Where next for charities and civil society? Dan Corry’s NPC Ignites 2018 speech

At this year’s NPC Ignites, NPC CEO Dan Corry asked the sector to imagine what an ideal version of itself might look like. He identified areas for improvement, such as concern for impact, and used new evidence together with existing resources to show there are issues with the sectors geographic spread.

The speech explores the costs of leaving the sector to entirely to itself to address these problems (or not) against undesirability of  interventions which compromise the independence which makes the sector so vital.

As a solution, Corry proposes a new ‘Civil Society Improvement Agency’, which will support and challenges the sector to ensure it is being the best it can be for beneficiaries. Part funded by government and the sector it would use what data is available to push for a more rational distribution of charitable resources and agitate for the adoption of good practice and the collection of data.

Listen to this speech


The sectors’ immediate problems

At today’s conference you are going to hear about a range of issues facing our sector.

Although trust remains pretty high, it has been sliding, and as a sector we have been battered by revelations about safeguarding, about harassment, and about fundraising techniques—including sleazy black-tie City dinners—that give the impression that at least some of our number are more interested in maximising our income and defending the reputation of our charities, than in doing the right thing and calling out bad practice.

And the perennial struggle for sufficient funding is getting more difficult, especially for the smaller end of the sector.

Many charities and other non-profits have had real problems with the public sectors switch from contracts to grants—especially larger payment by results ones.

And the context is changing all the time, often in ways which are hard to predict the outcomes. Look at the constant churn of structures in health or criminal justice, or the introduction of Universal Credit, or even Brexit.

Keeping up with legislation, technological advance, changes in regulation, rules and systems keeps us very busy.

All these are areas that NPC has a lot to say about and that I know we will hear about them at today’s conference.

What sort of civil society do want?

But I want to paint on a broader canvas to kick us off.

I want to ask the question, what sort of charity sector, what sort of civil society, we would ideally want?

And then I want to try to consider how we get closer towards that.

In my view, this is what the Civil Society Strategy should have been about. And it did nudge towards it, but not in a clear and decisive way.

Now that may be because government—of whatever colour—doesn’t think it should take a view as to what sort of civil society they would want. Indeed, that independence from government is the whole point!

So, there is one school of thought which says,

‘leave well alone and let voluntary sector ‘market forces’ do their thing. The sector will be a product of the things people decide to do.’

Which puts voluntarism and pluralism at the top of the things we care about.

But I am not in that boat really: a laissez-faire approach has consequences in terms of geographic spread, focus, performance, impact and scale that I think are unacceptable.

After all, people’s lives depend on a well-functioning sector and places can’t really work if their social sector isn’t. So, I would argue that there’s some things we need the sector to be, and some things we need it to do.

We need it to be spread around the country—especially where it is most needed (and ideally spread around causes that need it too).

It should be complementary to the public and private sectors—focusing on the things it does well that they are poor at—like relationships. A place where the profit motive and even money-earning is not dominant

The ideal sector would also contribute to key but softer objectives that I think are often overlooked.

It should help create social capital, bring people together and help with nurturing tolerance—a key issue in today’s Britain.

It should be an integral part of a pluralist society, often full of a campaigning zeal, and good at amplifying voices, especially those not often heard.

But I also view the ideal sector as being effective and efficient, good on delivery to beneficiaries and where relevant and circumstances allow—innovative.

Now if the ‘free-ish’, laissez-faire version was working OK, and was close to the ‘ideal’, we may not need to do much and could be towards the ‘leave well alone’ end of the spectrum.

But is it?

Where are we?

Let’s have a look at some data to start with.

This is mostly new data and analysis—although it is worth saying that there is a dearth of easily accessible and analysable data about the sector out there. As a consequence, finding out basic facts turns out to be very hard. So, I am grateful to a number of people for what follows.

One of the things that concerns me given the sectors importance to communities, and its function in creating social capital, is its uneven geographical spread.

