Craig Dearden-Phillips: Stormy times ahead for charity leaders

Intense competition from mission-based businesses and public service mutuals means the future is up for grabs, writes our columnist

Craig Dearden-Phillips
Craig Dearden-Phillips

What will it take to be a successful third sector chief executive or top leader into the 2020s? How are we going to find and nurture these people? And how are we going to sustain them so that they a) stay in their jobs and b) succeed in making a proper difference?

These are the questions I am seeking to answer in a forthcoming book.

My starting premise is that the world has changed forever for charities. And it is my view that without investment in leadership the sector risks becoming, if not extinct, a fading heartbeat in the life of our society.

What are the storms to be weathered? First things first: it's NOT just about the money, about which much (too much?) has been written.

Indeed, the money question – now resolved; it's gone – distracts us from more immediate and interesting leadership questions, such as how do we better use the money we already have?

Equally pressing (and mostly unwritten about) is the reality that the third sector is now flanked by intensive competition. There is no monopoly, any more, on being a "for-good" organisation.

What does this competition look like? Snapping on one side are "mission-based businesses" (123,000, according to a recent report) that claim to be just as good at achieving social good as charities. More of our young talent, and the investment they attract, is heading in this direction rather than through the doors of our traditional charities.

The choice between business and charity is not so binary any more. People like me, who joined or set up charities 20 years ago, are just as likely to set up private businesses to do good. One of these, a dementia support business called Unforgettable, has just received an investment of £2.5 from the social investment company Bridges Ventures, to grow its high-impact services for looked-after children.

How we work with these new businesses and learn from them is the real question facing the chief executives of the 2020s.

Harrying us on the other flank are new types of social business with roots in the public sector. Best-known are the public service mutuals, but every year hundreds of new social-purpose businesses, often owned by public authorities, are being set up.

One example is Achieving for Children, owned by several councils and now running children's services in multiple locations, using its scale and public sector links to keep the likes of Barnardo’s and Action for Children at bay.

Piled on top of all this are a host of stubborn, well-documented problems around public confidence, governance and culture. All of these create a sense that the sector's better days are behind it.

But the future of our sector is, in my view, up for grabs. Yes, we could accept a narrative of managed decline, but that would be to give up on a sector with amazing leadership talent, resilience and creativity.

What might this future look like? As part of my research for the book, I am speaking with 40 real-life (not "super-hero") third sector leaders: chief executives, chairs, founders and influencers. Many of these are part of Social Club, a new network of enterprising chief executives and leaders.

Crucially, I will be looking closely at the vital ingredient of leadership. Success in the social sector is rare and hard-won. It requires confident, highly skilled and resilient leaders who can stay the course.

The book will explore how we can identify, attract, nurture and retain third sector leaders of the required calibre into the future, particularly as other sectors offer tempting opportunities for social impact.

A big message will be that the time has come for the third sector to invest properly in leadership. Indeed, that without this the game might be up.

This is because, with noble exceptions, the third sector's approach to leadership development has been penny-pinching, outdated and unprofessional compared with other sectors.

We all have to act. My small contribution has been to establish Social Club, a place where leaders can come to grow, learn from all sectors and enjoy the support and fellowship of others.

So we face a long, winding road ahead. That this road will lead to success is actually a matter of choice. My aim will be to set out to chief executives and future top leaders key insights into what they need to do to ensure the third sector delivers its promise to society into the 2020s and beyond.

Craig Dearden-Phillips is the chair of Social Club. His book, How to Change the World: The Essential Guide for CEOs and Future Top Leaders, will be published in the autumn by Turnpike Press

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