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Last week’s news that homelessness charity St Mungo’s has withdrawn from the Work Programme after failing to receive a single referral is the latest in a long line of less-than-positive stories surrounding the much-maligned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

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.

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.

What role for business in the Big Society?

This guest blog comes from Michael Green, author of ‘Philanthrocapitalism: How giving can save the world’. Michael is an economist by training, and has worked in aid and development for nearly twenty years, including a stint as head of the communications department at the Department for International Development. It was through his role in government that he saw the rising influence of the philanthrocapitalists in the fight against poverty.

Michael recently spoke at the first in a series of seminars on corporate philanthropy run by NPC, EAPG and the St Paul’s Institute. For information about the next seminars visit EAPG’s website.

Back in the 12^th century, the Spanish rabbi Maimonides described a ‘ladder of charity’, ascending from the least to the most honourable. At the bottom of this ladder is to give grudgingly, which seems like a pretty fair description of the most high-profile piece of corporate do-gooding so far this year – the £200 million lent to David Cameron’s Big Society Bank by our major financial institutions, as part of the ‘Project Merlin’ deal to stop the government giving the banks the kind of kicking the public really wants to see.

Go up one rung and you get to ‘giving less than you ought but doing so cheerfully’. Whether you think companies give enough or too little, it is certainly the case that corporate donors seem very chipper about their giving. However, a quick glance at, say, the Arts and Business Philanthropy Awards 2010, shows that corporates are cheerful givers largely because it has been great PR for their business, rather than being great philanthropy.

By Maimonides’ standards, corporate philanthropy that is about coughing up under pain of regulation or cheap PR dressed in charitable clothing is not much to celebrate.

Rather, what Maimonides the management guru recommends has nothing to do with more giving or volunteering. The form of charity that he reveres the most is to give someone a job, or help them start a business. This is an important reminder, as we try to put flesh on the rubber skeleton of the Big Society, that, when we think about business’s impact on society, corporate philanthropy is not even the icing on the cake, it is the cherry.

This not a licence for business to forget corporate social responsibility and simply go off and maximise profits. What we learned from the crash of 2008 (and the recent scandals in the care industry) is that such blind pursuit of short term profits is bad for society and for shareholders. We need business that thinks for the long term and realises that responsible business practices are integral to business success.

The idea that companies’ contribution to society is much greater than what is measured on a profit and loss account is not a new one. But it got a boost earlier this year when the world’s top management guru, Michael Porter of Harvard Business School, pronounced that harnessing this ‘shared value’ is a key element of competitiveness. Rather than seeing their social and environmental policies as a loss to the bottom line, Porter endorsed the view that companies can ‘do well by doing good’.

At the moment, it’s pretty hard for CEOs or shareholders, or customers, to measure this shared value and figure out the socially usefulness (or uselessness) of a company. If the government could change the rules on corporate reporting so that companies explain better what they really contribute to our society, we might understand better their role in the Big Society.

Testing the Big Society

Earlier this year, on April 1^st, a small part of the Big Society was born. In Berkshire West, the healthcare charity Sue Ryder took over the Duchess of Kent hospice in Reading, and with it the delivery of all in-patient specialist palliative care services in the district. The transfer is part of the NHS’s Transforming Community Services agenda, and is (believed to be) the first time a voluntary sector organisations has taken over an NHS-run hospice.

This is big news, both for the Big Society agenda and for Sue Ryder.

For the charity, taking on the Duchess of Kent hospice will increase their reach without (proportionally) increasing their fundraising burden. Firstly, it can be incorporated within their existing management structure, realising efficiencies of scale. Secondly, It is a state-funded service, so the charity will receive a far greater level of funding for the hospice than they would normally expect. But the benefits are not just financial. As the sole provider of in-patient specialist palliative care, Sue Ryder will be able to consolidate the work they already do in the area, and provide consistency for service users. In its press release, Sue Ryder committed to using the opportunity to “improve access and increased support for patients in the Berkshire West communities”.

