Achieving more for less

Mike Wright is Development Director at KeyRing, which supports vulnerable adults in their communities through networks of members supported by volunteers. KeyRing helps members to become full citizens of their neighbourhood and less reliant on paid support. The charity works with local authorities all over the UK. In this post, Mike talks about the charity’s experiences of outcomes-based commissioning. 

Some things work better in pairs: Lennon and McCartney, Jonathan and Charlotte, gin and tonic, outcomes-based commissioning and letting go. Some experimentation might be needed to get to the right combinations and the resultant mix could be a taste that takes time to acquire. But are not the results worth the effort?

Outcomes-based commissioning is, to state the obvious, about commissioning outcomes—only outcomes. It is, rightly in my view, hailed as a way to achieve more with less. Say what you want to achieve, with how much, and then tap into a massive and eclectic resource of providers to come up with solutions. It also lends itself to payment by results, reducing the risk to the purchaser.

I am delighted that there are many who recognise that doing the same for less will not provide a long-term solution; we need  different conversations with strategic thinkers in Local Authorities. Some exciting and truly innovative solutions are emerging where this is happening.

Yet, concurrently, sometimes in the same Local Authorities, I am seeing procurement exercises with ever longer lists of required outcomes coupled with ever more prescriptive inputs. As well as what we should do, more Local Authorities are directing what we should be—part of a consortium, specialists, generalists. Most mention a desire for ‘innovative solutions’, whilst allowing no scope to propose anything new. The combined resources of Local Authorities and providers required to undertake these exercises is enormous and seeing them miss the chance to be the catalyst for better ways of working hurts on many levels.

Reaction to KeyRing’s unique yet proven Living Support Network model illustrates both the above approaches. In Walsall, we have refined the model to provide a ‘Network Plus’ option to facilitate people’s move out of residential care. Their support, involving KeyRing and other care providers, and their lives generally are greatly improved, whilst the cost of their care is significantly reduced.

Then we have Local Authorities that have been more than pleased with the outcomes we have achieved for a decade and longer. Yet now, in response to the financial squeeze, they say they cannot pay for the cost of having input from volunteers (a vital element of how we reduce people’s dependency, and so the cost of their support). They will only pay a given hourly rate for inputs, although the lifetime cost of achieving outcomes will end up being far higher.

I worry that outcomes-based commissioning is rapidly heading the way of the social model of disability—cited routinely, but applied very rarely;  most funding is still in labelled streams, most services work with ‘client groups’, and ‘disabled’ people are recipients of money and support, not ‘earners’ of money to spend as they see fit.

What a difference the route money takes makes to who decides how it is spent (and on what!). Personal budgets are a step in the right direction, which then begs the question, ‘why are Local Authorities procuring at all?’

At the end of the day, providers and commissioners need to trust that ‘we’re all in this together’ and, genuinely, we all want the best solutions.

Download When the going gets tough for free from NPC’s website. This is the fifth and last in a series of blogs focusing on the changing world of commissioning which run throughout this week.

Transition and relationships: a commissioner’s perspective

Zoë Garbett is Commissioning Manager for Procurement and Market Development for the London Borough of Barking and Dagenham’s adult social care commissioning team. The role consists of researching and scoping services to develop the social care market. Zoë is currently working on a review of information, advice and advocacy services, looking at developing social enterprises, and on a number of community development projects including support for carers and befriending networks. Here she writes about how the shift to personal budgets is affecting relationships between commissioners, providers and service-users.

The move away from block contracts to new, creative ways of commissioning (Payment by Results, spot contracts and personal budgets) has affected stakeholders and the relationships between them. With the introduction of personal budgets, service users have become their own commissioners of services, meaning that providers have had to adapt their services to become more diverse and personalised.

The transition from block contracts to personalised delivery continues to present challenges. Block contracts need to reduce to make way for personal budgets and to open up the market, however they cannot simply stop. Transition, in this economic climate and with limited intelligence of how personal budgets are being used, has become very difficult for commissioners, whose role now should only be to stimulate the market (through spot contracting) where there are gaps in provision.

Change needs to be seen as an opportunity to improve. Surely this change to service users holding the budget, and therefore the power, is a positive move and the way it should be? Change has led to a shift in, not a loss of, control. The agenda has meant that service users have become central in discussions about their lives.

Personal stories from service users in our borough show that personal budgets, with real choice and flexibility, have allowed people to create and design their own care packages that have enabled independence and improved quality of life. Positive impacts have extended wider than the service user to their support networks, with informal carers feeling more supported and able to take breaks and the service user being able to employ friends and family to provide care.

