Thursday, January 31, 2008

Charitable giving: international league tables and support for the arts in the UK

It was depressing to read USA Today report how badly European countries – including the UK – compare with record levels of charitable giving in the USA.

Last year Americans gave nearly $300 billion to charitable causes - a record exceeding the 2005 total that had been boosted by a surge in aid following Katrina and the Asian tsunami.

A Charities Aid Foundation study in 2006 found that philanthropic giving as a percentage of gross domestic product, put the US first at 1.7% with the UK second on 0.73%. (That compared well with France’s 0.14%!).

There was good news yesterday from Arts & Business who have found that the private sector is putting more money into the arts than ever before. The total amount of private support for the arts has grown by 11% to £599 million.

I do wonder how the interest in corporate social responsibility will weather increasingly uncertain and stringent economic times. However Arts & Business are highlighting the tax incentives to give.

Wednesday, January 30, 2008

Time to repeal some laws of unintended consequences?

A lot of those who moan about red tape (including clumsy and heavy over-regulation in public services) talk about the compliance costs (eg the former Better Regulation Commission’s first aim was in relation to “unnecessary regulatory and administrative burdens). There is less discussion of the nasty effects in the form of unintended consequences.

Stephen J. Dubner And Steven D. Levitt, the authors of the economics best-seller Freakonomics, have written a well-argued article about how the most powerful law is the law of unintended consequences.

Too often policy makers are far more aware of market-failure than they are of regulation-failure. Hopefully they will read the article by Dubner and Levitt.

Friday, January 25, 2008

Tower of strength – mutualism in the 21st century

The end of the Tower Colliery in Hirwaun, Rhondda Cynon Taf, has been sad. However, the example of the successful (and profitable) co-operative running what was deemed uneconomic is heartening.

Looking forward, it was pleasing to read this week that co-operative schools might rival city academies as the model for raising standards in education according to the schools secretary of state Ed Balls. He welcomed plans for Reddish Vale Technology College in Stockport to become England’s first co-operative school and predicted “significant future potential for a co-operative model”. It is good that mutual options for public services are still on the reform agenda.

Thursday, January 24, 2008

The on social enterprise at the crossroads

This week’s notes the growing influence of social entrepreneurs. However, it goes on to observe:

In some ways, social entrepreneurship has reached a crossroads. As it has become better known, expectations have been raised; the next few years will show whether these expectations are justified and these social entrepreneurs can deliver. This will depend on them mastering the nitty-gritty of managing a growing organisation, including everything from a proper budgeting process and human-resource policies to succession planning and corporate governance.

While being innovative and challenging in some areas, the third sector has also been known to lag behind too – for instance in good governance. Getting that right is vital if social enterprises - and the third sector generally - are to be able to sustainably play a part in delivering public services.

Governance and diversity: an inspector calls in Norway - what can we do here to improve board diversity?

Things get serious in Norway next month. The Economist reports that public companies will shortly receive a letter informing them that they have until the end of February to act - or face the legal consequences (which could include being dissolved) - unless they ensure that at least 40% of their board directors are women.

A law passed in 2003 setting the quota has pushed board representation up from 7% to 36%. That compare with the UK’s figure of 11% tracked by Cranfield School of Management’s FTSE Female Index.

You might think that things were better in the public sector given the profile of equality and diversity. You would be right – but things aren’t OK.

According to a study last year by the Centre for Excellence in Leadership (CEL) only about one-third of Further Education college governors are women. (Studies suggest that diversity is poor in relation to age, ethnicity and disability too.)

Does diversity on boards matter?

The HR professional's institute, the Chartered Institute of Personnel and Development, says:

Diversity is ... the concept that people should be valued as individuals for reasons related to business interests, as well as for moral and social reasons. It recognises that people from different backgrounds can bring fresh ideas and perceptions which can make the way work is done more efficient and products and services better.

There is a strong case that diversity helps avoid groupthink.

What can be done by the public and not-for-profit sectors?

I would argue that the key is moving away from reliance on personal contacts and word of mouth – it still survives.

The CEL study mentioned above included in its recommendations:

* Open and Formalised Advertising of governor vacancies, with specific requirements on outlets used. Advertising should clearly specify the skills required to become a governor.

