Interview: A head for business

Peter Vicary-Smith, Chief executive of Which?, says the sector should get involved in more commercial activities.

Peter Vicary-Smith
Peter Vicary-Smith

Large parts of the charitable sector need to start working in commercial ways, according to Which? chief executive Peter Vicary-Smith. "That is a good thing, not a bad thing," he stresses.

Vicary-Smith's commitment shows itself in more than just words. He has put his faith in commercial activities since he took over the organisation formerly known as the Consumers' Association in 2004. It seems to have paid off: he has managed to reverse the charity's sliding income.

"We call ourselves a commercial charity because we were set up not to need donations," he says. "All our income comes from the products and services we sell to consumers. That makes us understand what the issues are in the marketplace much better than if we weren't participating."

The first decision he made was to abolish the Reader's Digest-style prize draws previously used to entice subscribers to Which? magazine. "They were disliked by many people and were an unnatural fit for an organisation such as Which?," he says.

The charity is committed to using market mechanisms in its work campaigning for consumer rights. In 2000, for example, it set up a car importing business to force manufacturers to cut car prices in the UK. "We will be doing more of that kind of direct intervention in the market," Vicary-Smith promises.

Now, he says, other charities need to follow suit. He acknowledges that many have "grown up enormously" since he became Oxfam's head of appeals in 1991, but argues the sector as a whole needs to do more to recruit talented people with commercial skills. He says charities could help themselves by highlighting the training and career development they can offer, which is often better than that available in the commercial world. But they also need to face up to the issue of pay, he says.

"The sector has long seen low salaries as part of what it has to do," he says. "That is a big mistake. I took a 50 per cent salary drop when I joined the sector, but it is increasingly difficult to persuade people to do that."

He thinks charities can justify commercial sector-level salaries to their donors. "Some charities thought donors wouldn't accept fundraising costs, but they are realistic and know you have to spend money to make money," he says. "The same education process needs to go on with salaries. It is not about what you pay people; it is about what you get out of them."

Although Which? doesn't have to worry about fundraising, it is an issue that occupies Vicary-Smith in his role as a board member of the Fundraising Standards Board.

However, he says Which? has no plans to subject charities to the same level of rigorous scrutiny as it applies to other claims on the consumer's wallet. "It would be a very big piece of work to establish who would use your £10 most effectively," he says.

It is also not an issue that matters hugely to Which? consumers, he says: "If you ask people which sectors they are most worried about in terms of getting a raw deal, financial services and estate agents come out top," he points out. "Charities don't feature that highly."

Which? itself, he says, is "proud to carry the charity label", and he is delighted that the Consumers' Association adopted the name of the organisation's commercial arm soon after his arrival. He says readers of Which? magazine are now more aware of its campaigning work.

"You look back now and wonder why we ever had more than one name," he says. "There is so much more resonance now between our charitable and commercial work." And that, he believes, is the ideal every charity should be striving for.

<h2>Vicary-Smith CV</h2>

2004: Chief executive, Which?
2002: Commercial director, Cancer Research UK
1996: Director of fundraising and communications, Imperial Cancer
Research Fund
1991: Head of appeals, Oxfam
1988: Management consultant, McKinsey

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