Five things the government could do to really support small charities

30930962770_a68e502cd6_zThe government responded to new research highlighting how ‘broken commissioning threatens the survival of small charities’ with a programme of support to help small and medium charities to successfully bid to deliver public services. Others will have their own views….but suffice to say I was underwhelmed by their approach.

But if incubators and Crown Representatives aren’t the answer, how could the government respond meaningfully and effectively to the challenges faced by vast swathes of the not for profit sector?

Here I suggest five ways the government could offer genuine support to small and medium sized charities:

1. Stop believing that ‘business’ is inherently better than ‘charity’

Charities and not for profits must be entrepreneurial to thrive, but to suggest that aping big business is the way to do this is misguided and damaging. ‘Big Business’ remember brought us delights such as Enron, the global banking crisis, PFI and countless other examples of how not to do things. There are economies of scale that are helpful to achieve, but charity performs a hugely important – and socially distinct – purpose to commercial enterprise. Social enterprises are a hugely important part of the social economy (particularly those that are genuinely enterprising and actually deliver social impact) but not every charity ought to be a social enterprise.

We should not judge charities by the business acumen and financial efficiency – though that’s not to say strong financial management and entrepreneurialism are unimportant. Charity must deliver social benefit. They should be ‘charity-like’.

 

2. Make ‘The Grant Making Tango’ compulsory reading for commissioners and funders

Written in 2004 and as compelling today as it was then. Julia Unwin sets out the need for funders to be clearer about what impact they are seeking from their funds; maintaining activities or services, building organisations or systems change. She also makes the case for different funding styles to support this; giving, shopping and investing.

Too many funders and commissioners are unclear about the approach they are taking and precisely what impact they want to have. Understanding the differences and being clear about intent will inform the way charities (and others) are invited to bid and reduce the amount of time wasted trying to second guess vague specifications and guidelines.

 

3. Start doing more ‘investing’ – let charities find solutions to problems

If commissioners knew best how to solve a particular social challenge then I’d have thought they’d be best placed to deliver that solution or service. The fact is that smaller charities and community groups are experts in their fields. They are often closer to their beneficiaries (many of them run by their beneficiaries – or at the least directed by them) and well equipped to identify the best ways to tackle those challenges. Commissioners are paying for someone better placed then them to deliver the solution. Why then should we try to impose the most appropriate way to deliver the solution?

Invest in the groups and organisations that are best equipped to find solutions and then trust them to get on with it. Provide support, challenge, question, encourage and work with them to ensure they have every chance of success…but let them do what they do best – support people and causes that need their help.

 

4. Don’t allow grants to be seen as the commissioners’ Cinderella

For too long grants have been seen as the poor relation of contracts. The Orwellian mantra of ‘contracts good, grants bad’ has eroded confidence in grant-making as a valid mechanism for supporting the delivery of social outcomes. It must stop. Grants are often more effective, more efficient and less bureaucratic than the dead hand of public sector procurement.

The real villains here are inappropriate use and poor practice – whether in grant-making or in procurement. Done poorly grant-making is expensive, burdensome and unlikely to deliver real impact to beneficiaries and procurement is no different. Let’s stop judging a particular approach and start appraising the way it’s done. Good grants and good contracts.

 

5. End austerity – fund public services adequately and start investing in prevention

The elephant in the room here is the fact that our public services are chronically underfunded and charities are being asked to pick up the pieces. Local government funding has been cut savagely over recent years and is only getting worse. Take Adult Social Care for example, one of the biggest costs in our Welfare State. It may need reform and there are plenty of things that can be done to improve the way we deliver it, but there is simply not enough money to meet rising demand. There’s no realistic prospect of investing properly in preventative measures when councils are struggling to merely meet their statutory duties. If the government wanted to alleviate the pressure on small charities, it should fund public services properly and not expect the care of millions of vulnerable people to be provided ‘on the cheap’ by someone else.

 

I’m not so naïve to believe that these five things on their own would fix the ‘commissioning crisis’. Nor would they mean an end to the challenges faced by small and medium sized charities. In fact it’s my view that the constant hand-to-mouth existence faced by many small charities is what gives them their cutting edge and drives innovation and improvement. However the government are serious about wanting to offer support to these organisations, they may want to consider these actions. And….the bit I know they’ll really love, they could do numbers 1-4 without it even costing them any more money.

 

Small charities in crisis but fear not…here comes the government

commissioning20report20coverThe excellent ‘Commissioning in Crisis’ report from the Lloyds Bank Foundation for England and Wales recently set out how ‘broken commissioning threatens the survival of small charities’. And just a week later the Minister for Civil Society, Rob Wilson, announced a programme to help get small charities into the public service supply chain.

