Craig Dearden-Phillips: Charities should reach out to social entrepreneurs

Many charities these days are looking for people with innovative ideas, but should be wary of trying to grow their own, says our columnist

Craig Dearden-Phillips
Craig Dearden-Phillips

Indeed, most chief executives I know wish their organisations could respond with more imagination and flair to changes in their marketplace. So why are so few charities capable of walking that talk? And how can charities raise their own level of entrepreneurial verve?

On the first question, most charities struggle to become entrepreneurial because their scale and culture militates against it. This isn't unique to charities, of course: corporates and public sector bodies also find it hard to pivot in the face of big changes in their environment.

This is because entrepreneurialism cannot be hard-wired easily into an organisation in a way that can address problems such as quality or customer care. It is possible to reboot a charity to function better, but it is harder to engender the traits needed to revolutionise the sector so that a charity operates or responds to old problems in an entirely new way. In short, you can't teach an elephant to breakdance.

Plus, of course, entrepreneurs cause pain to large organisations. Think about it: most entrepreneurial breakthroughs are disruptive. They destroy existing products and services by superseding them. They leave organisations with huge fixed costs to unravel, staff to fire and complicated change to manage. Would UK charitable organisations, committed rhetorically to entrepreneurialism, be willing to embrace its possible consequences for their current work?

So - to move on to the second question - if charities are not adept at entrepreneurship and are wary of its consequences, what should sector leaders do? First and foremost, they should avoid the fallacy of 'grow-your-own' entrepreneurs. No entrepreneur worthy of the name will join a big, clunking organisation: they know that their ability to create value is linked to their freedom from organisational constraint. 'Intrapreneurship' - as some call it - is, to me, business school claptrap.

The best thing charity chief executives can do is to nurture entrepreneurs outside their own organisations - yes, reach out. The UK is blessed with thousands of brilliant social entrepreneurs, but our larger charities mostly either ignore them or spend heavily on their own paler versions. Would it not be far better for the major charities to nurture independent social innovators in their own sectors - usually small charities - and then sponsor their moves to scale by using their own skills as volume providers?

Will this happen? At the moment, the charity sector looks to me like two sectors: one tired, ossified, inward-looking and a bit beaten; the other smaller, more entrepreneurial and largely unconnected to the larger whole - but lacking in wider impact. Each could benefit from the other: it's up to you what happens next.

Contact Craig, who writes in a personal capacity, at www.stepping-out.biz.

Craig Dearden-Phillips is managing director of Stepping Out and a Liberal Democrat councillor in Suffolk

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