A few years ago, various think tanks tried to get a story about charity deserts going—which was a bit simple, but it had an element of truth.

If we take registered charities, mainly as the data is easier than including the non-registered, and try to look at those who mainly work locally, we find that the number of charities per 1,000 of the population varies a lot.

While it is over 2 in the South East, South West and East of England, it is below 1.5 in the North East, North West, and only a bit above in Yorkshire and the Humber and in the West Midlands.

London depends totally on whether you include the City of London

Broadly speaking, while the pattern is not totally straightforward, the charity density is higher in the more prosperous regions.

We can go down a bit lower in the spatial sense though thanks to work by James Bowles from the Third Sector Research Centre.

Work he helped on for the recently published Strategic Review of Giving in London study (that I was on the steering group for) showed, as you can see form the slide, that in general outer London boroughs had far lower charity density than inner London ones—despite having many needs.

James has helped me look at the wider picture with some new analysis. Let’s take a place like Middlesbrough for instance.

It’s in one of the worst-off areas in terms of the Index of Multiple Deprivation but the region has fewer charities per head than most (yellow bar) and the town itself comes in way below even that average (purple bar).

The same goes for Knowsley, Blackpool, Stoke and Great Yarmouth.

We also know from recent Community Life Survey data that there is less volunteering in deprived areas.

This may not be a coincidence as forthcoming work by John Mohan at the Third Sector Research Centre suggests that the more charities you have in an area the more volunteering you get. So, these areas are losing out on both in terms of charities and in terms of volunteering opportunities.

We get a related story if we look at how important the charity sector work force is to different regions.

Thanks to data supplied to me by ONS, we can see that the average proportion of the UK workforce in charities is around 2%. A decent number, more than double than the average in agriculture for example.

This varies by region with generally the south having more employed in charities than the other regions and Scotland also doing well.

Drilling down geographically into these figures is tricky as it is all based on surveys so in some Local Authorities there are not many observations of charity workers. But the analysis we have done does seem to suggest that this variation holds across local authority areas as well—more deprivation, less employed in charities.

And of course, the other thing we’d like to know is where the money is going. The fantastic data that 360Giving is collecting and putting on the GrantNav website is starting to give us clues here in term of national, independent funders.

Although you have to be careful in analysing it given that it is not compulsory for funders to give them their data and because there are many outliers that could distort things. For instance, Loughborough has lots of money flowing to it because of Sport England.

However, my NPC colleagues James Noble and Mathew Mannix have done some spatial analysis of funding by independent, national grant makers, including the Big Lottery, who have made their data public.

They found the regional distribution is biased a bit towards more deprived areas—although not that much.

Going down to the local authority level and graphing against the Index of Multiple Deprivation, they found the same is more or less true (so the correlation line in the chart is upward sloping).

So, we seem to have a story that less well-off areas have fewer charities, have less people employed in the sector, and get less money—even if the independent funding sector appears to balance this out a little.

Is this a big deal? It’s hard to say unless we can round out the picture a bit further.

One thing that is very important for local charities, is funding coming via local councils. NCVO Almanac data suggest they have historically been more important for charities that central government funding at £7-8bn.

And they have they had very severe cuts over recent years. A 49.1% real terms reduction in government funding since 2010-11 according to the National Audit Office. This hits the money coming through to our sector nationally, but in addition the Institute for Fiscal Studies suggest such cuts have hit poorer areas harder.

And recent New Policy Institute work for the Lloyds Bank Foundation paints an even starker picture with regard to services for vulnerable people.

Another strand of government support is through tax breaks.

I am currently a member of the Charity Tax Commission chaired by former HMRC boss Nick Montagu. I have no idea what we will propose, but I am hoping that we will be able to uncover some data as to where the bulk of the tax breaks, through gift aid, business rate relief and so on, go.

I am not holding my breath that they find themselves going mainly to the places, people, causes and charities that need them most.

I think that all of this taken together is a strong case that ‘market forces’ have failed when it comes to the distribution of charitable activity.

