Sticking to your (funding) principles

Funders are increasingly thinking about how they can ensure they get the most for their money. For some that means providing additional support such as training or volunteering support. For others, that means designing an approach to funding that ensures the funding is maximised.

When The Mayor’s Fund for London was set up, it carried out a consultation to look at how it could make sure its funding had the most impact. This consultation revealed that while problems facing children living in poverty are interconnected, the funding and services that address them are not. The consultation also found that the basis for making funding decisions is not always clear, and that services sometimes continue to be provided even when they are clearly not working, while other effective work has to stop because it doesn’t have enough funding.

This lead The Mayor’s Fund to put into place four key principles for its funding:

• Implementation—encouraging good practice and high quality implementation of projects.
• Evidence-based—using evidence rather than opinion to determine what needs to be done and how.
• Partnership—creating partnerships with communities, local authorities, service providers, employers, public services, central government and other funders.
• Connectivity—providing a better experience for children and families through improved connectivity of projects and services.

These principles naturally mean a higher cost model in terms of The Mayor’s Fund’s time and that of the projects it funds. Therefore it was important for The Mayor’s Fund to know whether the extra effort they were putting in was worth it. Since 2010 it has been working with NPC to see whether it is putting in place the principles as planned and what improvements it can make, what value its grantees place upon the principles, and how much of the benefit that is created by the projects can be attributed to the principles.

Our evaluation, which is released today, shows that in general the principles are being put in place, but there are still some ways the fund could improve. In particular, we found that grantees really appreciated the partnerships aspect of the funding, and the way The Mayor’s Fund connects its grantees. In fact, the grantees would like even more partnership work. You can read more about the benefits of each of the principles in the report.

The economic analysis of three of The Mayor’s Fund’s projects looked at whether it was creating value through the projects it funds, and how much of that could be attributed to the fund’s principles rather than the work of the projects. From our analysis of how the principles are being put into place we believe that some of the value that is being created can be attributed to the principles, particularly to connectivity, but also to partnerships and to being evidence-based.

The Mayor’s Fund’s approach, like other ‘funder plus’ models, is designed to ensure charitable giving is as useful as possible, and opportunities are not missed because of the way it is distributed. Our evaluation shows that the fund’s efforts to add value through its approach to grantmaking is working. Perhaps setting out firm principles when grantmaking, and then sticking to them, is a path other funders should follow to maximise the impact of their money.

No riots for Glasgow: How one charity is tackling gangs

In August, riots hit the streets of major cities across the country, leaving behind a trail of charred shops, damaged homes and injured people. Blame was placed on gangs, family breakdown, community fragmentation, unemployment, poor education and coalition cuts. Areas of high deprivation offer conditions ripe for gang culture, so it is surprising that the riots did not spread to Glasgow’s housing estates, such as Easterhouse, where poverty and unemployment have fuelled gang warfare for half a century. So how did Easterhouse avoid the riots?

In recent years Easterhouse has been transformed, with improvements in housing healthcare and education, and a significant drop in gang violence. While many of these changes have been driven by the government, one charity, Family Action in Rogerfield and Easterhouse (FARE), has played a major role.

Established in 1987 by local residents, FARE is a grassroots organisation that grew in response to the community’s needs. At first, FARE mainly addressed crisis issues, but recently it has explored what it could do to prevent one of the biggest issues affecting the community: gangs.

There are 15 known gangs in the area, and FARE saw that territorial disputes accounted for a lot of the violence and crime occurring on the estate. The gangs created a culture of fear, stopping people moving freely between areas. FARE developed an approach to tackle the rise of gangs which aimed to educate and engage children before they moved into secondary school, as this time of transition is when young people are most likely to join gangs.

FARE has been funded for nine years by one of NPC’s clients, the Execution Charitable Trust (ECT), which celebrates its tenth anniversary today. When ECT first approached FARE, it was run by a handful of dedicated staff, working in a centre that in a previous life was six council flats. It now has 44 staff members and volunteers, who run 60,000 sessions every year, including street work, workshops in primary schools, youth clubs and classes for adults. With ECT’s funding, FARE also offers financial and mentoring support to local people who are going through higher education. In 2010, FARE bought a brand new purpose-built centre, which has allowed it to build a sense of community, bring in young people across gang territorial lines and hold more activities for people of all ages. With the new building, participation in FARE’s activities has increased by 50%.

