News and Comment

How do voluntary organisations demonstrate impact?

Monday 14 March 2011

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Against a backdrop of concerns over effectiveness, efficiency, quality and independence, voluntary and community sector organisations will need to be clear about how they can demonstrate impact and value in ways that are relevant to their organisational structures and cultures, while satisfying the needs of funders.

Crucial for public service delivery

In the last few months the role of the voluntary and community sector (VCS) in public service delivery has become increasingly prominent. The Office for the Third Sector, for example, was renamed the Office for Civil Society by the Coalition Government, heralding the critical role that such organisations are seen to play in the ‘Big Society’ agenda.

Nick Hurd, the Minister for Civil Society, argued that the sector’s ability to support and mobilise people puts it at the centre of the government’s mission to deliver better public services and to build the Big Society. Government policy will focus on (1) making it easier to run a charity, mutual, social enterprise or voluntary organisation; (2) getting more resources into the sector while strengthening its independence and resilience; and (3) making it easier for sector organisations to work with the state.

Changing financial pressures

VCS organisations – or ‘civil society organisations’ in the new official parlance – are seen as playing a vital role in new models of partnerships that have the potential to deliver greater choice and relevance of services in innovative and efficient ways. Statutory funding to the sector increased from £8.4 billion in 2000/01 to £12 billion in 2006/07. At the same time, the nature of this funding has changed significantly. Funding received as grants decreased over the time period from £4.6 billion to £4.2 billion, while contract funding increased from £3.8 billion to £7.8 billion.

These developments herald fundamental and ongoing changes for how the sector operates. Voluntary organisations have to build relationships based on contracts and competition and face an ongoing challenge of proving their worth or ‘impact’. It is unsurprising, therefore, that while VCS organisations are broadly positive about the attention they have been receiving under the current government, there is also a sense of nervousness.

Building capacity whilst maintaining independence

While acknowledging the diversity within the sector, there is recognition that a significant amount of capacity building is required if VCS organisations are to fulfil the challenging role expected of them in delivering an extremely ambitious public service agenda. However, given the scale and speed of public spending cuts, the extent to which appropriate and adequate investment continues to be made in the sector has been cast in doubt. In the new landscape of fiscal tightening, VCS organisations need to demonstrate more than just ‘trustworthiness’ and good intentions. Indeed, there is an expectation that they will need to demonstrate ‘effectiveness’ and ‘efficiency’.

At the same time, with closer and more direct engagement with the statutory sector as providers of public services, there is renewed concern among VCS organisations of the need to retain independence. Evidence from the Charities Commission suggests that VCS organisations that deliver public services are significantly less likely to agree that their activities are determined by their mission rather than by funding opportunities. They are also significantly less likely to agree that they are free to make decisions without pressure to conform to the wishes of funders. This is one of the consequences of the sector’s increasing engagement with the so-called ‘formal accountability regime’.

Hear more about these issues at e-seminar on 16 March

I will be contributing to discussions on this topic as a panelist for an e-seminar convened by the charity Ambitious about Autism. The e-seminar: ‘How to convince and persuade people about the real value of your work’ will be held on 16 March. Short videos of myself and the other panelists talking about some of the key issues are available at Ambitious about Autism’s website.