With the move to personal budgets the relationship between commissioners and providers has altered. This relationship was previously contract driven; providers now have to market their services to individuals with budgets (personal and self funders) instead of relying on block contracts from statutory bodies. Therefore, a more equal relationship between commissioners and providers should be able to develop.

Commissioners have been trying to work more closely with providers in order for outcomes to be met and service gaps avoided, proving the best for the service user. Our commissioning processes have reflected these changes for a while, with specifications becoming less prescriptive and allowing providers more flexibility.

Providers are developing partnerships with other organisations, merging and forming consortia. Subcontracting between providers is becoming more common. These new methods of public service delivery are emerging to ensure that the sector is more sustainable; through tackling competition, meeting specification criteria and protecting smaller, specialised services. Local authorities and other agencies are in full support of these delivery models and welcome guidance around how best to support these developments.

The personalisation agenda is well on its way and it is already impacting services, the market and service user choice. To engage with the agenda charities and other providers are advised to diversify their funding streams as well as review business models, service offers and service evaluation.

Commissioning for social value and specifying the importance of local knowledge and experience throughout the tender process are areas where charities and other voluntary sector providers can usually excel. Barking and Dagenham’s commitment to quality services and providing a level playing field when opening up the market is evident in our tender evaluation criteria which favours quality over price. Engaging with providers through events and discussions during our scoping phase of service review allows potential and current providers to influence service specifications and outcomes.

The traditional segregation and distinctions between the sectors (public, private and voluntary and community) have become blurred. All sectors are facing the same financial challenges and are all impacted by the same agendas, including localism, personalisation and the Health and Social Care Act. Therefore, we need to embrace the strengths of these sectors and see change and challenge as an opportunity to work together to deliver our common goal: providing a thriving health and social care market, full of choice to allow service users and residents to access services that will meet their needs and wants.

Download When the going gets tough for free from NPC’s website. This is the fourth in a series of blogs focusing on the changing world of commissioning which run throughout this week.

Commissioning, cuts and charities: What’s really going on

Today we launch our new report, When the going gets tough, a comprehensive picture of how charities are getting on since the changes to public service commissioning. Earlier this year, in partnership with Zurich, we carried out a survey of the top 750 charities in England and Wales, receiving a response rate of 13.5%.

We asked charities about everything from the types of contracts they’re bidding for, to their relationships with commissioners, working in partnership or consortia, experiences of subcontracting, cuts to their government income, and how they feel about the future. We’ve talked a lot about why we did the survey, and why we think it’s important to know these things: today I want to focus on what we found out.

Charities are finding things tough.
Not perhaps a groundbreaking conclusion—charities are facing a drop in income at a time when the demand for their services is increasing. A third of our respondents have had their government income cut, and face some tough decisions in response. 65% are cutting frontline services, and 73% are making staff redundant. 9% are at risk of closing completely in the next year. Worryingly, 62% are using, or planning to use, their reserves to supplement their income—a move which harms charities’ sustainability and sets alarm bells ringing for the future of the sector.

Charities believe they face a much riskier future.
90% of our respondents believe they face a riskier future now than this time last year. New types of contracts, like payment by results, are exposing them to much higher levels of risk, and they are worried about the impact this will have both on their own financial security, and sceptical about whether these new funding mechanisms will benefit the people they help. 55% think payment by results contracts will have a negative impact on their financial security.

46% of our respondents are subcontracted by another organisation to deliver services—but again, they worry about the risks involved, and how this will impact on financial security. Just 10% feel that being a tier three provider in a supply chain has a positive impact on their financial security. One of our case studies, mental health charity Restore, didn’t receive any referrals from one organisation it was subcontracted to. Charities generally prefer being subcontracted by other charities over working with private organisations—only 41% of respondents say they have a good relationship with private lead providers, compared to 80% with charities.

Charities have changed the way they work in response to changes in commissioning.
Nearly 80% of our respondents plan to work more collaboratively with other organisations—which can help small charities get a look in on big government contracts. 75% hope to harness the power of volunteers to minimise the impact of cuts. And charities are positive about their own abilities, with 70% confident they have the right skills and capacity to successfully bid for contracts in future. 80% of those already subcontracting work believe they have the skills and capacity to manage the process effectively.

You can read more about these findings, along with five detailed case studies of charities across the UK, in When the going gets tough, available to download for free on NPC’s website—and we’ll be writing about our research all this week on our blog.

When the going gets tough: Charities’ experiences of public sector commissioning

The way that public services are delivered is changing fast. Driven both by financial factors and new beliefs about how to commission services, a very different world is emerging, and everyone is starting to feel the effects. A path-breaking NPC report published tomorrow will give an honest snapshot of how all this is going from the perspective of the charity sector.