Rosemary Dickson, chief executive of FARE, says ECT’s support has been vital to the charity’s growth and sustainability. ‘Unrestricted funding made it possible to have one person dedicated to the task of raising £1.6m capital for the building. A process that would have otherwise taken at least two to three years or longer.’

Addressing the root causes of the riots will take time, but FARE shows the importance of local charities in generating solutions to prevent such problems, and the vital role of corporate funding for charities like FARE. As a result of its work, able to be carried out thanks to ECT’s funding, no gang fights have been reported in Easterhouse in the past two years, youth disorder has significantly dropped, and hundreds of young people are in education, employment and training.

Execution Charitable Trust’s annual trading day to raise money for charity is today. A version of this case study has appears in their 10 year report, which is available to read here.

The NSPCC’s strategy for a bigger impact

If you want to radically change the way an issue is dealt with what is the best way to do it? If a charity operates in an area that is covered by statutory duties then whatever it does will be dwarfed by government spending—both direct spending and funding given to charities to work on the issue. For instance although large in charity terms, the NSPCC’s £150m income is nothing compared to the estimated £6bn spent by government and voluntary agencies on combating and dealing with the effects of child abuse. This spending will reflect government priorities which, as we all know, may or may not be based on evidence.

But the NSPCC’s strategy aims to change the shape of services for victims of child abuse in the UK, by researching what’s most effective and then lobbying and campaigning government to make sure its services are as effective as possible. So for instance, one of its priorities is looked-after children, who instead of being looked after are actually 20 times more likely to be involved in death or serious injury. The NSPCC has said that it wants to understand the specific issues causing this risk, the outcomes for children in care and how the care system can better protect these children. And it has many other questions like this for other children, where it believes that we still don’t know enough about what is going on or what works. To find out, it is setting up commissions across the country whereby it will deliver services that it thinks are likely to be effective, and then properly evaluate them. The idea is that in five or so years the body of evidence about what works in child abuse will be much better and then the NSPCC can start to campaign for that £6bn spent by government to be spent in the most effective way.

If it goes to plan it could mean a step change in provision for victims of child abuse. One of the reasons why the NSPCC is in such a good position to do this work is that unlike most charities it has a large amount of unrestricted funding because it gets most of its funding from the public rather than from local authority. Nearly 80% of its income comes from donations, legacies and gifts—almost all of which will not restrict its funding in any way. This makes it much easier for it to do this sort of experimental work, rather than being influenced by other people’s priorities. The NSPCC has realised that has this privileged position in its sector and is using this to try to have an impact much wider than those children that its £150m income will directly help. The idea of charities (particularly the larger ones) thinking about how they can influence an entire sector is something we talk about in our work on impact networks. Impact networks are a topic that charities are  increasingly thinking about as they seek to do more with their money. It’s great to see a large charity like the NSPCC lead the way.

Talking about working together

Everyone is agreed that charities are facing tough times. What’s less clear is what is the way forward for charities and how they can maximise their impact when resources are under pressure. One way that NPC put forward back in February was for charities to work together to think about their ‘impact network‘, how they work within the larger system to make a difference to people’s lives. Thinking about impact networks would mean that remaining resources are allocated to the activities most effective in delivering outcomes.

So it was gratifying that a charity CEO came to NPC having read the report and wishing that the sector she worked in collaborated a bit more. We agreed to facilitate a workshop for the CEOs or trustees of the main players in the sector to think about what the weaknesses of the sector were and where they could work together. It turned out that she wasn’t the only CEO who thought the sector needed to work together more—there was great enthusiasm in the room for more collaboration on issues and honesty about the weaknesses and strengths of the sector.

We spent a long time working through a SWOT analysis for the sector. As you can imagine there were plenty of threats at the moment, but also optimism about some of the opportunities that were presenting themselves. And then NPC lead the group through an impact network for the sector and some of the ways they could work together—eg, having a strategy for the sector that can lead to more services being joined up, or sharing staff.

