Charities often experience a few bumps when they restructure and grow. But the Alzheimer's Society has recently suffered some acute growing pains after a fundamental shake-up of the way it operates.
The society is merging 240 local branches into 49 regional centres on 1 April as part of a change programme called Fit for the Future. It says the move will strengthen accountability and help it win more contracts to deliver dementia services.
The charity's trustees approved the new structure last November in response to the Department of Health's first National Dementia Strategy. The £150m strategy, published in February 2009, was established to increase awareness of dementia and improve care. The charity hopes its new regional administrative centres will align it with NHS regions and help it win more contracts.
But some staff and volunteers think the new structure makes the charity too bureaucratic and centralised, and that its plans reflect a wider trend for charities to restructure to meet the demands of commissioners rather than local people.
The rebellion, which has led some branch members to form breakaway dementia groups, shows little sign of abating as the countdown to the implementation of the new regional structure - being referred to as "locality management" - draws closer. The society's former chief executive, Neil Hunt, departed in January without serving his notice period.
Management consultant Alan Fowler, a former chair of the society's Winchester branch, recently spoke out after conducting his own investigation into the society, which employs 1,150 staff and generated £51m last year. Fowler, who joined the society after his late wife contracted Alzheimer's 15 years ago, began investigating after failing to get "reasonable, constructive responses from management and trustees" to questions about the changes.
He considered two issues: the extent to which a consultation of staff and volunteers was genuine, and whether head office was wasting money on administration and management. His report claims that the introduction of the new regional structure was a "done deal" before staff and volunteers were made aware of it, and that the consultation was little more than a sham. The society, he claims, ended branch elections, opened a formal 90-day consultation with staff about the impact of redundancies caused by the changes and published a paper on volunteering that talked about the disbandment of branches - all while the consultation was supposedly still in progress.
"The society misled branch committees about the decision-making process, failed to consult them properly and largely ignored their views," says Fowler.
During the second phase of his inquiries, he compared the amount head office spent on management and administration with the same figures at 21 other national health and social care charities. He did this because of a "personal hunch" that the society was spending too much on "an increasingly complex management structure".
Fowler discovered that £7.1m of the society's £50.9m of spending in 2008/09 was allocated to management and administration, which represents 13.9 per cent of total expenditure. "This figure does not include all the costs of the society's regional and area tiers of management," his report says. "If these costs were included, indirect overheads would probably rise to about 20 per cent of total expenditure."
The 13.9 per cent figure was higher than all the other 21 charities whose management and administration costs he analysed, except for one. The report concludes: "The society has become top-heavy in management and administrative terms, and too much of that income is having to be spent on organisational overheads. The society should surely take urgent steps to reduce its managerial and organisational overhead expenditure in order to devote a larger proportion of its income to direct support for people with dementia and their hard-pressed carers."
The society would not give Third Sector an interview to discuss Fowler's findings or explain its position, but in a statement Ruth Sutherland, its acting chief executive, said Fowler's report was misleading. "The society spends 84p of every pound providing high-quality care services, campaigning and research for thousands of people with dementia and carers," the statement said. "Given that we provide services for thousands of vulnerable adults, funded mainly by voluntary income, this is an achievement we are proud of."
The statement said she was "saddened" that Fowler "has not been reconciled with the changes being made following a long period of consultation to move to a structure that allows us to deliver more services to more people in more places".
Fowler sent his reports to the society's London head office early in 2010, but did not receive a response until Third Sector contacted the charity. Since then, Alastair Balls and Matt Sellen, the society's chair and director of corporate resources, have contacted him. Sellen wrote: "We will remain vigilant on costs but also believe that we do compare favourably with other charities of a similar size and service offering." He said the move to locality management would help the society to increase its number of clients by 30 per cent.
Head office might have been slow to respond, but many branch chairs did get back to Fowler after he sent details of his findings to about 60 whose details were listed on Arena, the society's intranet. Their comments suggest that discontent still runs deep.
"I can see some logic to what the society is trying to do, but the whole thing has been grossly mishandled," says Fowler. "A charity is not like a company, where you can lay down rules and regulations and expect people to follow them. The society is going to lose a number of experienced and highly committed volunteers."
Fowler will be among them. He intends to resign as chair of Winchester's fundraising sub-committee at the end of the month, disillusioned and saddened by what he regards as the society's betrayal of local branches and volunteers.
Fowler Says the society's consultation of staff and volunteers was inadequate and it spends too much money on senior management
Sutherland Says the new structure will help the charity win NHS contracts and deliver more services to more people in more places
What branch chairs said
"Volunteers are being dumbed down to near invisibility, more or less just required to shake collecting boxes"
"The trustees are wearing blinkers and ear plugs and have driven a coach and horses through our close-knit organisation"
"The society's management hierarchy is far too complex and costly"
"I am so disgusted with locality management and the way its was handled that I resigned"
What the society says
"Volunteers have been at the heart of the Alzheimer's Society for 30 years and will continue to make an essential contribution to our success"
"We are confident that the Fit for the Future programme will provide a wider range of volunteering opportunities so that people can make a difference"
"It is impossible and irresponsible to draw direct comparisons between charities in the way Mr Fowler has done"