Charities and other not-for-profit organisations have been delivering public services for years. Some people think this is a good thing, while others fear it has led to mission drift and silenced charities’ voices as campaigners. For good or bad, there is no denying the importance of government funding to the sector: a third of charities rely heavily on income from government contracts and grants.

And the government wants to go further. It sees in its various public services and localism agendas a world in which charities and social enterprises, as well as for-profit companies, are involved in delivering many more public services as the state pulls back.

So what kind of world is likely to emerge, and how can we ensure that it works well? At NPC, we care very much about the ability of the social sector to help as many people as possible, creating a real impact in their lives. So we’re delighted to be launching our report into charities’ experiences of public sector commissioning this week. Tomorrow, we publish When the going gets tough, which sets out the results of our commissioning survey, sent to 750 charities across England and Wales earlier this year. We are grateful to Zurich for supporting us in its production.

The way commissioning shapes the social sector matters enormously and will have a major impact on the texture of the society we create. This survey is one of the first to really try to understand how the new commissioning world is working out for the charitable sector. We hope the results will be interesting for all those with a stake in public service delivery—charities, commissioners, funders, private providers and service users—and offer a picture of what is and isn’t working at the moment, and what we can learn from this. It is early days, but we need to get a handle on what is going on now—not when the deeds have all been done.

When the going gets tough will be available to download for free from NPC’s website from Tuesday 29 May. This is the first in a series of blogs focusing on charities’ experiences of the changing world of commissioning which will run throughout this week.     

Is the work programme working for charities?

Last week’s news that homelessness charity St Mungo’s has withdrawn from the Work Programme after failing to receive a single referral is the latest in a long line of less-than-positive stories surrounding the much-maligned government scheme.

Like many charities, St Mungo’s was subcontracted by another organisation to take part in the scheme. The charity’s role was to help long-term unemployed people back into work. But St Mungo’s decided to pull out as it hadn’t been referred a single client. Back in March the Single Homeless Project also pulled out, citing small payments as its reason. The charity said it could not sustain its service on the money being offered through the programme, so would have to withdraw.

Are all charities facing these problems? Or does it depend on a charity’s size, or where it sits in the supply chain?

So how typical are these experiences? We’ve certainly heard a lot of anecdotes about charities having problems with the programme—whether it’s because they are too small to bid for contracts, cannot afford to provide their services on the payments offered, or aren’t being referred clients. But are these just an unlucky few, or is this a problem endemic to the scheme across the country? And how typical is this of other situations where charities help to deliver public services? Are all charities facing these problems? Or does it all depend on a charity’s size, or where it sits in the supply chain—is it only the bottom-tier subcontractors who experience the problem that St Mungo’s had?

There are all kinds of questions about how charities are faring in delivering government services in the new commissioning environment. But it is difficult to extrapolate UK-wide trends from individual charities’ experiences. Earlier this year, NPC, supported by Zurich, carried out a survey of 750 UK charities who receive some government income to try to build up a bigger picture of how charities are getting on since the changes to public services commissioning. The results are in, and we’re preparing to publish our report next week. We hope that what we have to add to the debate around commissioning will lead to some constructive and useful discussions between charities, commissioners and funders—and we look forward to sharing our findings with you soon.

What will the Giving Summit give to the sector?

The champagne was put on ice and the grand Giving Summit very much toned down. The 19 (yes 19!) action groups set up to feed into the summit were testament to the original idea for a rather splendid affair topped off with a reception for the great and good of the sector. In the end it morphed into a bit of a squib—a meeting of the chairs of those action groups only—and most of us in the sector could take the night off.

So do we laugh or cry at this turn of events? We all know why it happened. The philanthropy tax stands in the dock. Right or wrong, the charity and giving community was pretty appalled at what took place in the Budget and it was too embarrassing to have them assemble at a fancy do at a major venue as originally envisaged. No consultations, no hint of what was to come. And when the sector reacted with shock and disbelief, the government dug itself in deeper by an attempt to suggest that it was all to avoid philanthropists evading tax through donating to weird off-shore ‘front’ charities—a suggestion that collapsed before a distinct lack of evidence. Whatever the government does now as a result of the consultation on the tax relief cap, the idea that the coalition thinks that philanthropy is a code word for tax dodging is one that will stick.

The conversations were good and open. And a number of precise ideas came out of them.

But it is a major shame that the Giving Summit did not take place as originally planned. I was lucky enough to be on two of the action groups and they were two of the most well-organised and focused discussions I have attended in my (admittedly brief) time as head of NPC. One looked at how to get core costs funded—a massive issue for the sector for both charities and funders—and the other talked about how to improve the advice given to high net worth individuals to get them more interested in philanthropy and promote good, high impact giving. The casts were high powered but mixed. The conversations were good and open. And a number of precise ideas came out of them.