What I found quite surprising is how there aren’t that many forums for CEOs to think strategically like this as a sector and to share information. Even quite simple information is not readily available—for example, not everyone was clear about what each other’s organisations did. And one of the things that came up as a barrier to closer working was that people couldn’t be sure about the quality of each other’s services—yet again coming back to the idea that measurement cannot be bespoke but has to be comparable across services and organisations. We came out of the workshop with a list of 14 things that they thought would improve shared working in the sector which are being worked on by the participants. Hopefully, this sector will now be able to move forward and be able to maximise its impact.

A measurement framework for infrastructure organisations

As I wrote about back in December, NPC is working with ACEVO to develop a way of measuring ACEVO’s impact, which we hope will also be useful to other infrastructure organisations. The approach we’re taking is to establish a theory of change–specifying the assumptions, activities, and outcomes of an organisation–and pinning the measurement framework to the theory of change. This approach ensures that the measurement system captures not just whether ACEVO is achieving its outcomes but also how it is doing so.  After that we developed tools, and the next steps are to pilot them with ACEVO and then opening them up to other organisations to use.

Since I last updated you, we have been working on writing and refining the tools ready for ACEVO to start using. To help other charities who might be thinking about going through a similar process, we have written up what we have done so far here. This will be updated with the tools and results once ACEVO and other organisations have finished testing the tools.

As we’ve gone through the process, we’ve been discussing issues that will be familiar to any organisation that has been putting in place a measurement framework; how can you get information from all your stakeholders, without putting too much of a burden on them; and how do you incentivize people within the organisation to collect information. The answers to these questions are a judgement call about what is reasonable to expect, but they’re important to get right otherwise the measurement system will not generate the information that is needed. In our work with ACEVO, we’ve decided even though some stakeholders might have interesting feedback for ACEVO, there isn’t an easy and cost effective way to get that information out of them, and so we’ve had to resort to gathering for the proxies we really want. But these trade-offs have to be made. We’re also thinking about the best way to present the information so that it the mass of information generated by all the tools can be easily understood by ACEVO’s stakeholders.

We’ll keep you updated on our progress. If you work for an infrastructure organisation that you think would benefit from being part of the pilot please contact me on akail@philanthropycapital.org

The value of community organisations

Today we’ve launched our new publication Community organisations: a guide to effectiveness. This builds on the work in The little blue book, detailing how NPC thinks about what makes organisations effective, and how we analyse them.

Analysing organisations is the backbone of NPC’s approach because analysis helps charities and funders to become more effective at what they do. It helps identify strengths and weaknesses, shows what works and what doesn’t, and how organisations can improve. And in times like now, when charities and funders are facing difficult choices it should be the first step in making important decisions around what services to keep and what not.

The community sector is very important and highly effective at reaching lots of different people and making a real impact on their lives. But it is currently under threat as lots of local authorities cut back. Because community organisations are complex, they are sometimes difficult for funders to truly appreciate. This is the reason why we’ve chosen to outline our approach to analysing and what we believe makes a truly effective community organisation.

You can read more about the content of the report in my blog for The Guardian.

Why violence against women charities may be vulnerable

The violence against women (VAW) sector is one that many people, including NPC, say is in trouble. But at a time when so many charities and charitable sectors are in trouble, how can you tell if the VAW sector really has more precarious funding than others?

In 2009, the Government Equalities Office, worried by claims of underfunding, commissioned NPC to do a study into how sustainable and stable the VAW sector was. We talked to experts within the VAW sector and looked at existing evidence of funding problems, and then compared it to evidence about the charity sector as a whole. We then took a random sample of VAW charities, looked at how stable they were, and  compared them to a random sample of charities from another similar sector–mental health.

What did this research show? A mixed picture, as you would expect in a highly diverse sector like violence against women. Overall the numbers of services had risen, but there had been some closures. Given what’s happened since (the field work for this research happened in 2009), the most important finding from this research is that the VAW sector may be highly vulnerable to public sector spending cuts because of its heavy reliance on statutory funding. Domestic violence refuge services make up a large part of the VAW sector, and often have a very narrow funding base (all the refuges in our sample were reliant on two or fewer sources of income for 60% of their funding), making them very vulnerable to changes in local government funding. The VAW sector generally had  a less diverse income base than that of the mental health sector.

