What keeps your chief executive awake at night?

With recession looming, Richard Gutch discovers in the first of two articles that today's chief executives see opportunities ahead, despite the multiple difficulties.

Richard Gutch
Richard Gutch

For the past few months I have quizzed more than 100 third sector chief executives to find out what are the most important challenges and opportunities facing voluntary organisations.

The economic situation was clearly a top concern. Even though my interviews took place before the recent banking crisis, there was widespread awareness that hard times were coming. Chief executives said they were keen to make sure their organisations had a wide range of income sources and highlighted the importance of preparing for recession. That said, the development of strategies to deal with the changing economic, political and social environment was seen as the biggest opportunity for the sector. The commissioning of third sector services by government was also a big issue.

Overall, the interviews identified 10 important challenges and opportunities.

1. Great policy, poor delivery

The financial environment is getting more challenging every day, but from the sector's point of view the policy environment has never been stronger. In health, the focus on patient involvement, self-management and talking therapies are all examples of this. The 10-year strategies for children and young people are similarly encouraging, and at a local level the national performance indicators for the promotion of volunteering and a thriving third sector tell the same story. But policy implementation, particularly through commissioning, is a major source of concern. When chief executives use terms such as "appalling", "dreadful" and "a complete disaster", all is not well.

2. Responding to the recession

There was a broad consensus that a recession would bring less money and more need; but there was also a sense that it could present new, positive prospects. Tony Hawkhead, chief executive of Groundwork UK, saw opportunities in the Government's Keynesian employment infrastructure projects and in environmental projects to address fuel poverty and reduce carbon emissions.

It's possible public sector agencies will contract out more services to reduce costs, although the opposite could also apply. In any case, all agreed that belt-tightening, driving down costs and avoiding overexposure to risk were likely to be essential survival techniques.

3. Fundraising strategies

Most chief executives are keen to achieve a balance between contracts and voluntary and other earned income. This, they say, is to avoid the risk of relying on one income source and to provide some unrestricted funds for campaigning and development work.

Clare Tickell, chief executive of Action for Children, said: "Modern charities need to have research and development budgets so they can test new approaches to meeting needs."

This might need voluntary income or money earned through publications and consultancies. For example, a number of councils of voluntary service are generating income from third sector centres by providing space for offices, training and conferences.

4. New needs

As society changes, new needs arise. More and more children have profound and multiple disabilities; and, as survival rates improve, there is greater need for transitional services for young adults. Similarly, the needs of carers are changing as people live longer. Chief executives are reflecting these new needs in their plans, adjusting their priorities when necessary. The RNID, for example, is increasingly focusing on prevention and hearing health issues, reflecting the growing number of people with hearing difficulties in a noisy world.

5. Management challenges

Developing strategies to respond to new circumstances is the biggest single area of opportunity, but this presents dilemmas. Simon Blake, chief executive of sexual health charity Brook, said that deciding when to collaborate and when to compete was a big issue.

Large-scale mergers are becoming more common, as the recent births of Catch22 (formerly Rainer and Crime Concern), Livability and Clic Sargent all testify. Another example of this trend is the Terrence Higgins Trust, which has merged with more than 25 specialist or local organisations in recent years. Growing at the right pace and within an organisation's capabilities are two common concerns, and striking the right balance between service delivery and campaigning is also a constant challenge.

6. National versus local

One consequence of the growth in commissioning is increasing tension between national and local bodies. Local infrastructure organisations talk about "predatory" nationals with experienced bid teams and the ability to use voluntary income to undercut local providers. By contrast, nationals emphasise the need to offer high-quality services, regardless of who provides them. The reality is often far more complicated: nationals frequently develop their work through local management committees and are increasingly trying to work in partnership; locals do not always deliver the user involvement and social capital they aspire to. Commissioners can resolve these tensions by highlighting the importance of local connections in their service specifications.

7. Local involvement

The sector's involvement in local planning has grown significantly since the introduction of local strategic partnerships that bring together the public, private, community and voluntary sectors at a local level. Local infrastructure organisations play a leading organising role in most areas, as well as being active members of LSP boards themselves.

In York, for example, Colin Stroud of the local CVS chairs an LSP board and has chaired the local area agreement delivery board. Chief executives of infrastructure organisations generally welcome the chance to sit at the top table, but this can be time-consuming, so they can find their resources stretched.

8. Personalisation and individual budgets

According to Paul Farmer, chief executive of Mind, personalisation of services is both an opportunity and a threat. The move towards individual budgets - the Department of Health initiative to give people who are receiving care or support more independence - could help disabled and older people live independent lives, but replacing the relative security of block contracts with the vagaries of market demand could be risky.

Lord Victor Adebowale, chief executive of social care charity Turning Point, described it as "moving from acting as a wholesaler for public sector agencies to being a retailer for individual members of the public". As well as spending more on marketing, organisations will have to embrace cultural change, adopt a more person-centred approach and get used to charging for services.

9. Member and user involvement

Member organisations are increasingly using co-options, sometimes mediated through a nominations committee, to achieve balanced representation and the right skills mix. There is growing recognition of the value of involving users directly. Representation on the board, with appropriate support and training, is one way of getting users' voices heard; interview panels and advisory groups are others. But my interviewees were keen to stress there was no point in developing these approaches unless users' views were actually listened to and acted on; tokenism was perceived as worse than doing nothing.

10. Funders' strategies

Apart from increasing financial worries, the biggest challenge facing foundations was how to make the most of their freedom and independence. Focusing on filling gaps, adding value and exploring new areas was seen as one way of doing this. But foundations said they were also seeking to increase their impact by influencing policy, whether that involved passing on the lessons they learned from funded projects to policy-makers, or building the capacity of organisations to get their voices heard.

Next week

Commissioning dominated the discussions, and in next week's Third Sector I will examine the ins and outs of this aspect of the interviews.

Richard Gutch is an associate at third sector recruitment agency ProspectUs

STRUCTURE OF THE SURVEY

Richard Gutch, an associate at recruitment agency ProspectUs, interviewed more than 100 third sector chief executives over several months earlier this year. The organisations involved covered areas ranging from health, social care and disability to children, funding and local infrastructure. Interviewees came from both large nationals such as Barnardo's, with its £215m annual income, and smaller organisations such as Voluntary Action Manchester, which brings in £200,000 a year. The interviewees were not representative of the third sector as a whole, but their opinions were considered to give an important snapshot of chief executives' priorities.

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