Excellent – responsive government, sensitive to the needs of small charities and acting on available evidence in a decisive and timely fashion, right?

Maybe.

Or perhaps it’s merely encouraging more small not for profits down the road of wasted hours, time and thankless bureaucracy in the forlorn hope of winning contracts?

To help me make up my mind (and mindful of the political dimensions of interpreting evidence), I thought I’d start by taking a look at what Commissioning in Crisis says.

Much of the report’s content will not come as much surprise to anyone who has worked for or with small charities (or for that matter a SME). Phrases like unacceptable hoops, poor scrutiny and irrelevant requirements are sadly all too familiar to those who have ventured bravely down the public service procurement path. It is worth mentioning at this stage that this type of bureaucratic time-wasting is not the preserve solely of government. At their worst charitable trusts and foundations ae also guilty of poor processes and systems that place huge unnecessary burdens on applicants. It is by no-means widespread and substantial effort to improving things has been made over the past 20 years or so….but not to the extent that charitable grant-makers can start pointing out the inadequacy of government without impunity.

My perspective here may not be unique, but I have worked as a grant-maker; I have developed commissioning processes in local government and I have applied for numerous grants and public service contracts within small charities. In my experience, public sector procurement is far far worse than almost all charitable grant-makers application processes.

What is not new, but has now reached epidemic proportions, is the shift away from grants towards contracts for no other reason than the new public management orthodoxy says grants are bad and contracts are more efficient. It is a widely held view and one that I have absolutely no sympathy for. The evidence to justify this politically-motivated approach is noticeable only by its complete absence. I am not for one minute suggesting that contracts are inappropriate in some circumstances, what I am saying is that they are used crudely and inappropriately far too often.

The solution offered by the Minister is – as Gethyn Williams pointed out – very reminiscent of government policy circa 2005…but without the money to back it up. We have a Public Service Incubator, a commissioning kitemark and a voluntary, community and social enterprise crown representative.

I had never heard of a ‘crown representative’ before but it turns out it’s something that was introduced in 2011 in order to ‘help the government to act as a single customer.’ Strategic suppliers – which appears to mean big business – have Crown Representatives. The likes of Serco, BAE Systems, Tata Steel and Lockheed Martin have named individuals on a document on the Cabinet Office website. There’s also one for the banking industry, one for the energy industry and one for SME sector.

Clearly someone feels that’s a model which is working so well it ought to be replicated for the not for profit sector. I wonder whether the Federation of Small Businesses would care to comment on the efficacy of the approach?

In 2005 we didn’t have Public Service Incubators we had a national training programme through the ‘Partnership in Public Services’ programme.

An article in Third Sector magazine from 2006 says this:

The Government has pledged to make procurement processes fairer and more proportionate by drawing up a set of standard contracts for public bodies contracting services from the voluntary sector.

Sound familiar?

The fact is that huge budget cuts and increasing demand on public services has made things far worse, not better, in a great many instances.

Smaller charities may well be facing a crisis; indeed it is one that has been rumbling on since 2008/9. The belief that the solution is to spend time learning to navigate the labyrinth of public sector procurement processes and compete for an ever-diminishing pot is misguided. Surely the solution is to change the system rather than suggest everyone learn how to play by the broken rules of commissioning?

I’m not suggesting that’s an easy task for central government or local government. But I’d like to think that if we put our minds to it, we could come up with a better solution than a commissioning kitemark and crown representative. And maybe it involves small charities and community groups getting on with delivering social benefit without necessarily delivering public services.

When did it become trendy to start slating randomised controlled trials?

RCTsDismissing Randomised Controlled Trials seems to be an increasingly popular thing to do these days – well, we are living in strange times…Last year Sally Cupitt (Head of NCVO Charities Evaluation Service) asked whether RCTs were the gold standard or just ‘fool’s gold’? A few weeks ago eminent professors Angus Deaton and Nancy Cartwright set out (in a suitably academic manner) their conclusions on the ‘limitations of randomised controlled trials’. Now NfP Synergy’s Joe Saxton has jumped aboard the anti-RCT bandwagon describing them as ‘another false dawn’ and ‘evaluation fantasy’.

Whilst it may make for a good blog post to challenge the growing awareness of and interest in Randomised Controlled Trials, it’s neither helpful nor accurate to dismiss their benefits so readily. Let’s look at some of the criticisms levelled at RCTs:

  • RCTs are ‘fraught with problems and complexity’ and Nesta’s guide to RCTs is 78 pages long so this must be true.

*Sigh*

Some RCTs are complex (though if we are tackling complex challenges in the charity sector –see point 4 below – should we be so scared of complex methods of evaluating impact?). Some too are complicated. But the existence of some poor practice doesn’t justify dismissing an entire method. That’s the sort of insidious thinking that has led some thinkers and politicians to characterise all charities as; poorly run, self-interested, inefficient ‘sock puppets’ of the State. Surely we don’t wish to subscribe to that type of logic?