Commissioning was a worry for both mental health and violence against women charities–for VAW it might mean that the sector changes as statutory funders seek to commission more generic services from larger organisations. VAW charities have  additional  cause to worry, because of the lack of income diversity mentioned above: if all your funding comes from one main source its worrying when there are changes to how it is given out. Because some smaller, more specialised VAW organisations have no paid management to devote their time to fundraising, there were worries that commissioning might be prompting a downward spiral in the stability and sustainability of these organisations. Those charities operating in the niche areas like female genital mutilation or prostitution, suffered from a lack of obvious funding streams to apply for.

So it seems that we were right to be worried about the VAW sector. The question now is, how can it be helped to become more stable?

Having the ambition to close down

Recently big charities have been receiving a lot of criticism that they are empire builders only concerned with building themselves up. So, it is nice to see one charity refuting this criticism: the Otto Schiff Housing Association has announced that it is to close and give £35m away to other charities because it thinks they are better placed to carry out the work.

When NPC analyses charities we look at six areas of effectiveness: activities, results, leadership, people and resources, finances, and ambition. Many charities would say they are ambitious, but sometimes they mean they want to be bigger. What NPC looks for is ambition to make things better for beneficiaries. We want charities to look beyond the narrow concerns of their organisations to their wider charitable purpose. This means putting the needs of beneficiaries above the needs of the organisation. And sometimes that means taking the difficult and brave decision that the trustees of the Otto Schiff Housing Association have just made and deciding that actually the best thing is to close down.

Thinking about what your charity is best placed to do is even more important at the moment. Charities are very concerned about whether next year’s income will be less than this year’s. To try to avoid making redundancies some charities are diversifying into areas of need or work that they haven’t done before but where they are more likely to get funding. I can understand temptation to find any funding if it means that you won’t have to make people redundant. But I hope charities are asking themselves if they are simply empire building, or if they believe that beneficiaries will be best served if this work is done by them.

Who’s to blame for charity cuts?

The cuts to violence against women charities have grown so severe that one chief executive, Denise Marshall of Eaves, has decided to hand back her OBE. Having been given this honour for her services to vulnerable women, she feels she cannot keep it if she cannot still provide a good service to these women. Eaves runs England’s main service for trafficked women, women who’ve been forced to work in prostitution, and the Home Office has asked her to provide the service with 75% less funding.

What’s happening to Eaves is just one example of what’s happening across the country with the cuts to charities. And it’s brought attention to the fact that some charities have become very dependent on the state. Not necessarily because they wanted to get all their funding from the state, but because no one else would fund them. While Labour poured funding into charities, increasing it from £5bn to £13bn, the public didn’t step up with a similar increase in donations. Private donations to charities–you and me putting money in a tin– has not risen as a share of income since Margaret Thatcher was Prime Minister. And in fact, the charity sector is relying on a smaller pool of donors who are giving more. Some sectors are harder to fundraise for than others. Violence against women is a topic people don’t really want to think about, and often that translates into them not supporting those charities that help the victims. But the charity sector as a whole also hasn’t really thought about new ways to engage people to encourage them to give more.

Which means we have situations like Eaves’ trafficking service, a valuable service for incredibly vulnerable women which is pretty much entirely paid for by statutory funds. If this service now goes, you can and should blame the government. But the blame also lies much more widely than that with a public whose generosity to charities is falling. And the leadership of the charitable sector which never paid attention to their long-term problems in fundraising.

Why don’t charities sing their own praises?

Over the past few days my friends have been forwarding me articles about Devon County Council’s proposed 100% funding cut to ADVA, the domestic violence service in Devon. This is because people know that I’m interested in domestic violence and I worry about the funding for the sector.

But so far, the articles about ADVA have only irritated me. They’ve talked about how awful it will be for victims of domestic violence without ADVA, but without mentioning how effective ADVA is, or what it actually achieves. Having researched the domestic violence sector for NPC’s report on the issue, Hard knock life, I know there’s a wide spectrum of effectiveness for those charities helping victims of domestic violence (as there is in most charitable sectors). So, to make up my mind about whether or not I cared about ADVA’s funding crisis I spent a few minutes googling.

