Investing in caring

The UK’s system for funding voluntary sector organisations is
holding back staff and services, says Anna Coote. We should look at
copying USideas of funding the “third sector.”

To those who have, more shall be given. Take a look at the
courses on offer from Harvard or London business school, or any
similar establishment. And the prices. You will see how much
corporations are prepared to invest in extending the learning and
skills of their employees. And there is a fairly simple correlation
between the status and pay of an individual, and the cost of
training on offer for staff at that level.

In the public sector, too, training opportunities tend to be
piled up on the side of the better paid managers and professionals.
Unskilled and semi-skilled workers are far less likely to get sent
on a course of any kind. If they are, it will almost certainly be
shorter and cheaper than those attended by more highly qualified
staff. And of course, the more training you receive, the higher the
salary you are likely to command in future.

The assumption that it is worth investing more in higher status
workers widens the gap between the haves and the have nots. There
are some interesting exceptions, though.

Take members of parliament. They arrive at Westminster, expected
to be representatives, legislators, scrutineers of government,
advocates, counsellors and social workers all rolled into one. Most
have few if any relevant skills and find they are expected to pick
things up as they go along. This may help to explain why backbench
MPs so often come across as bumbling fools, and why politicians in
general are held in such low esteem. Training? Forget it.

Those who work in social care are at least one step ahead of the
parliamentarians: there is some recognition that learning for the
job is required. But here again, those with fewer qualifications
tend to have fewer opportunities to improve themselves.

However, it is in the ‘”third sector” where we find the most
serious deficit. Most people who work for voluntary organisations
must learn by doing. The average small- to medium-sized non-profit
body is chronically starved of resources. It can barely manage to
keep itself going year-on-year, let alone pay for staff
training.

The culprit is the ethos of third-sector funding. Government
money is available for various local schemes and contracted-out
services, but it is highly conditional, competitive and
time-limited. Grant-giving foundations tend to favour projects over
organisations, innovation over consolidation and short-term over
long-term funding.

So voluntary groups are on a treadmill – dreaming up projects,
preparing proposals, begging for and sometimes getting grants,
spending them, dreaming up more projects – and so on, limping
exhaustedly from crisis to crisis. This is not a regime to
encourage the development of knowledge, skills and capabilities.
And who loses? The very people they are trying to help, who include
the neediest and most vulnerable members of society.

We should learn from a new breed of donors to the third sector
who call themselves venture philanthropists. The idea comes from
the US and is less than a decade old. It is a new way of
transferring resources from the super-rich to disadvantaged
communities. But it is a far cry from traditional charity.

One example is the Boston-based New Profit Inc, established in
1998. Based on the model of a venture capital firm, it focuses on
social rather than commercial enterprise. It seeks out charismatic
individuals with promising ideas for meeting social needs, and
non-profit organisations with potential to grow and flourish in the
long term.

It then provides financial backing for core functions (not
projects) for at least five years. More importantly, NPI develops a
close relationship with its clients, actively building their
capacity to manage and expand, offering technical assistance for
things like personnel, business planning and communications, and
agreeing rigorous performance targets.

It pitches to investors by telling them they will get more
philanthropic bangs for the buck: they can help select the
beneficiaries, mentor social entrepreneurs and see their
investments flourish through active portfolio management.

Similar innovations are proliferating across the US. The central
idea is that giving money to the third sector carries with it an
obligation to develop the learning and build the capacity of
organisations that rely on grants and those who work in them – paid
staff and volunteers.

In the long term, that is far more likely to produce positive
social results than simply funding projects on an ad-hoc basis.
There are signs that the idea may be taking root in the UK.

A new organisation, unLTD, set up to administer the £100
million legacy of the Millennium Commission aims to develop a
“social venture fund” along these lines. Let’s hope it will begin
to change the culture of charitable giving and help to boost the
learning opportunities available to those who work in non-profit
enterprises.

Anna Coote is director of public health, The King’s
Fund.