What about on efficacy, impact—all that traditionally NPC-ish stuff?

This is much harder to establish. There isn’t, and possibly can’t be, that much hard data.

But from everything we know, performance, efficiency, effectiveness, is very varied across the sector.

Without a clear metric to guide decision making and provide focus, there is often a lot of avoiding decisions, of not thinking hard and rigorously enough about resource allocation.

And, as I have written before, the lack of an external pressure, such as the commercial in business, or the democratic in government, in the non-profit world is bound to have an effect.

Lack of collaboration, benchmarking, even a desire to know if things are working the best they could are all barriers here.

Passion trumps efficiency—sometimes the love of the organisation completely distracts from the idea of social impact. Sometimes the passion makes us believe we are achieving when the evidence is much less clear. And focusing down on achieving impact in cost effective ways can be a hard, if rewarding, slog.

We have nevertheless seen many more charities and funders arguing that understanding and acting on impact matters—and our survey a few years ago showed that too.

But in the end, the rewards, and so the incentives, in our sector are usually aligned with fundraising and survival: I’ve yet to see a CEO sacked for failing to achieve enough social impact.

We want to see charities using their resources in ways that their beneficiaries really value.

Some of the discussion about user journeys, embracing user voice—not  least through technology—is radical for much of our sector but it is vital.

Today we publish a report by Rosie McLeod and Theo Clay on the different types of involvement now in play, what they can do and how they can be evaluated.

Innovation was another aspect of my ‘ideal social sector’.

Of course, it happens every day both locally, and at times, in bigger charities too. But it is hard when there is no risk capital, no balance sheets and often no reserves.

Venture philanthropy—aping venture capital—does not really work in my view. Risk aversion dominates.

And in any case, we don’t want innovation to be an end in itself. Often a good smaller charity carrying on doing the same good work is all we need.

Here, we surely need to keep encouraging the social enterprise and profit-for-purpose sectors to take risks and to make sure we are directing capital to the places that can use it. But can’t we do more?

Where do we go from here?

If you believe very strongly that we should have the ideal sector I have described, then rather than be laissez faire about all this, you might want to be very dirigiste in your attitudes to the social sector.

That means, only support it where it is needed; heavily bias incentives and support to certain areas and types of charity based on some sort of ‘needs’ assessment; enforce good or even best practice.

Such a policy, if it could be made to work, could lead to a better distributed sector, that is more efficient, which achieves more social good and helps more people live better lives.

But it is avowedly dirigiste. It is anti-pluralist and plays down the role of bottom-up civil action. And, like any excessively interventionist approach, it would be very hard to deliver.

I may sound a bit of a ‘Centrist Dad’ for saying it, but clearly, we need something in the middle.

As a sector and as individual charities and funders we should want to get nearer the ideal, but not in a way that crushes the life out of individual and collective effort.

So, what does that mean?

At a high level it means a number of things.

We need high class monitoring of what is going on in our sector: data, analysis, debate. That will, in different ways, help shape the way we move forward.

The NCVO do their best in this area—and have some great people—but it is hard work, is not the raison d’être of the national bodies, and is very under resourced. On the academic side, the significant weakening of the Third Sector Research Centre at the University of Birmingham, as its funding was cut, was very short sighted.

Some of that data needs to be about the distribution of tax breaks and their efficacy. We need to end the idea, as seen in many submissions to the tax commission, of ‘don’t change anything for fear of losing what we have’. Instead we should be arguing for what a proper policy should be that builds a stronger civil society.

Learning lessons from others about how to improve impact will also help the sector improve and we need to share resources.

But here we need to be strong. Though I don’t want to go dirigiste on efficiency and impact I definitely think as a sector we should welcome and even campaign for more encouragement and nudges towards it.

That should be through changing regulation to get people and boards to have to report—and  hence occasionally discuss—their impact and how to improve it.