ADVA has been lauded by the Audit Commission for its work—it helps victims go through the court process so that overall prosecution and conviction rates for domestic violence have increased. Last year 90% of prosecutions brought in one of the specialist domestic violence courts in Devon were successful. Victims supported by ADVA’s independent advisors are less likely to suffer repeated violence than the average for the South West or England. There are also testimonials on ADVA’s website from experts in the sector such as Diana Barran of CAADA (one of NPC’s examples of effectiveness). I think we can be confident that if ADVA goes it will be a loss to the domestic violence sector as well as to victims of domestic violence in Devon.

But annoyingly this evidence of effectiveness is not presented in news articles about the cuts. Instead they present anecdotes  rather than proper evidence of the good work that ADVA does day in and day out. Even the Guardian Cuts Blog says that the Audit Commission viewed it as effective, but then goes on to talk about claims that the consequences of losing this funding will be that ‘Children learn abusive behaviour so consequently can become abusers of the future’, something which is possibly true, but a few steps removed and pretty hard to prove. ADVA itself doesn’t seem to do a very good job of showing off about its work and getting the news out there about what it achieves.

The cuts are coming. Today we’ve had the warning from charities that 250 Sure Start centres could close within a year.  We need to make sure that good services are protected. Services like ADVA who have evidence of effectiveness need to be talking about the real difference they make, and the difference that its users will see if they’re not around.

Are you achieving what you think?

Where to start when deciding how to measure your impact? As in most things, at the beginning; by thinking through what your aims are and how your outcomes and activities relate to them. So last week NPC was off to ACEVO who have commissioned NPC to develop a framework for measuring their outcomes. Excitingly ACEVO hopes that this framework can also be used by other infrastructure bodies to measure their impact and we’re hoping to test it with some others later in 2011.

The first stage of this work is a theory of change workshop; where we work through how ACEVO’s activities lead through to its immediate outcomes and then longer-term impact. Theories of change are very useful for charities to think through regularly and make sure they’re on track. When NPC has done it with charities it has also thrown up interesting things, such as most of the activities are concentrated on an outcome that people agreed wasn’t that important. Or that getting to the final outcome involves so many stages it is questionable about whether it really happens. Generally they’re a useful tool that I would recommend charities using to work through how they are planning on achieving their impact.

So last week, ACEVO and NPC worked through ACEVO’s theory of change. This was to make sure we had agreement on what is needed for ACEVO to deliver its impact and what that impact looks like. This is the first vital stage that organisations need to go through before they can think about how to measure their impact.

Now the challenge has been left with NPC to think through how ACEVO can measure its impact. Not an easy challenge, as infrastructure organisations find it notoriously difficult to measure their impact, but one we are determined to crack. Keep tuning in to find out how we get on.

Add some value

As we all wait to hear what the Comprehensive Spending Review says next week, one thing I’m certain of is that there will be more calls for value for money within public funding. And as charities negotiate funding over the next few years or so, there will be more questions about whether or not they can prove their value. Obviously at NPC, we think being able to prove your value is a good thing—it shows you’re measuring results and know what your charity achieves.  And there are many charities who can already do this, as we discuss in our recent publication Proving your worth to Whitehall.

But the responsibility to do this cannot lie entirely with charities. If statutory funders feel that they’ve got a responsibility to spend money on things wisely, then haven’t they also got a responsibility to spend money on the measurement that lies behind that?

I was speaking last week to a charity that wanted to do an Social Return on Investment (SROI). ‘Great news’ said his funder from local authority, ‘and if it can just also measure the value you add in so-and-so, then that would really help us when we’re comparing the different options.’ Yet the local authority wasn’t willing to fund the SROI. But since the local authority is the body with the responsibility to the tax-payer to prove value for money, shouldn’t it be funding the research that discovers which options offer the most value? If local authorities find there’s no information on what charitable interventions offer the best value when they need it, they don’t have to go far to find someone to blame.

