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ViewsMarch 24th, 2014
Wales’s voluntary sector is under threat, argues our latest pamphlet by Sarah Lloyd-Jones and Chris Johnes.
The threat of funding cuts coupled with rising demand from service users is certainly a major challenge for Wales’s thoousands of third sector organisations.
But it is by no means the only threat.
In fact, they suggest that a much bigger issue is the reliance of the third sector in Wales on government and quasi-government funding. They point out that charities in Wales are relatively small compared with those elsewhere, with the vast majority of medium and large charities being wholly or very substantially funded by the public sector in some way. These bodies enjoy relative security and relative generosity of funding, at least until now. But they pay a heavy price for that funding – their independence. Charities that dare to speak out in ways that might be deemed to be critical of their funders put their income and their very existence at risk.
Not only that, but their reliance on ‘easy money’ means that they are less adept at raising funds from elsewhere and, crucially, lose sight of their original purpose and mission as they chase the cash. Their trustees become managers of income streams and contracts, not people with vision and drive.
Add to this the substantial number of, again, relatively generously funded ‘branch charities’, funded by London HQ, and the result is a worrying lack of vigour, rigour and independence in the sector that claims these very virtues as its own.
So what to do?
Well, somewhat belatedly some third sector organisations and their various umbrella bodies are stirring because of the threats to their funding. Trading and trusts are the new saviours, with courses galore on how to become a social enterprise or apply to various trusts and foundations for funding.
But it’s not enough just to change the income stream – even if, at this late stage, it is feasible.
The whole culture of the third sector needs to change. Trustees need to be invigorated, understanding their leadership role and the importance of the independence of their organisation. The third sector needs to get leaner and meaner, focusing on outputs that really make a difference to people’s lives.
Are we – for the Bevan Foundation is a part of the third sector – up for this? It remains to be seen.
Victoria Winckler is Director of the Bevan Foundation.
Note: the Bevan Foundation is funded by a mix of membership subscriptions, a modest core funding grant from the Joseph Rowntree Foundation and various small project grants and commissions. It does not receive funding from the Welsh Government other than for specific, small-scale projects – typically such funding is less than 10% of its annual budget of approx £150,000.
Good article Victoria – Charles Handy’s ‘Understanding Voluntary Organisations’ gives a good insight into the potential hazards for the third sector once they start to win battles, become respectable and evolve from activists/lobbyists to service providers. Well worth a read
Perceptive piece that does identify a serious problem in the 3rd sector and its lack of independence. Many groups or charities have happily taken the public sector shilling and it creates an unhealthy dependence.
Many will now go to the wall because of this over- reliance while those who worked hard to maintain other funding streams will hopefully survive and thrive.
Of course with so many councils offloading their services and facilities onto local communities it’s now the best 3rd sector orgs will come into their own.
A good setting of the scene though my only concern with Victoria’s piece is that it suggests that the third sector (charities) should always be at arms length and opposite to the stance of the government. I think there is a real danger for the third sector in being overly (fatally one might say) reliant on statutory funding however in Wales we have tried to create change through osmosis of ideas and innovation through partnership and sharing of learning. I remember Rhodri Morgan once describing my own organisation as being a skilled influencer for change, knowing exactly when to use the megaphone and when to use the telephone. I have always seen funding from the Welsh Government as a tacit contract that our views and influence is respected and wanted, not a paying off of a potential thorn in the side.
I do however wholeheartedly agree with Victoria that many will go to the wall as cuts hit and we need visionary leaders (paid or trustees) to carry on with the day in day out improvement of the common lot that should be the natural home of the 3rd Sector in Wales.