For proponents of the Big Society, the contract will provide a test case for further commissioning of public services from charity sector providers. It’s yet to be seen what the measures of success will be, but cost-savings and (we hope) quality improvement must be high on the agenda.

In the short term, the project’s most visible impact might be on Sue Ryder’s campaign for a review of VAT recovery rules. Whilst local authorities, limited companies and NHS providers who are delivering healthcare services can reclaim a portion of their VAT, charities cannot. Thus, as services in Berkshire West transfer to Sue Ryder, the Treasury will benefit from increased VAT receipts; the government will earn more for delivering less. And it’s not insignificant amounts: Sue Ryder has estimated that the January VAT increase alone will cost the charity an additional £1m per annum, which is equivalent to 50,000hrs of in-patient care. Now that Sue Ryder is, in effect, delivering services in place of the PCT, it will surely be hard to continue to justify denying them the favourable VAT recovery enjoyed by others.

This is a project NPC will be following closely. If successful, it could pave the way for more charity sector providers to take on public services. Irrespective, it will certainly generate some lessons to be learned by other charities thinking of doing so. We’ll be watching closely to see how Sue Ryder gets on.

Penny wise pound foolish

And so it came to pass. NPC predicted that last autumn’s comprehensive spending review would result in reductions in valuable prevention services generally paid for by local authorities. Our cuts paper tried to quantify the risk and guide funders on how to help. But what the local authority budget pressures mean in practice was brought home to me forcefully as I chatted to a charity last week. I’m not going to name the charity as it has valuable relationships with its local authority funders and I don’t want to spoil these relationships by my interpretation of what is going on.

Refuse collection contracts with local authorities are worth billions of pounds. The contracts generally run over many years—Brighton has published its contract (full marks for transparency) and its worth a billion quid for 25 years. You can be sure such contracts are negotiated very carefully by the private company’s legal team – heaven help the local authority which tries to break one of these contracts.

I’m not knocking refuse collection, recycling etc. It’s a necessary local service. But if a local council wanted to reduce specifications in order to trim 5% off a billion-pound contract costing £40m a year, thereby saving £2m a year, it wouldn’t have a legal case to do so. With time it might be able to embark on some protracted negotiations with the contractor, but the pace of the cuts don’t allow for this. So the local authority is forced to terminate a few contracts with charities offering, say, youth services, instead. These would have been provided by charities on annual contracts, without input from sophisticated legal teams, so can be terminated without legal difficulty.

So the charity I chatted to explained it was shutting some youth services. What will the young people do now, I asked? Where will they go to for counselling for family problems, homework clubs, after schools sports and music clubs, job-seeking support, drugs and alcohol advice, and so forth? Will they feel abandoned? Very probably. Will the drug dealers be pleased? Almost certainly.

‘Penny wise and pound foolish’ is how the charity described the shut-down to me. The charity predicted a rise in the usual criminal justice, mental health, and worklessness problems which plagued the area before it developed services to address these issues. This future expense will of course be shouldered by tax-payers. Some activities will be transferred to a service in a neighbouring ward—but my contact noted wrily that several members would have difficulty attending as this involved a sprint through rival gang territory.

The charity also talked movingly of the vulnerability of now-redundant employees. The youth workers employed by the service aren’t middle-class graduates with plenty of self-confidence and employment options. These are vulnerable young people born into great disadvantage, nurtured through the services’ programmes, and then given an opportunity to shine in their communities. They are employed role models helping others. And now they are let down. One young man is so ashamed he doesn’t leave his house. His employment options are limited to casual labour on local building sites—an option, but hardly playing to his considerable people skills. Its as if his light has been snuffed out—even though his redundancy is no reflection on his abilities.  The whole community is feeling the loss—the overall sense that the community doesn’t matter to anyone is palpable. So much for Big Society.

I honestly don’t think this is what the Coalition Government had in mind when it began its mission to reduce the budget deficit whilst promoting a mixed economy. It probably imagined that refuse collection could be sensibly trimmed back a bit, and that cost-effective services offered by charities and other small organisations would be retained because of the social problems solved. But in reality its got something different. The negotiating muscle of big private companies eclipses the social benefit of charities’ activities when it comes to disinvestment decisions. So the mixed economy envisaged by the Coalition Government will end up skewed towards the private sector…… while Big Society shrinks.