I hope these ideas get followed up and implemented. Nick Hurd will, I am sure, do his best. And perhaps the Treasury, with their heads hung low, will try and help these new ideas happen to make up for their blunder on tax relief.

As the state withdraws and plays a new role in this age of austerity we need to think hard about how people give, why they give and to whom. Government taking a lead here is useful—although in the end the sector must work these things out for itself with initiatives like the Give more campaign or the Philanthropy Advice Forum.

In the meantime, let’s hope they keep that champagne on ice, in case we do get a sensible change in the proposals for the cap on tax relief on charitable donations.

The ideology of impact

Against a dark background of austerity, double-dip recession and record levels of inequality, it’s no surprise the spotlight shines on the numbers—GDP growth, output, unemployment, credit ratings—the list goes on. And in the world of charities, it seems that the subject of impact falls into the same category—data, numbers and ratios.

We often debate what impact means—a discussion that’s usually about definitions and technical distinctions. But recently as I was talking about impact with a group of trusts and foundations, the question of what impact means ideologically was raised.

A concern was raised that the increasing focus on charities measuring their impact was motivated by a desire to marketise the charity sector. The more we focus on impact, the more charities compete with each other in a marketplace driven by contracts to deliver services. If we wait long enough, the big charities won’t look any different from Serco, the argument goes.

Understanding impact isn’t about making charities jump through hoops.

But I don’t think that’s what impact is about. A focus on planning, managing, and measuring impact means a focus on understanding the lives of the people that charities aim to help, and the changes they bring about in those people’s lives. By understanding this, they can work to make the biggest positive change possible. Impact measurement is a tool for social justice, not marketisation.

Take the charity The London Pathway, for example, which works within hospitals to integrate and improve healthcare for homeless people. It grew from a recognition that healthcare outcomes for homeless people were much poorer than for an average person—they are admitted to hospital four times as often, they stay in hospital three times as long—their overall health is much worse. By focusing on the needs of the people they aim to help, and understanding their life situation, The London Pathway has been able to massively improve these outcomes. And the reason it understands these needs, and can make a big positive change, is because it monitors the impact of it’s work. That’s social justice—better outcomes for people suffering multiple disadvantage.

The thing is that The London Pathway, and other charities that deliver outstanding impact for the people they help, not only improve lives but also save society a pile of cash. In the words of Harvard Business School Professor Michael Porter, it ‘is an excellent example of how a value-based approach can better serve patients, reduce inequalities, and deliver better outcomes that matter to patients per pound spent’.

At NPC we’re passionate in our belief that by focusing on impact—the real change they create in people’s lives and society—charities can achieve better outcomes for those who are worse off. And this will reduce inequalities and improve social justice.

Of course there’s a danger that impact measurement is used as a technocratic mechanism to bludgeon charities, favour those with the resource to build fancy systems and research methodologies, and marketise the sector. But if we really get to grips with impact, embedding it in charities’ practice and funders’ decision-making, what we can do is something much more positive, much more powerful: we can help charities to back up their passion and conviction with a compelling case that should help them get the resources their work deserves.

I hope we remember that understanding impact isn’t about making charities jump through hoops. It’s about putting the real changes to people’s lives at the heart of what charities do.

Tris will chair two conferences in London and Manchester later this month on how charities can embed an impact approach in their work, which will focus on the practical, with a wealth of guidance, experience, support and tips on measuring and managing impact.

Minding the gaps

As the dust settled on last summer’s riots, attention shifted from the young people who had been rioting to the ‘troubled families’ they grew up in. David Cameron pledged that his government should be judged on its success at transforming the lives of 120,000 such families by 2015. But in an area where government has claimed it will fix the problem, what is the role for independent funders and charities? Where are the gaps?Troubled families, according to the UK government, are those where parents are out of work, children are not in school, and family members are involved in anti-social behaviour and crime. These problems are often long-standing and inter-generational—children whose parents have multiple problems are eight times more likely to be suspended or excluded from school than other children, and ten times more likely to be in trouble with the police. The 120,000 most troubled families in the UK cost society an estimated £9bn every year.

Troubled families are a UK government priority—last month it committed an extra £448m to target the most difficult families, and has pledged to expand early years services to try to prevent problems emerging. These efforts are encouraging, but they will not reach all families in trouble, and financial pressures threaten the success of work in this area.

