Charities face up to stark commercial reality

The future for many children’s charities is uncertain. Growing demand for services, reduced donations, higher costs, increased competition for grants and the cost of tendering for contracts are all putting a strain on staff and volunteers.

To ascertain the true state of the sector, the membership organisation Children England has compiled a report based on interviews with more than 50 voluntary and community sector leaders and local authority staff.

Kathy Evans, co-author of the Perfect Storms report and policy director at Children England, believes a national debate is sorely needed on the role of the voluntary and community sector, arguing that too many children’s charities are surviving on a “precarious” mix of public fundraising activities and grant or contract income.

She says children’s charities that relied on public sector funding before the recession are being forced to explore other ways to secure income: “A lot of charities have returned to the skills of trying to raise funds through voluntary income, such as donations, charitable grants and fundraising events. A successful future for a children’s charity may be about providing an independent, complementary service, rather than taking over a public service. But if your head is down managing redundancies and working out the detail of budgets, it’s very difficult to maintain a clear communication route to the outside world.”

Maggie Jones, chief executive at Children England, says charities appreciate the government’s commitment to encouraging the voluntary sector to run public services, but warns: “The way this is playing out both in localities and large national contracts isn’t currently working. Charities have long played a vital role in supporting society’s most vulnerable, but their position in the welfare system should not be taken for granted.”

Extra responsibilities
Jeremy Cripps, chief executive of Children North East and a member of Children England, says his charity is dealing with more clients than ever before. However, income is down due to a reduction in grants and contracts being “pared back”.
Meanwhile, higher thresholds for some local authority services mean the charity is taking on the “lead professional role” in a number of cases – co-ordinating various support services for families – something that Cripps claims would have been “unthinkable” two years ago.

There are now questions over whether volunteers are taking on too much responsibility. “We are beginning to ask ourselves what level of complexity it is reasonable to ask a volunteer to work at,” he says. “It becomes less rewarding for the volunteer as they carry more responsibility, which really isn’t right for people who are unpaid. It is a debate we are beginning to have, but it would be morally wrong of us to say to people that we can’t help them because they don’t meet our criteria.”

To generate income to employ staff, the charity is increasingly seeking to provide intensive services on a one-to-one basis with families. The charity has worked out how much it costs to support individual children, young people and families with complex needs – and is marketing the service “strenuously” to local authorities.

It is also planning to offer support services to schools in the North East that have taken responsibility for exclusions, including work with children that have high absence records.

“We are shifting to a much more commercial model,” Cripps explains.

Tim Jeffrey, chief executive of Spurgeons, which works with children living in poverty, says his charity has improved its internal infrastructure, creating a successful tender bidding team and shifting its income generation from grants to contracts. However, Jeffrey says the complexity of contracts can cause significant issues. The charity took on 164 staff from 10 organisations in April, increasing total headcount by more than 30 per cent. But the varying terms and conditions of staff inherited from predecessor organisations have posed HR challenges because of the Transfer of Undertakings (Protection of Employment) regulations (TUPE).

“It seems that all tendering processes are different. It would help if there was a more common framework allowing you to use standard bits of information and transfer them across,” Jeffrey says. “We have got to do something about TUPE as well. If the coalition wants organisations like ours to keep taking on the delivery of services that are increasingly coming out of public sector control, we are not going to be able to match terms and conditions. TUPE is a big stumbling block.”


‘Perfect Storms’ report