How should the sector deal with the hard times ahead?

Members of the Third Sector Austerity Watch panel put forward their three key points.

TOBY BLUME - CHIEF EXECUTIVE, COMMUNITY CHARITY URBAN FORUMToby Blume

- Don't rely on the Localism Act to save your charity

The Localism Act has the potential to be a saviour for some organisations with the introduction of community rights. But it relies on intelligent commissioning, which is often not in evidence. It won't come into effect until April and the time gap is too big for many charities to hang in there.

- Community organisers can identify common concerns

The community organisers programme is up and running and will be important for identifying common issues around which communities can coalesce. A bit of creative disruption is needed.

The downturn makes the case for a financial transactions tax

The state of banking, the financial markets and the eurozone crisis all increase the potential for a financial transactions tax - a 'Robin Hood' tax - which would be a good thing.

DAME MARY MARSH - DIRECTOR, CLORE SOCIAL LEADERSHIP PROGRAMMEDame Mary Marsh

- The economic situation affects charities in very different ways

The unevenness of the downturn means organisations are experiencing it in vastly different ways. Some people are doing all right while elsewhere there are some huge holes emerging - at Women's Aid, for example.

- Merger is not the answer, but collaboration is needed

Collaboration is a major issue. I have never been convinced mergers are the right answer, particularly in a financial crisis, unless there are strategic synergies. But cross-sector collaboration ought to be increasingly important, though I don't think we are good at it yet.

We need to create more opportunities for staff development

People are seeing the advantages of developing their staff, but career progression is locking up because spaces aren't appearing.

CATHY PHAROAH - PROFESSOR OF CHARITY FUNDING, CASS BUSINESS SCHOOLCathy Pharoah

- Philanthropic fundraising is not the be-all and end-all

Everybody is leaping on the potential of funding from philanthropy, but it is a zero-sum game unless you can increase the size of the cake with something major like the Robin Hood tax. A lot of money has been wasted on investing in philanthropic fundraising without developing new approaches.

- Be cautious about rushing into social enterprise

Social enterprise is the other new bandwagon that everyone is jumping on, but we need to be careful about the implications of this enthusiasm.

- Wake up to the impact of the economic downturn

The sector is still doing too much navel-gazing. It isn't taking on board the changes to the economy and how it is going to have to relate to people in different ways.

HELEN SIMMONS - FINANCE DIRECTOR, DIOCESE OF LONDONHelen Simmons

- Be aware of all the issues involved in budget planning

Inflation is going up and income is going down, so there is a double impact when it comes to planning budgets. There is also rising inflation and utility costs are rocketing. There is a sense of 'creep' as all these things have an impact.

- There is no point in measuring the impact of the big society

The audit of the big society that is taking place worries me. I have never been convinced about the big society. It seems like smoke and mirrors; I don't know why we are trying to measure it.

- Interns cannot replace the work of volunteers

I'm getting increasingly concerned about volunteers. Money for volunteering has been taken away and I'm getting worried about interns and the fact that a lot of people don't understand the difference between them and volunteers.

UDAY THAKKAR - MANAGING DIRECTOR, RED OCHRE CONSULTANCYUday Thakkar

Mergers made in weakness don't help anyone

Many organisations are panicking into mergers. These are not mergers made in strength but in weakness. We have been involved in seven in the past nine months, but not one has come off. As soon as people have looked each other in the eye, they have realised they might pull each other down.

- Social enterprise means a change of culture

There is also panic about entering the social enterprise realm. Some believe it to be a magic bullet, but it involves a change of culture, a different mindset and new ways of doing things.

We have to understand how to interest corporates in helping charities

More corporates are being approached for funding without an understanding of their motives or timing cycles. They don't do it because they believe in a cause but because they get leverage out of it. They want to support charities only because they are tax-efficient.

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