* Clear Messages in Advertising Material that ‘the college strongly encourages applications from all sections of the community’.

* Consider independent assessors on search committees who contribute to the screening, interviewing and assessing of applicants.

* Formalised Records on appointment decisions, which can then also be viewed in audit.

* Formalised induction and training procedures (especially on equality and diversity issues).

* Community outreach initiatives: to enhance applications from underrepresented groups, colleges should explore creative ways to reach out to local communities, consulting with students, staff and parents, for example, by focus groups and surveys.

Its findings also suggested that horariums for governors might be helpful. However, I would note that board remuneration can cause complications for diversity – particularly due to the anomalies and disincentives of the benefit system.

I would also stress the importance of organisations building links with networks in the community – rather than just the personal networks of existing governors.

Monday, January 21, 2008

Lessons from Ujima?

The demise of Ujima, the UK’s largest black and minority ethnic (BME) housing association has not had much coverage beyond some discussion in the Guardian and its blog (and, of course, Inside Housing). You might expect it to be bigger news – as Patrick Butler asks “Is this the housing sector's Northern Rock?”

For me Ujima raises three sets of questions:

1) How does this affect the social housing sector in the eyes of lenders? The Housing Corporation says that we do not need to worry. Yet this is the first housing association to go bust. Lenders are looking for safe harbours after the credit crunch. Is social housing as safe as they thought?

2) The related question – how good is regulation? The conventional wisdom (that I share) is that the Housing Corporation’s financial monitoring is generally good. Perhaps we need to check out lessons from Ujima. But we should not fall into the sloppy reasoning of presuming that because something went wrong therefore something was wrong. Bad things can happen even with good regulation.

3) Does this symbolise broader changes in thinking? In particular, why is the BME brand of Ujima being binned? What does this mean for organisational ethos? Over recent years “multiculturalism” has become taboo for much of the political class. Likewise, the discourse of cohesion has shifted towards an emphasis on the problem being inter-cultural ignorance rather than inequality and discrimination. For me, this was typified by the film American film Crash which I suspect was popular with British policy-makers. It seems to me contradictory and sad that when there is so much talk of co-production and community empowerment, black leadership and self-help seems to fallen out of favour.

Any answers?

Saturday, January 19, 2008

How clear was my crystal ball on the public sector in 2007?

Yesterday I stumbled over my blog post on “What will 2007 hold for the public sector”. It maybe gives an insight in my Mystic Meg abilities to predict (or not) future events.

I was right about NHS being in the news (not really a very startling forecast). Likewise social housing was on the policy agenda and in the headlines – the Hills report wasn’t a huge revelation but we do now know what the Housing and Communities Agency will look like and the regulatory arrangements.

Neither my blog or the Times article that inspired it suggested that data and privacy would become such an issue. Similarly it did not talk about the changes in emphasis on public sector reform away from choice and competition as Blair exited to bring peace to the Middle East.

I had written about the tightening of public finances in other posts. (After all the Institute of Fiscal Studies had been predicting that for a couple of years!) I suspect that will feed into the headlines in 2008.

Friday, January 18, 2008

Merger-skepticism in Further Education: a change of heart?

Readers of this blog will know that I am a bit of a skeptic when it comes to mergers and "big is beautiful"including in FE. The “synergies” (wince) and other benefits are identified and extrapolated – the downsides aren’t always. The distraction involved is almost never fully taken on board.

According to today’s Times Education Supplement the Learning and Skills Council may be showing a change of heart on mergers. The merger criteria are being revised.

This is welcome when nearly one in ten colleges are reportedly now in merger talks.

Risk and regulation - good and bad news on regulatory reform

There was good news on risk and regulation this week. The government launched a Risk and Regulation Advisory Council (RRAC) with the stated aim of improving the way risk to the public is understood and managed by government. No one can object to that objective.
The agenda of RRAC will be set after consulting stakeholders but topics under consideration include obesity, regional regeneration failures, systemic risk aversion and aspects of corporate governance. The RRAC needs to create a better awareness of the benefits and costs (including unforeseen consequences) of regulation as a response to risk.
The RRAC replaces the Better Regulation Commission (BRC). It is vital that the RRAC continues with the BRC's mission to identify how to:
1) reduce unnecessary regulatory and administrative burdens;
2) and ensure that regulation and its enforcement are proportionate, accountable, consistent, transparent and targeted

It is promising that there is someone from the third sector on the RRAC. Hopefully the RRAC will make an effort to listen and look at how regulation can affect the third sector’s small and medium enterprises. Just as small businesses in the private sector are engines of wealth creation so their equivalents in the third sector are generators of social value.

