Charities provide a collective response to the failings of the private market and government.
The private sector contributes enormously to human well-being by creating stuff we want and the income to buy it. But it fails to deliver public goods, it often rewards the ruthless, and it is heartlessly indifferent to the plight of people who—due to chance, choice or capabilities—aren’t economically productive.
Government efforts to redress these problems by regulating markets, providing public goods, and addressing inequities, often fall short of the mark. The political priorities of the majority (or minority?), bureaucratic restrictions and intolerance, and ambition-led policy, are some reasons why social and economic injustices and unmet needs persist.
Despite valiant efforts to make up for private sector and government shortcomings, charities are under-resourced and under-powered to properly make a substantial difference.
But it doesn’t have to be this way. Charities that seek to improve human welfare can take several steps to increase their combined impact. Collectively, charities would be so much more effective if they could:
- Have free or cheap access to academic research to help design and improve their services.
- Have easy access to the valuable individual outcome data (eg, health, employment, education, crime, benefits, and housing) locked away in government databases (while still protecting rights to privacy and confidentiality).
- Use common outcomes measures across organisations so they can compare the difference they make to that of others.
- Publish the results of all that they do (not just the positive spin for fundraising), and so contribute to the body of knowledge about how to solve difficult problems and improve the lives of those they try to help.
- Receive financial and other support from funders to really understand what works and share it.
- Ultimately prioritise meeting their mission above organisational survival.
Implemented together, these steps would be game changing.
Charities would save time and energy by building on what is already known, rather than reinventing the round, or even square, wheel. They would have better feedback on what is successful, and unsuccessful, to be able to improve. They would be able to compare themselves to and learn from other organisations. Effective practices would spread quickly and ineffective ones would be dropped. They would be incentivised by funders to maximise their impact rather than market themselves. And they would make best use of their competitive advantage over the private and public sectors—credibility and authority from being, and being seen to be, truly mission focused.
With better knowledge, hard evidence, and by behaving collaboratively with the right incentives, charities would create much more impact than they do today. More importantly, they would be able to mould the workings of the private and public sectors, rather than react to their shortcomings.
The main obstacle to these changes is large. No individual charity, or even small group of charities, can implement any one of these steps by themselves. The benefits will only flow if the steps are taken together and all charities benefit together. Unilateral action would consume resources and present risks with little prospect of any benefit. This makes change hard.
At NPC we are working on all of these issues in one way or another. We are keen to hear from people—or even better, groups of people—interested in these issues and to support the efforts of others. So let us know if this strikes a chord. Together we can make a big difference.