Independent funders do have a role to play in supporting these troubled families, but it is not a straightforward one. However, there are gaps where more support is needed and where charitable funding could have  real impact.

• Support for vulnerable families in the earliest years can prevent problems later in life. The government have talked a lot about early intervention, but there are still a lot of gaps to fill—for example the commitment to doubling the Family Nurse Partnerships programme by 2015 will still only cover 40% of estimated need.
• Ensuring the quality of support for the most challenging families. With recent cuts in public funding, projects supporting troubled families face larger case loads, and are having to shorten their interventions and are provide fewer outreach services—which undermines their effectiveness.
• Providing support for mental health problems. There is a need for staff who are trained to recognise mental health problems, make timely referrals and provide families with practical support.

This is a challenging and complex area, but that is not a reason for funders to shy away from it. Charities can make a crucial difference in this area—charities like Family Action, whose Building Bridges project helps families with multiple and complex problems. Helping these families to tackle problems early can prevent a generation of children growing up to face the same problems their parents have. The potential for a positive impact is huge.

A version of this blog first appeared on Latest from Alliance.

Normal service will not be resumed

Lewisham’s directly elected mayor, Steve Bullock, recently told NPC’s seminar on cuts in the third sector that, far from this being an unusual and tricky time for funding, with normality soon to be restored, ‘There is no normal we will ever go back to’.

That was something we all sort of knew. But it was still rather chilling to hear it from a frontline politician, and a Labour one at that. For the point he was making was that, whoever is in government, resources for most public services are going to be very stretched. The money will not come flowing back. And that raises some profound issues that we are all only just starting to really grapple with.

Bullock talked about the problems faced by local leaders. There will be much less money and councils will not be able to fund all the services that they have in the past or keep as much as they want in-house – tough choices will have to be made.  Do you put all your contracts out and give them to the lowest bidder – with national providers such as Serco or Capita or charities such as Barnardo’s picking them all up? Or do you try to make sure that at least some of them go to local social enterprises and charities? Clearly, a world where nothing is locally controlled is very different from one where most is – but what can you afford?

At the same event, the Newham charity Community Links – which is very active and successful – talked about the choices it faces as the cash dries up. To what extent should it keep some community centres and adventure playgrounds by making the community run them? If they can’t afford to staff the centres properly, should they close them down or employ just enough workers to keep order – and then say that the community and parents must show up to make the whole thing work?

Now this latter case – sometimes called co-production – might be a good thing. It might stop professionals telling communities what to do and instead, and at last, empower local people. But in other cases is it really an abdication? In some situations it can be dangerous – not just literally in terms of health and safety, but in its effects.

For instance, research shows that youth clubs without proper, guided activities are a breeding ground for trouble not a hindrance to it.

What impact will there be on equality and other aspects of the service? This was raised by the High Court’s decision to throw out Surrey County Council’s plan for ten of its libraries to be run exclusively by volunteers. Would an arts centre, run not by professionals (because its Arts Council and local authority money has been slashed) but by volunteers, serve the community as well as before? Do we care if its outreach, innovation and culturally diverse offerings go by the board in this new world? Whatever the volunteer-run arts centre now offers, it is clearly different from before. Society has changed.

And what about fundraising itself? Are we going to urge more and more high net worth individuals who donate to charity to make up the gap in government funding? Or will the coalition continue to signal that philanthropy is really just a fancy name for tax dodging?

So the way we make our communities work is never going to be the same again. That much is clear. There will be winners and losers – we are not really all in it together. The battle is about what sort of Big Society we have in the future. Is it one where the state withdraws, leaving those who can to organise and fundraise? Or is it one where there is an attempt to deliver fair and decent services for the whole community?

These are the real battles to be fought out over the next decade or so. The political parties need to start facing up to these issues. And so do we, the great British public.

This article first appeared in the May edition of Public Finance, and also on Public Finance’s blog.

Philanthropists aren’t tax dodgers

Dame Stephanie Shirley sold her successful computer business and then poured tens of millions of pounds into tackling the problem of autism. She invested in research into its causes, she founded schools for children with autism, and her funding pioneered services for adults.

Hardly the profile of a tax dodger. Yet it’s people like Dame Stephanie that are most likely to be affected by the government’s proposed cap on tax relief. Let’s be clear though—donors weren’t even personally benefitting from the tax relief in the first place. In order to use the tax relief, the donor to give the money away—which meant the donor no longer held the money for his or her use. Or does the government believe that cash behaves like sub-atomic particles and can be in two places at once?