However, elsewhere things are looking less promising for regulatory reform. David Orr, the Chief Executive of the National Housing Federation, set out in the Guardian this week the dangers of the government’s housing bill – particularly how it will significantly extend the regulatory reach of the regulation over the neighbourhood services of housing associations. I had hoped that the recasting of social housing regulation would streamline arrangements.

Thursday, January 17, 2008

More than SPINning on sustainability and procurement?

On this website I have discussed the need for the efficiency and sustainability agendas to be linked. The Sustainable Procurement Information Network has launched a website that supports managers in doing this.

The SPIN website includes examples of good practice including environmental policies and strategies. Although the website is primarily aimed at central and local government, it should be helpful to other organisations in the public and not-for-profit sectors.

Sunday, January 13, 2008

Business plans – is failing to plan, planning to fail?

Apparently not according to a report in yesterday’s Financial Times. It reported that a survey by two professors from Babson College in the US, Julian Lange and William Bygrave. The professors surveyed over 100 Babson College graduates who went on to start their own businesses. They found that the performance of these start-ups was unaffected by whether or not they had written a business plan prior to launch.

Perhaps the research is a little more nuanced. For some entrepreneurs, a business plan is not necessary. I had a very rudimentary plan – but it was essentially just me and a laptop.

Before social entrepreneurs rip up their business plans, they should remember that if they want some finance, they will need a business plan. Moreover, if you are taking others (and their livelihoods) with you, a business plan is pretty desirable.

There is lots of useful guidance on business planning out there. I’ve identified some before from Forth Sector. Other sources of help include Microsoft for templates and Future Builders for guidance focussed on the third sector.

Thursday, January 10, 2008

Forecasting the future, corporate social responsibility and charities

As we are well past Twelfth Night the decorations are down and the papers are reporting news rather than reviews of 2007 and looks forward. I always enjoy reading the forecasts for the new year. However, we need to be cautious. These are among my favourite quotes:

Airplanes are interesting toys but of no military value
Marshall Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre

There is no reason anyone would want a computer in their home
Ken Olsen, president, chairman and founder of Digital Equipment Corp, 1977

Whilst being wary, it is important to note and watch trends.

On the last day of 2007 I noticed in the Financial Times’s suggested that it was time to say goodbye to corporate social responsibility:

Never mind rising sea levels: the waves of cynicism washing over corporate executives as they push their CSR agendas promise to become life threatening in 2008. In the inevitable life-cycle of management fads CSR is now heading for the exit … as to the identity of the next Big Thing in management: sustainability. Unlike CSR, this concept has some meat and commercial potential to it. Innovations that make money while helping to reduce carbon emissions are actually worth pursuing.

I've commented on here that cutting costs and cutting carbon can go together.

If CSR is on the way out (albeit with some re-badging of CSR as sustainability), this may pose challenges for some charities – particularly if the economic environment forces some corporate sponsors to do some trimming of budgets.

Sunday, January 06, 2008

Foundation Trust governance: Network Rail and NHS Direct

There has been some debate about the effectiveness of the governance of NHS Foundation Trusts – in particular, the poor levels of participation seen in some Trusts. However, it is interesting to see that there is an emerging campaign to reform the governance of Network Rail along the lines of Foundation Trusts. In the aftermath of the new year “Network Fail” engineering works, some stakeholders of Network Rails are frustrated by the lack of accountability seen in the organisation.

On the issue of Foundation Trust governance, there is a big opportunity for everyone to have a say in a widely used NHS service. NHS Direct receives 120,000 calls every week. Now it is seeking Foundation Trust status and, hence, asking members of the public to join as Trust members. Its Foundation Trust zone is here.