There is a tendency, as with many specialist techniques to shroud them in complexity and technicality which serves the interests of experts and prevents their wider application. This does not make the method complex or problematic. It merely highlights the need for better understanding, support and application.

  • Nobody mentions double-blinds.

Apart from the fact they do if you are inclined to delve into the academic literature, the real issue here is that it is a red-herring. That’s the sort of sentiment which prevents RCTs from becoming a mainstream evaluation tool. It doesn’t matter if you don’t run a double-blind trial. Let’s be pragmatic about things – there are things which are essential in running trials and things which are nice to haves. In fact, we could talk about experimental methods as a continuum on which RCTs is one approach. It might be the one we aspire to – as reasons of complexity, scale and proportionate costs can make it impractical – but it’s not right for every occasion. Not even the most ardent trial evangelist would consider suggesting that. But there are plenty of instances where they can significantly enhance current practice.

  • It is unethical to withhold an intervention from some (randomly selected) people

This one just makes me laugh and cry in equal measure as it displays an absurd degree of selection bias and wholly misrepresents the very notion of understanding what works. Firstly, if you know something is going to provide a benefit to a particular group then do not (ever!) waste time on a trial. Just do it. Give it to the people as soon as possible.

But if, on the other hand, you think an intervention is going to be effective but you’d like to know for sure if it works a trial could give you confidence in the result. When we test new interventions we don’t know if they are going to work, we are testing them. Sometimes the things we ‘know to be true’ turn out not to be when properly tested. A classic example of this is the treatment of serious head injuries with steroids which had been the standard medical practice for 30 years, until someone tested it through an RCT and immediately found steroids were killing people. And so what was known to be true changed…overnight.

Then there’s the convenient overlooking of the fact that running a pilot is considered perfectly reasonable – indeed the post goes on, without a hint of irony, to talk about an intervention in one South London school…but why was it run in only one school? Was it ethical to deprive students in other schools of this intervention?

Somehow it’s perfectly fine to run a pilot but unethical to run a trial. Hmmmm…

  • Measuring single variables isn’t realistic when charities are often tackling complex challenges

This is more of an argument for RCTs than against them as far as I am concerned. It’s precisely because of the complexity that understanding the impact of single variables is useful. RCTs allow us to separate out the other ‘background noise’ and determine just what difference the intervention makes. Of course that doesn’t mean it’s necessarily sensible to use trials for longitudinal studies where the impact may take place over a generation. RCTs, like every other evaluation method needs to be used appropriately.

What we have found in our work is that small things can make a big difference – changing the text in how we communicate, altering the way information is presented, how we ask someone to do something or the way we design a service to be more customer-centric. All these things can make a significant difference to our impact and I’d suggest it’s our moral duty to put our assumptions to the test.

  • The sample size needs to be big

Yes, it does. So it’s not always going to be appropriate to run a trial in every circumstance – and it’s possible in these instances to use experimental methods without running full-blown trials. It’s also very valuable to recognise the limitations of what we are doing. No one is saying that we must run trials on everything…but we must avoid over-confidence in attributing change to our interventions without considering other external players and environmental factors. To dismiss RCTs simply because they don’t work in every instance is frankly ridiculous.

Contrary to what is suggested there are innumerable instances where RCTs will work, are not overly complex or prohibitively expensive and wholly achievable for a great number of charities. (Indeed where scale or resources are an issue trials might even be a catalyst for collaborating to share learning and increase efficiency).

‘Why have an evaluation standard that is applicable to very few o very few of the interventions that charities make?’

Ummm…because I thought we were in the business of trying to raise standards and quality in the charity sector.

There needs to be an intelligent understanding of what RCTs are, how they work and when it is appropriate to use them. If the starting point of those seeking to support improvement of evaluation and impact assessment in the sector is to rubbish an entire method simply because it’s not a panacea for all the sectors ills, what chance do we have of that?

And if anyone would like some suggestions of practical ways in which RCTs could easily be used by charities feel free to get in touch and I’d be more than happy to oblige.

Sock puppets? What utter nonsense!

In a new report the IEA (Institute for Economic Affairs) has suggested government should stop funding charities to support advocacy work – effectively paying for themselves to be lobbied. I admit that this is a good line that seems to fall somewhere between George Orwell and Edward Lear. But this soundbite is misguided and highlights the ideologically driven approach of the IEA who would rather put their faith in free market economics that have proven such a success over past few years (ahem).

