One of the sector’s premier sources of income, the Big Lottery Fund, will be the centre of attention this week when it announces a strategic plan for England that includes some significant new priorities.
The fund’s chief executive, Peter Wanless, says it has sometimes made a virtue out of being a reactive funder, and will continue to distribute amounts to disparate groups. But now it also wants to focus on some key social problems and beneficiaries.
"In the past, the sector has said to us ‘we have needs, let us tell you what they are,’ and we’ll continue to respond to that," says Wanless. "It would be easy just to distribute cash to good causes. But with resources shrinking everywhere, there’s an onus on us to make the biggest difference we can."
More than £700m of the fund – almost half its income for England for the period from March 2012 to March 2015 – will be allocated to four cause areas: babies and very young people in deprived areas; young people out of work; adults with complex needs; and older people at risk of isolation.
"These are very stubborn problems," says Wanless. "We believe that allocating lottery money can address problems in a way that government departments cannot, and in a way that third sector organisations, however good, cannot do on their own."
He says the programmes – developed with input from the sector, other experts and beneficiaries themselves – are targeted at deprived areas and designed to encourage partnerships led by the sector while involving all interested stakeholders.
They are also intended to find long-term solutions. "We haven’t got annual budgets or a three-year spending cycle," he says. "We can aim at the long term, engage the right people and keep working on something until we solve it. Our funding plans cover periods of between three and eight years."
He says there will be an emphasis on impact measurement by both individual organisations and the programmes as a whole. He also wants the BLF to collect evidence of its own impact, make it widely available and use what it learns to ensure that future interventions are conducted with more knowledge.
"We’re going to commission very significant pieces of learning looking at the impact and economic returns of these investments," he says. "We don’t just want to demonstrate that some money has been spent and that something has happened. We want to have sufficient information to show future commissioners that there’s a different way of doing things – that there’s a way of working that involves communities and puts the third sector in the driving seat.
"It’s not enough to show that you did something. You have to show that what you did is better than anything else you could have done. We want to find out what works. Then we want to go to government and say: ‘this is what works, you have to fund this.’"
Wanless is not averse to working alongside government. "We aren’t independent," he says. "We’re subject to government policy directions – although it’s very helpful when Third Sector readers emphasise the importance of our independence.
"You could argue that the government and the lottery have sometimes been too precious about doing different things. But when there’s an outcome we both desire that costs the exchequer vast sums of money, we should ensure that the load is shared between the government and us.
"In fact, the last policy directions from the Cabinet Office were very freeing. Perhaps because of the fuss about Olympics money, both Labour and the coalition have been very respectful of the lottery’s place at arm’s length. Long may it continue."
The one new policy direction from ministers concerns social investment. Wanless says this is an area of interest the BLF has in common with the government. "We were on to the potential of social investment long ago, and we were major backers of the social impact bond pilot in Peterborough prison," he says.
"Creating more sources of income for the organisations we fund is a matter very close to our hearts. We’re very keen to unlock its potential. Some of the recipients of our grants could access social investment instead, and that would leave us with more potential to fund areas where social investment isn’t as suitable.
"We will set up several funds. We want to be a presence for quality in areas such as payment by results, which might otherwise be structured just to save the government money."
And what about the return to the fund of the £425m the government borrowed to help fund the Olympics? "The government has been clear that the majority of money will be released following the sales of land and assets," he says. "We expect to get it back in the 2020s.
"But the expectation is that the sale of the Olympic Village will release money which will be with us in 2014. If we know that is coming, we don’t need to wait for it to arrive. We can already start to commit it to great ideas."
- Peter Wanless is a regular blogger for Third Sector. Read his blogs