Big Society Bank touches down

Is it a bird? Is it a plane? Is it a Bank? Er, no, actually, the Big Society Bank won’t be a bank as it won’t get a licence.

A bit confusing, but otherwise Sir Ronnie Cohen’s and Nick O’Donohoe’s plans approved by the Cabinet Office this week look exciting. They answer some important issues raised by NPC’s research into the demand and supply of social finance to help inform the development of the Big Society Bank:

•  That transparency is fundamental. We are never going to get anywhere developing this market if we can’t learn from the performance of funds and investments, and why would investors want to invest if they can’t see a track record? NPC would like greater transparency across the social investment sector – our own research was very hampered by poor availability of public financial data.
• Expect attrition of the Big Society Bank’s capital value over the next five years. The types of investment Big Society Bank will make to support the development of the market will be necessarily long term, not very remunerative, and risky. So its good to see the potential impact on its own balance sheet recognised up front.
• Independence. NPC is relieved the Bank won’t be hampered by government idiosyncracies such as the need to spend all your budget by the financial year end regardless of whether it would be prudent or worthwhile to do so.
• Investment in infrastructure. Intermediaries will be pleased to hear they will be in line for some serious investment. And Sir Ronnie Cohen should at least get some of the £250m he wants to develop social impact bonds from the Bank.
• Investment in capacity building. This was mooted, but I got a sense that most of the investment needed to help charities and social enterprises become investment ready will need to come from elsewhere, eg, grantmakers and foundations. It must come from somewhere though, otherwise developing the market will be slow. Profits channelled into the Bank’s own charitable foundation will come too late.

The Bank has a potentially exciting role as hub, sector champion, developer/supporter of best practice etc.  NPC hopes that social impact measurement will be high on its agenda. The plans mention the need for social performance metrics, but somewhat in passing. NPC would have placed greater emphasis on this, as understanding social impact is central to growing the market successfully. If you are going to ask more investors to accept greater risks and in many cases sub-market financial returns by joining this market, they will want to know what social impact they are getting in return. Watch this space, as NPC has its thinking cap on.

Our first glimpse of the Big Society Bank

Is it a bird? Is it a plane? No…. its the Big Society Bank. Excuse the terrible pun, but the  opening of the Big Society Bank later this year could well feel like a superhero bursting through the clouds. Unlike a superhero, the Bank can’t expect magical powers to help achieve its mission – it just needs to choose carefully how it invests its money.

At an event yesterday, three reports gave us a first glimpse of what the Big Society Bank might actually look like. The event, hosted by NESTA, launched three reports that provided critical insights into how it should best invest its money, estimated at £400 million. Sitting in the audience, listening to the three presenters, I think many of us started to understand the role this Big Society Bank should play.

Firstly, the Bank should provide soft, patient capital and subsidy. NPC’s research into demand for capital from  the social investment market found that what it needs most is capital at sub-market rates. This money should be provided to intermediaries to lend on. But it should also pay for intermediaries to do critical work to build the market – help social ventures get investment ready and develop products that are attractive to investors.

Secondly, the Big Society Bank needs to invest in the development of products that appeal to investors.  Fairbanking and Ipsos MORI’s research suggests that wealthy individuals would be interested in putting their money in social investments, and most wouldn’t take it from their ‘philanthropy pot’. All very promising. However, the social finance products (say, for example, a social bond) have to be designed in a way that motivates investors. The report found that engaging with the charity or social enterprise they’re investing in is a top priority for many investors. Giving investors the products they want is critical to building the social investment market.

Thirdly, when it invests, the Big Society Bank should act like a ‘development bank’. NESTA’s report on its Big Society Finance Fund found that social investment is an emerging market.  It needs the Bank to act as a strategic investor whose aim is to develop the market.  This means it should ensure organisations at all stage of development have access to capital. It means helping develop new products that social finance intermediaries can use to raise capital. It means developing market infrastructure, like measurement systems or IT platforms, so that this burgeoning sector, well, burgeons. The Fund found that if you invest like a development bank, this is unlikely to deliver ‘market’ rates of returns. So the Big Society Bank shouldn’t expect to be making top dollar on its investments.

