The first phase of a strategic review at CAF has not run smoothly, with stalwarts and key personnel leaving and sector insiders questioning the changes. Will the second phase fulfil CAF's aims? Emma Maier reports.
The question on everyone's lips, it seems, is "what is CAF for?" The charity's doubters level the question as a criticism. "I'm not sure it passes the test of 'if it didn't exist, would you reinvent it?'," one source told Third Sector.
Meanwhile, CAF's shiny new board of directors, drafted in after an exodus of six key figures, sees questioning each and every part of the charity's business as an important and positive step on the road to a new, improved organisation.
"We have a responsibility to ensure CAF adds value, which means asking questions such as 'what's it doing well? What can it do more of? Can someone else do it better?'," says Andrew Jones, who was appointed executive director of external affairs after Simon Hebditch left to head Capacitybuilders.
The spotlight fell on CAF's purpose during the past year as it haemorrhaged directors, culminating in the loss of chief executive Stephen Ainger last week. However, the questions have been developing for much longer.
CAF was set up to "encourage more efficient giving to charity". It developed many ways of doing this, from highly respected research into giving and charity trends to providing services for donors. Under the leadership of Michael Brophy in the 1980s and 1990s, its remit broadened into financial services and international work.
For some, the resultant organisation is a strong family of companies working to deliver that initial aim. For others, the range of activities that the charity is involved in have muddled its purpose rather than fulfilling it. "CAF seemed to be drifting - there were things it did that you could never see rhyme or reason for, such as its international work," explains the source. "It was a rather esoteric creation."
It was into this situation that Stephen Ainger stepped when he joined CAF as chief executive in 2002. "Everyone saw that it was time to take CAF on to the next level, and I was brought in to do that," he says. "CAF helps individuals and companies give £277m a year, and we reckon we add about £70m of benefit a year to the sector through higher interest rates and lower charges. So although we're very much a charity, we needed to offer a professional service. A big chunk of the task was to become as businesslike as possible."
A strategic review
Ainger initiated a programme of change that involved replacing most of the charity's back office systems, including the banking systems, redeveloping its website and looking for new opportunities. This culminated in a strategic review. The first stage of this, which was completed in June, was a review of stakeholders' views about CAF and of the giving landscape, conducted pro bono by management consultants McKinsey & Company.
All this did not happen without hitches. Some of the back office system replacements went over time and budget, although Jones refutes one source's suggestion that the overspend may have reached between £1m and £2m. The process also unsettled employees - in a staff survey, 70 per cent said they would not recommend CAF as a good place to work. Jones declines to confirm or deny that one employee's complaint went to an industrial tribunal.
By September 2006, six key figures had resigned. Among them were Jenny Byers, executive director of donor services, who joined CAF in 1979, and Cathy Pharoah, who had built the reputation of CAF's research unit over the past decade.
Ainger insists that some of these changes could not be avoided. "Some people moved on for career development reasons, and I celebrate the fact that organisations are poaching our senior team - it's healthy," he says.
"When you do a strategic review, it always leads to a certain level of uncertainty, no matter what you do. Even if you say 'we're not doing anything fundamentally different - this is organic', there is some uncertainty, and that is hard for staff," he says.
There is a remarkable consensus from all involved on the need to revisit CAF's aims and make sure it is doing what it does best. Critics and departing staff are more concerned about the way the changes have happened.
Some have questioned Ainger's business background and values. "The approach Stephen adopted may have rubbed some people up the wrong way," admits Jones. "But so be it, and you could never say it was a bad thing."
But another source adds: "Personality clashes might not have helped, but there are bigger issues here. The change was focused on process, targets and hierarchies, and not at all on people, vision and mission. The extent to which you keep the balance between mission activity and developing the business was definitely an issue."
With the first stage of the strategic review complete, it is those issues that CAF now strives to tackle. "There will be a period of four or five months to answer some of the questions," says Jones. "We need to look at everything we do, and if someone's doing something better than us we need to decide what to do. Do we talk to them? Do we hand things over? Do we sell things? Do we take things over?"
The exercise could have far-reaching consequences - it could even mean the end of some of the projects CAF has pioneered. Some question the viability of parts of its work. "Its financial products have largely been handed over to Charity Bank anyway," says the first source. "And what happened to the research department was a disaster. It was a good department, but they've lost Cathy Pharoah and her deputy, and good researchers are hard to come by in the sector. Cathy made CAF's research's reputation largely independently of CAF and will make it on her own. Who will rebuild the facility?"
Business as usual?
Ainger is quick to emphasise the importance of research. "It is fundamental to CAF's work," he says. "The work understanding tax-effective giving, charity trends and so on is fundamental to communicating with the Government about the future of giving and how important it is in building civil society. Without the research, you can't comment."
