Craig Dearden-Phillips: How we've broken out of our secret garden

We've moved on from the informal charity sector that existed 20 years ago to embrace values from other sectors, and things will look even more different in another 20 years, writes our columnist

Craig Dearden-Phillips
Craig Dearden-Phillips

It is 25 years since I first walked through the doors of a charity and met its director: a kindly, thoughtful man who wore a cardigan with a CND badge and was clearly a man of God and of the left.

Four years later, in 1996, when I took my first chief executive job, being a third sector leader was still quite a straightforward job. You had normally joined a "charity" (there were no "social enterprises" back then), and the charity world had its own quite distinct way of working – friendly, informal, values-driven – and was quite separate from either the public or private sectors. Income came mostly from grants or donations from a few foundations or the general public (this was, just, pre-National Lottery). A few commercial partnerships existed but this was before full-on corporate social responsibility, so nothing on the scale of today’s big-brand charity hook-ups. The third sector had the feel, back then, of a secret garden, walled off from the forces either of private sector commercialism or public sector managerialism.

Wind forward 20 years and the third sector could not be more different. The secret garden is no longer. Not only have our walls been breached and our flowers trampled, but we’ve been clambering into other gardens too: the public and private ones, changing them as we go. We are now in a place where the main sectors now overlap. You can see right over the walls and, on some days, you don’t notice them at all. So the private sector now competes for the best young talent based on the good the company does on top of its profit-making. And the public sector now enlists community organisations and its tools of engagement in its own efforts to touch the hardest-to-reach in its own communities.

As for the the third sector, we have borrowed a degree of managerialism and commercialism from the two other sectors that would have been considered beyond the pale only two decades ago. Not only do we now see commercial financing of social projects, but also the deep alignment of commercial players such as Facebook’s Mark Zuckerberg with explicitly social purposes.

On so many levels – funding, management, ideas – we have seen a significant degree of convergence between sectors. As a result, people move more freely between them than ever before. This is not only partly because our sector has aped the other two, but also because the other sectors have become more like us. A large recent study of "millennials" (people born after 1980 and before the turn of the century) shows, time and again, that this group is qualitatively different in its approach to work, money and life. In short, they want to do well and do good. A dinner I went to recently saw the chair of a "big four" consulting firm say that it could no longer attract and retain the brightest and the best without offering significant opportunities for putting something back. Otherwise, these people were leaving to join companies with a greater sense of social mission, this chair was saying. I'm a member of Generation X, where the deal was to take the money and climb the pole, so this felt very different to me. But it’s happening and it has huge implications for our sector.

Should we celebrate the end of the secret garden or mourn its passing? I personally am pleased by the evolution of the sector from a very small, very pure place to one whose purposes are now animating other sectors. I also welcome the modernising forces that both private and public sector imperatives are bringing to a sector with a tendency to stay in a comfort zone. By this I mean in particular the drive for new forms of commercial income and the powerful competitive challenge our charities and social enterprises are now making in the realm of public services and social sector innovation. While I loved the CND badges and the wonderful sense of separateness, I knew also that we were, in the early 1990s, marginal as a sector and, as today’s diverse, web-enabled society evolved, becoming decreasingly relevant. Therefore, I welcomed convergence and, as a chief executive, took every opportunity to clamber the secret garden’s walls into other gardens as well as helping outsiders hoist themselves over into ours.

So what will the sector look like in another 20 years? Who will be its chief executives and how will they operate? Three things feel very clear. First, we will see a generation of top leaders in our sector who have worked in other sectors. There are growing numbers today, and I believe "cross-dressers" will be the norm very soon. Indeed, not to have worked first in another sector might well soon be viewed as a handicap.

Second, this next generation of chief executives will bring with them a modernising zeal that has so far evaded most charities in terms of new ways of working, the role of technology and the empowerment of staff. Being in a charity today still often has a feel of the 1990s about it: desks piled high with papers, byzantine management structures and glacial decision-making. This will all go pretty quickly when the current generation of chief executives and chairs retire, I believe.

Third, we will see a much more ambitious level of commercialisation in the third sector as charities make full use of their relationships with large companies to leverage their mission many times over. This might take the form of far bigger alliances with companies around progressive programmes of social action, or simply the natural extension of mission-based businesses into the public services arena.

However things pan out, the third sector of 2037 will look unrecognisable next to the cardy-wearing sector many of us remember just 20-odd years ago. Being a chief executive within it will also be an entirely different challenge, but one that will, I hope, attract and retain the brightest and the best from across the full span of society, from all three gardens. Which, by then, might be only one.

Craig Dearden-Phillips (@deardenphillips) is managing director of Stepping Out, which exists to help third sector organisations to grow their missions

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