So what should our hero of the day-the Big Society Bank-look like? A development bank that invests in the development of the social investment market and invests most of its money at sub-market rates. It will have its eye on the long-term development of the sector not short-term financial gain.

What will the Big Society Bank look like? We won’t know for sure until it breaks through the clouds later this year and shows us what its made of. Lets hope its digested these three reports.

NPC conducted research into the demand for and supply of social finance for NESTA. This research was part of a wider project NESTA is doing to inform the design of the Big Society Bank; details of all three reports published yesterday can be found on NESTA’s web-site.

My daughter and the Big Society

The government’s Big Society project has had a mixed start; even its strongest advocates would accept that. I saw one aspect of the Big Society last week in Devon and was left wondering why it should be so difficult to sell.

Volunteering is a key aspect of the Big Society—people taking the initiative and contributing to improvements in their environment, community and in fixing social problems. A simple example of this is people volunteering in National Trust properties. I visited one last week, A la Ronde in Exmouth. I was with my daughter on a cold and damp half-term holiday. Visiting A la Ronde was an attempt to find some respite from the rain. En route there was a sign to a local donkey sanctuary.

My daughter Alice at a la Ronde

I confess that I didn’t mention this to my daughter—her fondness for supporting donkey charities has caused me trouble before, as I wrote on this blog.

A la Ronde is a quaint 18th century property with 16 sides that was owned by two spinster sisters. That is quite interesting. Of greater interest to me was that it seemed to have been opened for half term and staffed with volunteers (at least in part) as an act of public service. There were relatively few visitors and the tea rooms were staffed but empty. But the volunteer guides were friendly and immensely helpful to my six year old daughter. They talked about dolls houses, models made out of shells and dumb waiters. She was absorbed.

The volunteers did this out of a sense of delight in the property and a desire to showcase this to any visitors. In this sense they are providing a perfect example of the Big Society in action.

There is nothing false about such manifestations of the Big Society. When you see selfless and public spirited endeavour like this, it is easy to see the merit in the idea of the Big Society. It should be applauded and celebrated.

Government has done too little such celebration so far. At times it has looked as though some ministers and advisors have little grasp of the reality and extent of such voluntary activity. Everyone I know in the voluntary sector rolled their eyes and shook their heads in disbelief when they heard the Cabinet Minister, Francis Maude stumble in response to a question about his own voluntary activity. This reinforced the view of some that the real Big Society agenda is about state withdrawal rather than a positive view of private action.

The scale of government funding cuts to charities makes selling the Big Society more complicated. Prime Minister David Cameron has on occasion pleaded that he was talking about the Big Society before the need for spending cuts became apparent. He is correct in this, but any sensible advisors would have realised that the scale of spending cuts had to influence the narrative, rhetoric and promotion of the idea.

Government’s apparent inability to sell the Big Society is sad. It fails those people volunteering in Devon on that cold and wet February afternoon. In turn, it fails all those who might benefit from their efforts and those of millions of other volunteers around the country. The voluntary sector really does deserve better. I think even my daughter would grasp that.

The Big Society is a once-in-a-lifetime opportunity for charities

Today’s NCVO Annual Conference, the largest gathering of third sector leaders in the UK, asks ‘what does the Big Society mean for charities?’ One thing we do know is that, having weathered a blizzard of recent criticism, it is an idea that is here to stay. And whatever you think - whether it inspires action, confusion or derision - it has got everyone talking.

For the first time in my lifetime, charities find themselves centre-stage in a truly national debate. It’s an opportunity that doesn’t come along very often. But like Colin Firth in the Oscar-crowned King’s Speech, the spotlight is pointing at us and we are hesitating.

