Leadership of any organisation has been exceptionally tough over the past 12 months. We slid into this bath-shaped recession very rapidly last year and now we are working our way along a rather long, bumpy bottom. These are testing times as we look forward to where we might be at the end of 2010.
For the new Clore Social Leadership Programme, we have created a framework of the key qualities and competences for third sector leadership. One part of this focuses on how we assess the context. Sensing the situation effectively is now a critical skill for third sector leaders.
Many parts of the wider context are in flux. Seeking to understand possible external scenarios is like trying to complete a jigsaw with parts of a number of different puzzles mixed in together. And as we focus on our direction and the actions we have to take, we need to remember that the most dangerous decision we are likely to make is to not make a decision at all.
After the general election, if not before, there must be radical change. It will be impossible to protect the status quo because sufficient resources simply will not be there. We have already felt the impact of the financial crisis through reductions in investment income. Voluntary donations have held up remarkably well so far, but the signs of decline are evident and this is likely to worsen as unemployment rises. Public sector funding will reduce significantly, most likely reversing much of the increased share of national income that the third sector has benefited from over the past decade.
The third sector is seen as a high priority by the main political parties and the devolved administrations, and this is likely to continue. But the consequences of what will need to be done might well be different from the sometimes rosy view they have of the scale of local community and voluntary activity.
Effective engagement with the real needs of communities can be a gritty and tough process. As demand grows, prioritising where to invest is hard. Volunteer labour is far from free and must cost more if we are to recruit, support and properly accredit the contributions that people make with the gift of time, energy and expertise. We also need to be ready to maximise the use of social finance and learn from the innovative practice of many social enterprises.
There are opportunities amid all these challenges. The important thing will be having the leadership capacity to anticipate them and the confidence and appetite for risk to seize them.