The networking effect

The Big Society had a positive reception in Salisbury today, where 100 members of Wiltshire voluntary and community society were gathered to discuss what they could do. One of the things they were very interested in, is how to involve more people in the Big Society and how to gather views from people on what they want.

This is incredibly important—the Big Society is ultimately about building social capital—basically, social connections and the trust and norms of behaviour that go with them. If charities want to help build the Big Society, they need to show how they help build social capital, they need to show how they are connected into the grassroots of their community, and they need to show that they represent people. The Big Society is about devolving power down to people—not about presuming that you know their needs and priorities. And this is true for charities as much as it is true for the state. And for this to work, you actually have to reach the people in your community, rather than just the usual suspects—something which isn’t always that easy.

Fortunately, the RSA (www.thersa.org, where Martin is speaking tomorrow) has been doing some interesting work looking at the social capital in communities. Its analysis shows who gets reached by organisations and who gets left behind—which would allow charities to try to target their interventions a bit better.  And importantly, the analysis also shows who holds surprising positions within the community. It’s not always the obvious people like councillors that you should be speaking to if you’re trying to find out what’s going on in a community. Instead, it could be people like the local pub landlord, or the organiser of a mothers’ group, who are actually tapped into more informal networks. These are the people who you have to bring on board if you’re trying to start a new idea—like a new local festival. This sort of analysis could be used by community organisations to make them much more representative of the community as a whole, and make their interventions a lot more powerful.

How cheap is free?

With charities having to do more with less over the next few years, a common answer to how they are going to cope is ‘volunteers’. It seems like the perfect solution—committed, talented people giving up their time and skills for free, and all playing their part in the Big Society.

But I worry about the equation of volunteers with ‘free’. A number of charities already use volunteers in key roles. But many people outside the charity sector don’t understand the effort that goes into making sure that a volunteer is properly used and looked after. It costs the Samaritans an average of £100 to train a volunteer. Samaritans has 16,500 volunteers—so that’s a bill that soon racks up. And this is an ongoing process that has to be repeated regularly. The Samaritans estimate that the value of the work that its volunteers does is £23.3m. But that value can’t be unlocked without investment upfront that someone still needs to pay for. When NPC analysed ChildLine in 2007, we found that only 50% of volunteers stayed for more than a year. That means that the recruitment and training of volunteers has to happen pretty much constantly to ensure that ChildLine’s vital service can continue to run.

Volunteers are going to be a vital part of delivering the Big Society and an important role in supporting charities after the cuts. But these volunteers need investment and training if they are to be used effectively and safely. This is especially important if volunteers are working with vulnerable people. While volunteers are a great resource for charities, they are far from free.

Making a real difference

Sometimes the social problems that we research at NPC can seem intractable with little hope of things improving. We see charities doing great work but we don’t always see social problems going away. 100 years ago charities were set up to tackle poverty in Tower Hamlets in London. But 100 years later, it still remains one of the poorest areas of London, with no sign of that changing soon.

Therefore I hope readers won’t think it’s just because I’m a geek that reading the British Crime Survey made me very happy. The survey shows that figures for domestic violence have been falling since 1995. Falling dramatically as well – by 70% since 1995. Nor is that just because 1995 was a particular high. Last year, incidents fell 15%. As far as I’m aware, this isn’t because of some methodological change in the way they count them, but a real fall that’s been happening for years.

When I think about it, it’s not that surprising. Domestic violence has moved higher up the government’s agenda during this time. More money has gone to the sector, both statutory services and charities. More targets have been set about reducing in domestic violence. And charities have been at the forefront of innovations that have made people safer. For instance, Coordinated Action Against Domestic Violence, has pioneered the training of Independent Domestic Violence Advocates (IDVAs) and people attending Multi-agency risk assessment conferences (MARACs). It produced an evaluation that shows following intervention by an IDVA and a MARAC, 60% of domestic violence victims report no further violence. All over the country there are thousands of women who are being helped by IDVAs and MARACs and who are safer as a result.

While it might seem that nothing ever improves, beneath the surface changes for the better are happening. And these triumphs by charities should be celebrated. Let me know about other achievements of charities in other sectors.