Let’s look first at some of the ‘research findings’ from Sock Puppets: How the government lobbies itself and why:

In the last 15 years, state funding of charities in Britain has increased significantly” – a partial truth as public spending cuts are having a huge impact on the sector right now. The last couple of years have massively eroded the increase over the previous decade. The comment is also ill informed as the increase has overwhelmingly been in the form of contracts – that is being paid to deliver a particular service or goods. Grant funding – and in particular ‘unrestricted funding’ that the IEA are particularly averse to – is in decline.

“State funding weakens the independence of charities, making them less inclined to criticise government policy”. State funding can indeed weaken the independence of charities. This is a theme that the National Coalition of Independent Action has picked up in earnest and there is some evidence to support this. However there are also examples of charities that have received public funding but still maintained their independence – I’d like to think Urban Forum has done so! – so we need to understand the reasons for this. My own view is that delivering contracts – as opposed to receiving grants – is more likely to lead to this sort of problem. In fact, if grants were unrestricted – which the IEA argues against – they might give charities more freedom to say what they really think, instead of gagging them over any problems they may encounter in delivering services.

The IEA criticise government funded charities which “…usually campaign for causes which do not enjoy widespread support amongst the general public”. If it wasn’t for the fact that some people will take this point seriously I would be inclined to laugh. This is utterly ludicrous. Of course they don’t enjoy popular support…that’s why advocacy charities are needed in the first place. If Gypsies and Travellers, for example, were less discriminated against, we wouldn’t need charities that sought to address this in public policy, would we? If everyone loved asylum seekers, no one would need to ensure they were being treated with respect and fairness. Just because something is unpopular doesn’t make it wrong to fund it. Take homeless provision for example; most people would agree that it is important that we have provision to provide a roof over the heads of those who are homeless. But far fewer people would be supportive of a homeless hostel next to their house. So we know some public policy decisions are going to be unpopular – even if, in more general terms, the need was recognised. Does the IEA really think popularity is a determining factor in whether a charity ought to be funded? If that were the case we’d have x-factor funding…and the mind boggles at the implications of that sort of approach.

I did manage to find one comment that I can (sort of) agree with – “It is vital that more transparency is introduced so the public know exactly what the government is funding”. The need for transparency applies equally to government and to the charitable sector, but the purpose of transparency is to support accountability. We have seen too much emphasis on making things transparent with far less concern consideration of how this contributes to greater accountability of the state to the public – or in the case of charities, to their beneficiaries.

The IEA seem to be suggesting that we leave the vulnerable, the marginalised and those who lack a voice to fend for themselves. If the public aren’t interested in supporting ex-offenders, or Gypsies, or asylum seekers or homeless people or the victims of domestic violence – all groups that traditionally struggle to secure funding – then let them suffer. It’s tough but the market has spoken.

And if big business is able and willing to employ lobbyists to represent their interests – as the Leveson Inquiry has helped to show is exactly what happens – then that is their prerogative. 

IEA criticise charities for “…typically lobby(ing) for bigger government, higher taxes, greater regulation and the creation of new agencies to oversee and enforce new laws”. Or, you could say, for advocating in the interests of their beneficiaries…quite obviously unlike big businesses’ lobbying efforts. Can it actually be called lobbying if it isn’t reflecting the lobbyist’s interests? Or is it simply that the IEA are ideologically opposed to state intervention, taxes and regulation? That sounds remarkably politically motivated and not quite the ‘independent research institute’ the IEA’s website claims to be.  Who are they advocating for?

I thought I might take a look at where the IEA’s funding came from – not government clearly – but I wasn’t able to find a copy of their annual accounts on their website…which is obviously perfectly legal, but hardly the benchmark for transparency. I did find them on the Charity Commission website however, and they showed they received income from foundations, corporations and individuals of £634,000 in 2010. I couldn’t however find out precisely who this money came from – which trusts and foundations, which individuals or companies were giving them money. Are they receiving funds from companies whose interests are threatened by charities lobbying for better regulation or the protection of exploited groups? I don’t know…..as I couldn’t find out. Perhaps this information is there and I just didn’t look in the right place or look hard enough.

But, being transparent does not mean hiding pertinent information away where no one can find it.

In the interests of being perfectly clear about my own position: I run a charity that has traditionally received government funding – often for doing the sort of advocacy work which the IEA so detests. However that has changed and we now receive no direct funding from central government – for advocacy or for service delivery – though we are sub-contracted to a small amount of work organising events and producing information on community rights. My views are unaffected by whether we are funded by government or not and my responsibility to advocate for the charities beneficiaries are what guides my work. But, in case anyone mistakenly assumes otherwise, I am not holding myself up as a beacon of good practice….just expressing an opinion.

There is much more we could and should do to; improve government funding of civil society, to ensure that government and charities are fully transparent and accountable and that we create conditions for a diverse and independent civil society to flourish. But with this report, the IEA have contributed nothing to that process of improvement.