The Big Society is there for the taking. As politicians and Big Society gurus fluff their lines, and civil servants flap around trying to understand what charities are and how they’ve managed to ignore them for so long, now is the time for the sector to take the lead. It’s a golden chance to cement the place of charities in the national consciousness.

To do this we need to be more vocal. It is an odd quirk of the last few years that the names of bankers are more familiar than charity leaders, but it tells us something. We need more figures like Camilla Batmanghelidjh, Shami Chakrabarti, Martin Narey and Esther Rantzen – people that the public recognise and associate with charities. We’ve got no shortage of characters within the sector that could speak out more, and be successful at it.

Of course we also need to talk about the right things – what makes us different and what value we create in people’s lives, all of which can be framed in the Big Society rhetoric. What we mustn’t do is fall into the trap of just talking about cuts, or our audience will quickly lose interest.

Despite what the politicians promise, the Big Society won’t be around forever. Charities have an unique window of opportunity and we need to make the most of it now.

The Big Society: no cheque enclosed

The twentieth-century American author Dorothy Parker once said that ‘cheque enclosed’ are the two most beautiful words in the English language. Judging from recent events, you might have wondered whether ‘Big Society’ are the two most ugly.

Over the last few days, the government’s big idea has received another onslaught from sceptics. At the top of the list of accusations is that public spending cuts makes a mockery of it. This started last week with Liverpool Council’s ‘withdrawal’ from the Big Society and ended with Dame Elisabeth Hoodless’ broadside about the future of volunteering.

The fact is that the government have so far failed to directly address the question of what effects the cuts will have on the Big Society. Minister for the Cabinet Office, Francis Maude, is fond of trotting out the statistic that 90,000 charities don’t receive any state funding, which seems to suggest that Big Society can get on fine without any government support.

But we do have a problem. Whatever way you look at it, the charitable sector is going to get smaller. And it isn’t just about large charities losing out. Church halls, sports clubs and local playschemes, for example, all rely on public grants, and use volunteers that cost money to recruit, train and manage. Such organisations have already begun to disappear.

In view of the inevitable dip in financial resources, the most difficult question facing the charitable sector is about how it can continue to have impact. Resources have to be used smartly and charities have to get better at concentrating on what they do best. That is why in NPC’s pre-election Manifesto we argued for government to establish an impact fund to support charities. And it’s why we work with so many charities to help them learn from each other.

The Big Society has no cheque enclosed. Instead we’ve got to try to do more with what we have got, and that means a closer attention to where we are (and are not) having an impact.

Unfortunately we have no choice in the matter – resources simply have to stretch further.

There is nothing wrong with charities campaigning (or taking out newspaper ads)

Should charities be seen and not heard? Or perhaps they should be neither seen nor heard? It looks like some of the members of the parliamentary Public Administration Committee, which met last week, hold these rather patronising views about charities.

The MP for Dover and Deal Charlie Elphicke, for example, told the Select Committee that he thought charities focus too much on campaigning. As reported by David Mills (the brains behind The Guardian’s excellent Voluntary Sector Network), Mr Elphicke argued that ‘good charities’ are those that ‘deliver services directly to beneficiaries’. Other charities (apparently nobody used the word “bad”) are those that spend too much time campaigning. The NSPCC and Shelter were cited as prime examples of these “non-good” charities.

At NPC we define good charities as those that are achieving their mission and bad ones as those that aren’t. (And of course we recognise that there are lots of charities that fall between these two poles.) We think that taking a position on the method or approach a charity uses—whether they deliver frontline services or campaign for policy reform for example—is less helpful than understanding what they are achieving.

Indeed, in some circumstances, charities that actively and noisily campaign on an issue can achieve as much if not more than those on the frontline, particulary when they are working to address the underlying cause of a problem. To use an example from my own experience: charities that clear landmines and treat landmine survivors are providing vital services, but doesn’t it make sense to have charities campaigning for a ban of antipersonnel landmines at the same time? In the end, it could be this campaigning that ends up saving more lives. In many cases these dual roles are played by the same charity, as in the case of both NSPCC and Shelter, since neither are solely advocacy-focused or service-delivery charities.