If the government thinks that the rich are funding bogus charities abroad which then channel the money back to the ‘donor’, then it should investigate such abuses and use the law to bring perpetrators to justice. Charities here in the UK are regulated by the Charity Commission, and charities with income over £25,000 submit audited accounts. Defrauding a UK charity is quite difficult and may result in criminal prosecution so I doubt tax lawyers were recommending clients exploit charities as a tax loophole.

It could be argued that a donor giving the same amount of money is better off, net, with the full tax relief than the cap on the tax relief. In principle, that is true. But I doubt there are many donors giving away large sums do so without considering the tax effect of their donations on their overall wealth. So without the full tax relief many will just give less.

I’m no tax expert, but I calculated that an imaginary donor with a nice £1m bonus to dispose of could give away only two-thirds of what he would have given before the tax relief. He had to retain a third for the tax man, unless he wanted to fund the tax bill from elsewhere. NPC has just been told by a charity that one of their major donors told them that the cap on tax relief will affect his donation to the tune of 30 to 40%.

In 2009/2010 £780m of donations to charities came from donations of over £1m. So very conservatively, even a 20% reduction on the £780m figure means £150m less for charities. And this doesn’t include the effect on a myriad of decent-sized donations below £1m.

These people are generous, and fund charities to help others. We need more wealthy people to join this generous club. Meanwhile charities doing good are struggling on all fronts. Government funding is down, trusts and foundations have less income to give away, donations from the general public are under pressure. And demand for charity services are up—for the first time in 35 years a charity in East London told us recently they were distributing food parcels to people in extreme poverty. And now this. What has happened to David Cameron’s vision of Big Society?

So this is why NPC has signed up to the ‘Give it back George’ campaign with our colleagues from CAF, NCVO, ACEVO, CAF and many other charities.

What is your charity selling?

Garlic, onions, tomatoes… and hope too? There’s an interesting new charity fundraising idea being piloted in London this week. The Alzheimer’s Society is selling ‘Hope’ alongside chocolate bars and boxes of truffles in two north London supermarkets (see this article in The Guardian).

Through the scheme, shoppers who pop a wooden block marked ‘Hope’ in their basket and pay £1 when they get to the till, will be donating to the main organisation in the UK working with people with Alzheimer’s (alzheimers.org.uk).

I’ll be interested to see whether this takes off. On the face of it, this seems like a great idea and clearly charities in this country could do with some good fundraising ideas right now. Many are facing a double whammy of declining donation income and increasing demand for their services. At the same time “high pressure” fundraising techniques, like ‘chugging’ where fundraisers approaching prospective donors on the street or on their doorsteps, are facing increasing opposition. (Not to mention the negative impact on charitable giving of the Chancellor’s new tax relief cap.)

As well as potentially introducing a different fundraising technique for charities, this new tactic also got me thinking about what charities are ‘selling’. If the Alzheimer’s Society is selling ‘Hope’: what is the charity I work for selling? What word would we inscribe on a token for sale at the local supermarket?

NPC is seen as being synonymous with impact, so many people would imagine we’d be selling blocks of ‘Impact’. However, our work with charities and funders is wider than this. Alongside the rigorous number-crunching and impact measurement we’re well known for, NPC helps charities with their strategies and ‘theory of change’, carries out research to inform decision-making, and even provides outsourced support such as survey design. As a think tank, we also come up with new ideas and approaches, such as the NPC’s Well-being Measure, and convene events in order to facilitate debate and fresh thinking about key issues.

So perhaps NPC is selling ‘Innovative thinking’ (definitely not snappy enough to sit on a shelf next to a bag of Maltesers). Or ‘Confidence’ (that doesn’t work either, although we know that our clients and partners usually come away feeling much clearer about what they’re achieving and  this helps motivate staff, volunteers and trustees alike). Ultimately however, what NPC is offering everyone it works with is a solution. Whether this is a set of recommendations based on our latest research findings, a new framework to measure the impact of a programme, or simply the chance to learn from like-minded charities or donors at an event, we hope we’re helping the sector tackle the problems it faces.

I’m not sure how appealing a box of ‘Solutions’ would be to the average shopper, but that’s another issue entirely. What is your charity selling?

• NPC has teamed up with Third Sector to hold a ‘Measuring & Evaluating Outcomes In Practice’ conference in London (24 May) and Manchester (29 May). See more here.

Big Society Capital opens for business

Today is an exciting day for the social sector because it marks the launch of the long awaited Big Society Capital (BSC). Not a bank, as once mooted, but a source of risk capital for those who find it hard to get it from conventional suppliers. At NPC we welcome its birth and wish it very good luck indeed.

