to benefit from assets during people’s lifetimes. Giving in this way provides tax benefits to the donors and affords charities opportunities to plan and project their income streams into the future. 

We also need to learn from the so called philanthrocapitalists, who are prepared to take an approach of venture philanthropy to ensure maximum leverage is gained from donor’s money.  In other words, we must make not only every penny count, but every penny count for even more than it used to.  We must also be prepared, at times, to be bold and take calculated risks, so we invest in our organisation’s futures.

We also need to work with local partners and employers to develop a culture of giving amongst their employees, time as well as money so that Charities can do more within their existing resources. Employers should be encouraged to offer matched schemes via payroll services where it has been demonstrated that uptake is far higher than the average UK giving figures. ‘Time well spent’ and ‘money well spent’.

Fundraising strategies need to connect better with people and their individual and collective motivation, and be reflective of modern day life.   Rattling tins is not enough, methods need to be more engaging for the giver and generate more income for the charity.  The use of modern technology, such as giving via mobile phones and the use of ‘apps’ are more likely to engage with younger people than more traditional methods.

So to collaboration and sharing….

There third sector provides a wealth of experience and capacity, but underutilises its collective capability. Each organisation has its own infra-structural and support services often with small teams of people struggling to meet the demands of statutory processes.

Local charities in the Andover area have recently started to look at how we might share these services and reduce the costs of provision. Services such as HR, Finance, payroll, estates and facilities management and IT do not need to be replicated in each organisation.  It does not take a rocket scientist to work out that economies of scale can be found by merging these core functions between organisations.  Clearly, this can only be managed as a contracted service, with the appropriate legal safeguards.  However, a large degree of trust (notwithstanding confidentiality) between the charities is required, with the central resource charity acting in a highly ethical manner, ensuring no data or information gathered through the use of these merged functions is abused.

There are also huge opportunities for working together in Consortium arrangements to broaden and strengthen service offerings and create economies of scale. However, commissioners need to review tender obligations and evaluation criteria to ensure that the voluntary sector is engaged on a level playing field. Issues such as TUPE and Pension obligations need to be reviewed as does the need for historical financial information in the case of new ventures.

There also needs to be a sense of partnership between commissioners and providers such that new services can be piloted and explored with risk sharing arrangements. These challenging times do provide a platform for transformational change with new and innovative service models that will require flexible arrangements and configurations.

Commissioning for outcomes requires commissioners and providers to think about how they work across boundaries to ensure that services meet client needs and are easily accessible. Within and between organisations commissioners need to work collaboratively to define where consortia and strategic alliances and partnerships can add value to people’s health and wellbeing and its broader determinants. For example the outcome of a social care intervention may ultimately be measured in NHS via reduced attendance at A & E and vice versa. This will require new contractual vehicles and a revised attitude to performance management and measurement. Partnerships with the voluntary sector to develop these would ensure that service and commissioning outcomes were better aligned. Making more of our collective strengths will help to deliver change and more cohesive service delivery.

Moving on to my third theme, responding to the Big Society and the personalisation agenda requires significant service and organisational re-design which Enham is working with at the moment. Responding to the personalisation agenda requires us to rethink every aspect of our organisation and service provision and forces us to think about the way we think and act in the delivery of support to our clients.

Charities have traditionally, like many organisations, developed around contract acquisition or merger with other organisations and hence service delivery has been somewhat siloed in its approach and has not taken advantage of synergies across and between all areas of operation. People have clung on to the notion of professional practice imbuing it with a degree of concreteness that it does not possess. Please do not misunderstand me, I am not advocating for a dumbing down of quality or of the need to have the right people delivering the right services at the right time, but I am pushing for flexible use of roles and appropriate training so that people are empowered to increase their skills and provide greater support to clients wherever they operate in the organisation.

We are also like many other charities looking at the role of volunteers in front line service delivery such that capacity and quality can be maintained and increased for limited additional cost. Whilst this is often the only way of delivering contracts in these exacting times, it is also a way of generating community spirit and engagement and can often produce synergies with fundraising. Clearly, this is not without its complications, but matching volunteers closely with their motivational goals and clients needs reduces threat to service delivery through too frequent churn or inability to maintain commitment. Flexible role descriptors also mean that volunteers and staff can be used flexibly across a number of areas to ensure service delivery can be maintained.

We all too often forget the role of clients as advocates, service deliverers and social entrepreneurs. At Enham we are working on the development of a customer service centre which starts the care planning process which is staffed by clients and volunteers and coordinates both information and service planning for clients and commissioners alike. This reduces duplication and develops client’s skills and independence which is a key plank of delivering our vision mission and aims. It also plays well with prospective customers as the value of hearing clients’ views of their experience of the charity has credibility for people and chimes with the key aims of empowerment and releasing potential.

Finally organisational structure needs to reflect new ways of working and flexibility and hence needs to be flat, matrixed and based on networks of people engaged in collaborative activity with clients. Organisations must have clarity of purpose and communication and be outward facing in their focus on re-design to maximise quality, impact and value for money.

In conclusion, if I were to leave you with just one message, I would suggest concentrating on managing income, costs, quality and risk, but not losing sight of innovation, hence, always looking to the future. You need to consider dropping or deferring activities with relatively low social return (which is easier to say than it is to do), but consider growing activities with a high social return to cost ratio. By taking advantage of opportunities created by the recession you’ll be focused on growth rather than rebuilding what you had last year!

Thank you.