And this should be buttressed through support for easy to use measures and tools like the Inspiring Impact suite that we have developed with others and are very grateful to the Big Lottery for funding going forward.

We also want to look at how to create better working relationships with the public sector, including Local Authorities.

Place based work, and the way that the voluntary sector plays into it, ties all this together. This is something we are putting a lot of work into at present as getting the resources, capabilities, talents, energies of an area all working together is key to creating positive change, especially when money remains very tight. Better commissioning will be a key part of this.

Yes, all this stuff is a bit abstract currently, and at a sector level. But we all have responsibilities beyond our responsibilities to our own individual organisation: each one of us needs to look up and reach out.

Of course, what we can do will depend on who we are, our scale, our mission, our capacity.

A small local charity can share its insights with others.

A larger one, operating in prosperous areas but seeing a gap in a more deprived area, should at least think about whether it could do anything to help there. It can certainly share its data, its metrics, maybe its back office with others.

All sorts of organisations can twin with those needing help and support.

Funders can make sure their funding goes to places that need it—better off towns perhaps being philanthropically twinned with poorer ones. Funding into places with fewer charities and less social capital, may mean funding riskier options, with little track record, and working towards high impact later.

Funders should also avoid tying up front line charities in bureaucratic and unused KPIs or make their planning impossible with too many short run grants.

They can even incentivise bigger charities to share results of innovation.

At NPC we try to help the sector with collaboration, shared platforms, open source, and connecting with the commercial tech sector to inspire and support innovation.

This sort of peer support, peer encouragement, peer learning is something we need. But also, something that needs organising.

All this agenda is why I have argued—at the risk of putting NPC out of at least a bit of its business—for the creation of a Civil Society Improvement Agency

An organisation to bring all this together, to act as a clearing house, an instigator, a depository of knowledge and an advocate for change.

Based loosely on the way the Improvement and Development Agency for Local Government worked, it would be a sector led organisation, but not a membership one, joint funded by government, that looked hard at all these issues. It would push good practice and free the Charity Commission to focus purely on regulation which is where I think its priority should be in contrast to what the recent Charity Commission strategy pushes towards.

It’s a controversial idea, but one I think could really add value.

And if we are upping our game then we can demand that Whitehall and the private sector do the same with much more legitimacy.

Last year, in conjunction with Prof Gerry Stoker, we put forward a suite of changes that would help from Whitehall.

None are too troublesome, except maybe the funding ones—although the sums are pretty trivial in the great scheme of things. They range from a civil society test for policy proposals, to asking every public service to publish strategies of how it will work with the voluntary sector. We need government to act upon them.

Even when they have laissez-faire instincts, we have seen in the last few years that, in practice, governments tend to buy the idea of not just having a free for all in civil society. So, asking for them to do more is not unrealistic.

After all, we have regulation from the Charity Commission, and the Fundraising Regulator, all the bodies that charities have to answer to like the Regulator of Social Housing and the Care Quality Commission; we have a government pressurising the private sector—and public—to be more pro social and nicer to the social sector. We have Civil Society Strategies no less!

OK so some of this intervention is around the belief that we don’t have a fair world, so the third sector needs a boost and a helping hand against the force of the other two sectors. But it shows desire to go beyond benign neglect, beyond just letting the little platoons get on with it.

The Civil Society Strategy did talk about a lot of this—and I am sure that Danny Kruger will tell us more later today and enthuse us. But from our reading of it there were a few too many suggestions and hopes and not enough concrete action. We need a bit more than that.

Because civil society matters. It isn’t everything – and we can become a bit self-obsessed in our sector. But, for a lot of people, it is an essential lifeline. And for many others it is definitely a part of what makes life richer and more fulfilling.

And that means it needs to be the best it can be, it must be where it most needed and we must look outside of ourselves. We owe it to our beneficiaries to stop the endless discussions that reverberate only within our sector and work with all kinds of different organisations to achieve change.

I hope that this speech—and today’s conference—will inspire you to take this agenda forward.