But we do need to exercise some caution, and not get too over-excited or expect too much too soon. The sector faces many problems: very significant cuts to funding filtering through; new types of contracts that threaten, as they have with the Work Programme, to cause chaos for charities; and a massive increase in needs as the state withdraws from great swathes of activity. Yes, BSC has some serious money—£600m—but compared to the size of these problems it is not much. It is also not all going to come on stream at once and is only relevant to a some organisations in the social sector.

BSC themselves do not lend direct. They pass their money on to various financial intermediaries to do the lending for them—so those are the organisations that charities and social enterprises will need to engage with. And these intermediaries themselves face a few stumbling blocks—they need to find enough ‘investment-ready’ charities that can benefit from BSC money, decide on their terms, and think about how they measure success. The last point is crucial for this whole agenda: how do you know if the social return that you expect to make (in return for a lower-than-market financial return) has actually been achieved? There are answers to many of these questions and NPC is at the forefront of helping solve them, working across the social investment marketplace.

So who exactly is going to benefit from BSC? To be clear on this, we need to be clear about who can benefit from social investment more generally. Charities have been falling over themselves to see if they can be beneficiaries of BSC largesse. But our work with charities suggests a lot have not totally understood that what BSC offers is loan finance. In short, to benefit from BSC or any kind of social investment, charities need a solid revenue stream (or valuable secured asset).

For some charities this is fine—especially if they have shops or other services that the public pay for directly which generate an income. But it is a more complex issue for most. Some, who rely on government contracts, think social investment initiatives, like BSC, could help them deal with the increasing fashion for payment by results. Since in these contracts payments only come after the successful delivery of outcomes, most charities need to get someone else to put up cash at the start—this is one of the motivations for the much-heralded Social Impact Bonds. But this market is growing very slowly, with only one live SIB so far, and it is unclear how big the market will turn out to be. In any case, social investment cannot make up for the fact that there is simply less money around for public sector contracts of any type.

Perhaps those most eager about BSC will be social enterprises, since by definition, although driven by a social purpose, they are out to make profit and so are suitable places to put risk capital. Scalable social enterprise—like bus company HTC or leisure centre operator GLL—may see the biggest benefits from BSC funding.

BSC is a triumph of perseverance by many people but first amongst them has to be Sir Ronald Cohen. Over the past decade he has been a consistent, unshakeable, but always polite advocate of getting more money into social investment, following on from the groundbreaking work of the Social Investment Task Force set up in the early New Labour years at the request of the Treasury. It took time, but a potential funds were uncovered in the many dormant bank accounts in the UK. After a lot of wrangling, which continued until the time of the Coalition government, and the addition to the pot of £200m from the banks (under a lot of  moral and government pressure) the pieces came into place to get BSC going. Much time since then has been spent in getting state aids permission from the EU, setting up BSC with the recruitment of Nick O’Donohoe as CEO, and carrying out all the leg work involved in getting ready to launch a new organisation.

So we should celebrate April 4^th as a day when the sector moved into new territory. We’ll be watching the development of BSC with great interest and helping wherever we can—but we wouldn’t encourage anyone to give up the day job just yet.

Why do you give to charity?

I was talking to someone on Friday night about what I do at NPC. This led, as it generally does, to a discussion of her own charitable giving. She told me she gave to Cancer Research because her aunt had died of cancer, and the RSPCA because as a child she had adopted several rescue cats from them, and now kept seeing abandoned pets in her local area.

I’ve had many conversations like this off the back of the ‘what do you do?’ question. And most people will readily volunteer the reasons for their charity choices. I was particularly intrigued to hear my new friend tell me about her attitudes to giving in light of the research into donor motivations NPC is planning to carry out over the next few months.

We’ll be conducting a major study into why UK donors give, the first research of this scale in the UK. It will consist of a survey of over 2,000 medium- and high-income households, alongside in-depth interviews. The Money for Good UK research will be carried out later this year and we hope to publish the results in November 2012. We’re delighted to be supported by the Pears Foundation, Oak Foundation, Bill & Melinda Gates Foundation and NESTA.

Finding out about wealthy donors’ motivations is more important than ever in light of the recent budget proposal to cap tax relief for major donors, which could have a serious impact on high-net-worth giving, and threaten the many charities that rely on these large donations to survive (for more on this see giveitbackgeorge.org, the campaign to get the government to reconsider, headed up by NCVO and CAF). Uncovering more about what makes these donors give, and what could make them give more, has become even more relevant.

The person I spoke to on Friday gave to charity based on personal experience. But in the same conversation with others, I’ve heard a host of different reasons—from a desire to help eradicate a problem they see daily, to a sense of duty stemming from religion or family background, to the request from a friend for sponsorship for an event. Working at NPC, I am always particularly interested to hear whether people think about how effective a charity is before donating to it, and how they go about finding out.