The strong performance of Venturesome, the reputation of CAF's research work and the fact that it has 20,000 charity clients and works with many of the FTSE top 250 companies and scores of donors, all reinforce the value of its work. CAF is forging ahead with that existing work, and more, despite the strategic review. Projects include new insurance products and comparative research on giving trends in the UK, Europe and the US.
Continuing to run business as usual, launching new products and research, and taking forward the second stage of the strategic review will require strength of leadership - Ainger's sudden departure doesn't help. But, as unofficial deputy chief executive for the past four years, CAF's finance director and newly appointed interim chief executive Tony Rogers is in a good position to take things forward. "He is well-briefed, aware of all the issues and is more than capable of handling the reins," says Ainger.
Rogers is scheduled to stand in while the charity searches for a chief executive. This is expected to take at least six months - about the same time as the next stage of the review, meaning that the new incumbent will implement the agreed changes.
One source suggested that Venturesome director John Kingston or Rogers himself might apply for the post. Former Institute of Fundraising chair Kingston has an impressive track record - the MBA graduate boasts a career spanning the sectors, including investment bank the 3i Group and Save the Children, as well as experience in marketing, fundraising and finance.
Rogers will also be well placed after six months at the helm, having already been intimately involved in the review's earlier stages.
However, the question may be not so much who is equipped for the role, but who wants to take it on. "I don't see anyone of any experience wanting to run it," says the source. Indeed, when recruiting for Brophy's replacement in 2002, CAF relied on headhunters rather than waiting for candidates to come forward. Applications in writing to CAF, West Malling, Kent.
- See Editorial, page 13
1920s: CAF starts out in 1924 as the charities department within the NCVO, set up to encourage more efficient giving to charity
1950s: It is named the Charities Aid Fund in 1959
1960s: In 1968 the fund publishes the first ever Directory Of Grant Making Trusts
1970s: It becomes an independent charity called the Charities Aid Foundation in 1974. In 1977 it publishes Charity Statistics, a forerunner of Charity Trends, marking the start of CAF's research programme
1980s: CAFCash, a bank account for charities, is launched in 1986
1990s: CAFAmerica is set up in 1992. Sister organisations in Russia, Bulgaria, South Africa, India and Australia follow
2000s: In 2002 CAF launches Charity Bank and appoints Stephen Ainger as chief executive; Michael Brophy leaves after 20 years' service. Ainger's change agenda leads to the 2005 strategic review. Executive director of external affairs Simon Hebditch is among five executive directors and one director to leave CAF in 2005/06. In October 2006, Stephen Ainger resigns and finance director Tony Rogers takes over as interim chief executive
THE MAJOR PLAYERS
A former energy industry executive, Ainger joined CAF as chief executive in 2002 with the aim of modernising the organisation. He oversaw the launch of National Giving Week, the expansion of CAF's payroll giving offering and the first stage of a strategic review.
The role was Ainger's first in the voluntary sector after his career in business, most recently as group director of strategy for energy infrastructure provider the Lattice Group, and before that as a director of Transco.
He also had a number of different roles at BP over 24 years.
Hebditch left his job at CAF in 2005 to become chief executive of Capacitybuilders, having earlier chaired the consortium that drew up the business plan for the ChangeUp programme's Finance Hub.
As executive director of external affairs, he had been responsible for strategic planning, including reviews of the economic and social trends affecting CAF's vision and businesses.
After a career mainly in the voluntary sector, including senior positions at the NCVO, Mind and Age Concern, Hebditch is reported to have acted as a close adviser to Ainger.
Rogers was called in to act as interim chief executive following Ainger's departure. Internal and external candidates will be considered for the post, but it is unclear whether Rogers will apply.
As finance director, he has acted as unofficial deputy chief executive, on top of his financial management responsibilities at CAF, which include creating economic solutions for its financial services. He joined CAF in 2000 after a career in financial services spanning 25 years, most recently with German financial services firm Bankgesellschaft Berlin AG. He started out with KPMG in London.
LORD SIMON CAIRNS CVO CBE
Best known in the voluntary sector for his role as trustee of the Diana, Princess of Wales Memorial Fund, Lord Cairns joined CAF as a trustee in 2003. He took over from Sir Brian Jenkins as CAF chair in the same year.
Cairns, who is not a member of the House of Lords, has had a career in the banking, public and voluntary sectors, including time as chief executive of investment banking firm SG Warburg, receiver-general of the Duchy of Cornwall and chair of VSO.
Cairns and CAF's board of trustees reportedly backed Ainger's change agenda.