According to Third Sector, charities were also criticised in the Commons’ committee for spending money on full-page press advertisements. It is not clear if these are adverts for fundraising or for campaigning purposes, but it does seem odd that anyone would expect charities to operate without the marketing tools available to others, whether a commercial company or a political party. I am pretty sure the ads must be effective, otherwise the charities wouldn’t be shelling out the large amounts required.

Again, the focus should be on what charities achieve, not the methods they use.

Small society, big ideas

The Big Society can be a confusing idea to understand, shrouded as it is in political rhetoric. But in reality, many community organisations, have been helping to build the Big Society for years.

Take Amin Hussain, who runs the JUBBA youth centre for young Somali people. Before the community organisation London Citizens ran its living wage campaign, he was working two jobs, just to try and survive on minimum wage. As a result of the campaign’s success he has been able to afford to go down to one job. He then used the spare time this left him to set up the youth club in North London. As Matthew Bolton from London Citizens explains, ‘Amin could build the Big Society because of the work others had done running the Living Wage Campaign.’

Matthew Bolton was one of three speakers at NPC’s latest breakfast seminar, Engaging communities in the Big Society: Learning from local organisations, alongside Mark Perrott from The Catalyst Trust and Lucy Heady from NPC. The event was chaired by the man many see as the godfather of community organising in the UK, David Robinson OBE, co-founder of Community Links.

Amin’s story provides just one example of why the work of community organisations is vital to achieving the aims of the Big Society. At the heart of these organisations is the desire to build power within communities so that local people can take the issues affecting them into their own hands. For example, the living wage campaign only came about after people from the East London Mosque contacted London Citizens about the low wages being paid to female cleaners at Queen Mary University in East London. Today the university has been awarded two ethical awards for its procurement practises and 11 universities have signed up to pay their staff a living wage as a result of action and protests by local people.

The good news for government is that it appears people want to be part of the Big Society, whether they realise it or not. Mark Perrott of The Catalyst Trust, which provides volunteer coaches for families at risk, said he is constantly surprised about how many people want to give their time to volunteer. ‘The passion is there,’ he says, ‘Now you just have to harness it.’

The challenge now for community organisations and for government is to work out how small, local action can be tied into higher level, big scale solutions. David Cameron would do well to have David Robinson on speed dial.

Growing your charity in the face of cuts

McDonalds. Volunteer numbers. Military enlistment. What do they have in common? They all grew during the recession. But could we add charities to this list too?

At NPC’s latest breakfast event, Scaling up for the Big Society, we heard from three speakers, all with hands-on experience of scaling up. We learnt from two charities that have successfully expanded their services despite the tough economic climate. We also heard about Impetus Trust a funder that takes a venture philanthropy approach and works with charities and social enterprises to scale up their work.

One of the charities, Contact a Family, has scaled up by partnering with the global corporate, Serco, to help local authorities across the UK provide short breaks for families with disabled children.

The other, Family Nurse Partnership (based on the successful maternal and early childhood health programme in the States), scaled up its work by working with government and licensing its model. It now reaches 60,000 vulnerable families, providing intensive support to young mothers and their babies to try to prevent future problems linked to social exclusion.

Both of these approaches are ones highlighted in NPC’s report, Scaling up for the Big Society. Partnership was one of the suggestions put forward in NPC’s recent report Preparing for cuts as a way for charities to increase their chances of survival and build a more attractive case for commissioners. This report looks to highlight the opportunities on offer to charities as a result of the Big Society and new funding environment, as well as the challenges.

Srabani Sen, chief executive of Contact a Family agrees. ‘There is a massive opportunity in the current environment for charities and corporates to put aside their prejudices of each other and work together to solve social problems.’

We hope the events encourage charities to believe that while times may be tough, it doesn’t all have to be doom and gloom. 

• Today’s seminar is the second in a series of Big Society events put together by NPC. It follows an earlier seminar on how charities can communicate their impact (to be repeated on 6th December) and precedes one on how charities can engage communities in the Big Society on 18th November. (There are still a few places left if you’d like to take part.)