This is why it will be so fascinating to see the results of our survey, and to find out the complex thought processes and gut instincts that govern where money goes in the UK charity sector.

But we’re not just doing it because it’s interesting. By digging down into donor motivations and experiences, we hope this research will help charities in the UK better understand the donors they’re trying to attract, and improve how they engage with them—in particular high-net-worth donors. A US version of this study by Hope Consulting two years ago found that better engagement could potentially leverage huge amounts of extra funding for charities: donors would potentially give an additional $20bn if charities better met their giving needs.UK donors are giving in a country with its own problems and its own distinct history, and the context of their donations differs from that of their US counterparts—which is why a separate study is needed. Unlocking an equivalent potential in UK charitable giving could make a huge difference to the UK charity sector, and the lives of those it seeks to help.

My conversation on Friday reminded me how important it is to think about the different motivations which drive people to carry out the same action. And for charities, how important it is to understand this in order to maximise fundraising opportunities. We hope that our Money for Good UK research can help go some way to achieving this.

Read more about NPC’s Money for Good UK work in the press release.

Giving Insights: Better giving, Radiohead’s radios and stopping riots

Head over to our online magazine, Giving Insights, to read some brand new articles posted this week:

• In We need better giving, not just more, NPC consultants Benedict and Plum discuss the merits of the many campaigns to promote more giving, and state the case for a campaign to promote better giving.
• The way we were sees NPC senior consultant Adrian Fradd reflect on the changes he’s seen at NPC and in the charity sector more widely since he started working here over six years ago.
• We interview Radiohead bassist Colin Greenwood, who tells us why he’s passionate about his work with the Children’s Radio Foundation.
• Gracia McGrath, CEO of mentoring charity Chance UK, tells us why she blames the Daily Mail for the riots, and why young people need better PR.

You can also explore the archives to see articles dating back several years – including our profiles of experts and celebrity donors, our how-tos on a range of topics from SROI to setting up a charitable trust, and our opinions on everything from cutting public spending to charity brands.

Shared measurement for the well-being of young people – a report from our Well-being Measure drinks reception

Our venue - the Institution of Mechanical Engineers, overlooking HM Treasury

On Wednesday evening we held a drinks reception in Westminster attended by over 60 charities and funders passionate about improving young people’s well-being.

All these organisations had come together to hear about our Well-being Measure, and learn how it could help them. Over a glass (or two) of wine, we heard a series of short speeches: from NPC’s Dan Corry, Jane Steele, Head of Impact and Evaluation at the Paul Hamlyn Foundation, and Maria Stephens and Marcus Duran of Toynbee Hall, a customers of the Well-being Measure.

Dan Corry started by saying how excited NPC is by the Well-being Measure, and its potential to help thousands of organisations, and hundreds of thousands of young people. He noted how all organisations are feeling the increasing demand to demonstrate their impact, and as public finances continue to be strained, this is only going to get more pressing – particularly in youth services. He argued for shared approaches to measurement which are nuanced and flexible enough to account for individual circumstances – very much the philosophy of the Well-being Measure.

From a funders perspective, Jane Steele talked about how being able to quantify and demonstrate outcomes is vital to trusts and foundations. She explained how this makes organisations stand out and how PHF is encouraging grantees to take up the Measure.

As customers, Maria Stephens and Marcus Duran of Toynbee Hall said how pleased they had been to find a measure that combines quality, ease-of-use and credibility. Maria gave a short account of how they were able to show improvements in young people’s resilience and life satisfaction, and how helpful this was in reporting their impact to funders. Marcus explained how the Well-being Measure had given him a new language to communicate to schools and the confidence to be able to argue how their work improves well-being. You can read more about our customers experiences here.

‘The reports are great – we see results immediately and they’re perfect to present to our funders.’ Quote by customer Vincent McCart from Operation Youth Advantage +

We finished the evening by thanking our all those involved in the tool: our customers, including the Outward Bound Trust, Scottish Adoption Agency, Save the Children UK, Brighton Oasis Project, and BBC Children in Need; our funders, the Private Equity Foundation, Paul Hamlyn Foundation, and Esmée Fairbairn Foundation; and the excellent web developers at Public Zone.

Overall the evening was a great success. To everyone who came – thanks for making it a great event and we look forward to continuing the conversation!

Work with 11-16 year olds and need to prove your impact? Take a look at NPC’s Well-being Measure here and you can sign up to our monthly newsletter here. Costs start from £800 + VAT for a ‘before’ and ‘after’ measure of a programme.

You can get in touch with us by emailing wellbeing@philanthropycapital.org or calling 020 7620 4850.