So the chair of the charity commission, Dame Suzi Leather reckons that up to £5bn of funding will disappear from the coffers of charities over the next few years as contracts are cancelled and grant funding from local authorities, particularly the funding that comes via ‘discretionary spending’ will all but disappear. We know she’s right (she almost always is).
Things appear grim in just about any sector you are in. The CBI appears confident about private sector growth in the coming years but we all know of private companies large and small that currently survive solely on the business that they do with the state nationally or locally. Will these companies survive as they are? Surely not.
But these long term prospects don’t have to be a given. Death is not the only option; there are opportunities here too.
It’s easy to be despondent and understandable that people are angry; after all if the country with the fourth largest economy in the world can’t manage to look after its most vulnerable citizens then what hope remains? While I appreciate the huge challenges ahead across all sectors, it won’t necessarily be total carnage. There will, no doubt, be some blood spilt and good organisations doing important work will be sadly lost but great organisations, entrepreneurial organisations with empowered, entrepreneurial staff may well be able to adapt to this brave new world and do rather well. Many charities and even social enterprises have swelled in size during times of big government spending. They have become dependent on massive state contracts (or a multitude of small local ones). Some have bred a culture of over-dependency and doing this, many have lost their freedom to challenge their paymasters. Some have even lost sight of their original vision and purpose. Rather than be part of an independent sector that is free to challenge, question, analyse and at times condemn, quite a number have become simply extensions of the state. Independent quasi quangos with questionable impact and, in a few cases, a confused and questionable purpose.
It’s the front line, the beneficiary-led and community-owned organisations that need to be protected and protected fast. The government’s £100M transition funding is all well and good but what we really need is an enterprise fund for small and medium-sized charities that can be supported to find their socially entrepreneurial inner-selves. They need support from their social enterprise peers to find new ways to generate income and profit while achieving their social and environmental purpose along the way. Social firms have become pretty damn independent precisely because the state was never smart enough to understand their true value; development trusts where possible have acquired assets that should enable some sustainability over these austere times; Co ops that frequently trade in consumer markets will surely survive the challenges as the Co-operative Group and the John Lewis partnership have shown through the recession.
Charities need to get enterprising and they need to be preparing right now. Whatever we think about the budget and the implications of devolution on civil society groups we now know that the writing is on the wall. There will be less money flowing in the traditional ways. We in the social enterprise movement need to strengthen our evidence of impact, look to still-buoyant markets for ethical goods and services, innovate, evolve and whatever else – not give up without a fight. If we do this we may find in a few years’ time that we have a more developed sector, a more independent and credible voice, delivering ever better quality with ever better ways of engaging and working with the people that rely on the services and goods we provide.
The future has not just to be enterprising. It has to be socially enterprising.
