Strangely positive tidings from the charity (not-for-profit) sector
Earlier this month, I had the good fortune to be asked to join a dinner attended by CEOs from the UK charity/not-for-profit (NFP) sector. I have always been amused by the NFP description, as it always felt a rather American phrase and I left there 25 years ago--but relax, this post will not be about language and the "Transoceanic Divide". It was an excellent dinner, organised by a well-regarded recruitment firm. Not being an expert on the Chatham House Rule, I will leave it to this firm if they wish to identify themselves by replying. In any event, it was one of the most astonishing dinners I have ever attended. The topic discussed concerned the strategies and prospects for NFPs in the 21st century. The CEOs were in a buoyant and optimistic mood. Given all I had read about the UK charity sector and its prospects, an upbeat and jovial evening, with executives brimming with optimism was far from what I had expected. What was going on??
Nearly all who spoke gushed about growth achieved and their prospects. One talked of their operation having tripled over the past few years. Although most agreed that the dethroning of David Cameron and collapse of the Coalition Government would be good for the sector, not one fretted about cuts in income from the public sector--a reduction which should only increase in severity next year. No one mentioned the report recently released by NCVO and CAF , reported recently in Philanthropy UK, which suggested that donation income could be down in real terms by around 20% this year.
The internet was seized upon by guests as a huge positive for the sector, enabling charities to communicate directly with their donors and interested others in new and creative ways. Each diner who spoke had some upbeat story about how they had used social media to reach out in a novel way.
I could go on, but by now most readers will "catch my drift". Now there exists the possibility that the event suffered from selection bias--in that those invited were doing unusually well--or that those doing well were disproportionately present at the dinner. But for this possibility, I cannot believe that all the downbeat stories we all read about the NFP sector are so wide of the mark. I truly worry that some of this group were in denial, or perhaps just reluctant to admit to the miserable reality which confronts them in front of their peers. Any of these explanations, apart from selection bias, is deeply worrying. Circumstances confronting the UK charity sector are downright scary and the very structure of these organisations is under serious threat, from our vantage point. Many have been in contact with us at ClearlySo, as they seek access to social investment. In my view these circumstances are both cyclical (stemming from the weak national economy) and structural in nature, and would exist also if a Labour Government were in power.
My judgement of the group of CEOs I met is that they seemed a competent and professional selection--thus the likelihood that they are in denial feels small, so I am opting for the idea that as tough as things are, few wish to admit this in front of their peers. This seems unfortunate. I would imagine vocalising the problem would be therapeutic, but this may be the sort of thing someone born in NYC would say. Also, I believe that more active sharing of problems enables solutions to be more readily found--based on the old adage that "a problem shared, is a problem halved".
I was, however, particularly troubled by their optimistic comments about the internet and social media. On this issue I did feel their optimism was unwarranted. Fundamentally, charities are an intermediary between well-intentioned individuals and the causes they wish to support. If the internet and organisations which are fundamentally about social media (e.g. Kiva, Spacehive and JustGiving) can connect people directly with causes, then the need for costly intermediation diminishes--and costs in the charity sector are very high for intermediation compared with the online platforms. This is as true in the charity sector as it is in banking, where services like Zopa also threaten financial intermediaries.
Yes, there are also cool things the internet allows charities to do with their supporters, and perhaps beneficiaries as well--but I would see the trend as more threatening than the CEOs I met earlier this month.
(Disclosure: Both via ClearlySo and in a personal capacity I have an economic interest in Justgiving and Spacehive)