Welcome to the Third Sector Trends Conference 2013

1. Welcome to the Third Sector Trends Conference 2013 Penny Wilkinson Chief Executive Northern Rock Foundation

2. Background to the Third Sector Trends Study Rob Williamson Chief Executive Community Foundation for Tyne & Wear and Northumberland

3. Getting beyond anecdote and supposition: what we have learnt about the Third SectorFred Robinson

4. Third Sector Trends Study • Commissioned by Northern Rock Foundation in 2007 • Aim: to get a better understanding of the scale, dynamics and support needs of the Third Sector – to help the sector serve the community effectively. And get beyond anecdote and supposition • A team effort: Durham, Teesside and Southampton Universities; NCVO and Guidestar UK • Longitudinal study – about change. Two phases so far • Qualitative and quantitative. Database analysis; interviews; large-scale questionnaire surveys • Focus: North East and Cumbria

5. Findings 1 … Scale and scope of the Third Sector in the North East and Cumbria: • Over 6,800 ‘general charities’ based here • Income about £900m • Assets over £1,600m BUT most are small: about 60% under £10,000 annual income PLUS about another 3,000 ‘other’ registered Third Sector Organisations (TSOs) and at least a further 10,000 unregistered, mostly small community groups Employment: about 46,000 (less than 4% of total employment), Volunteers: 200,000

6. Findings 2 … State of the Third Sector: under pressure – but generally resilient and coping with endemic uncertainty • From 2010-12, increasing numbers reporting falling income. But most reported stability • Small TSOs generally carry on regardless – stable, robust, independent • Bigger TSOs (income above £50,000 a year) more affected by change. In 2012, 31% of them reported income had been falling – compared with 15% saying that in 2010 • Middle ranking TSOs hardest hit; also infrastructure organisations

7. Findings 3 … • BUT fair amount of optimism about the future – one-third of bigger TSOs expect growth in income as well as increased demand • Not much sign of rising involvement in delivering public services – but awareness of opportunities has grown • More interest in partnership bidding – but little interest in mergers • Sector sees itself in a favourable light and thinks public sector has a positive view – but that it doesn’t listen to the sector

8. Findings 4 … Successful TSOs • Are clear about their mission, are well organised and have a strong asset base of resources, people and ideas We explored • Enterprise • Ethos And we looked at how organisations developed over time; generally they are • Thriving and Rising, or • Surviving or Declining We identified critical success factors • Mission, planning, decision-making, assessing opportunities, building relationships, etc

9. Main conclusions Good governance and management are of great importance – skills, experience, commitment It isn’t just about getting funding...... Getting the organisation right is no less important than getting the funding secured – in order to serve the community

10. Mission Impossible? Balancing organisational foresight, enterprise, capability and impactTony Chapman

11. Impossible dreams? • TSOs want to achieve so much, but resources can’t catch up – they try to do more for less. • TSOs value independence and want to do things their way – this produces competition. • TSOs yearn for stability and sustainability – but change is certain. • TSOs are so optimistic about the future! – be careful about what you wish for.

12. Horrible realities? • Help from volunteers won’t increase that much – 77% expect more reliance. • Public sector can’t (and may not want to) come to the rescue – 40% expect more reliance • Private sector isn’t on the same page just yet - 43% expect more reliance • Charitable foundations are feeling the squeeze too – 63% expect more reliance • Public can only give so much money – 54% expect more reliance

13. Is money always the answer? Two ways of looking at money: “We should be ‘funded’ to do good work.” “Lets get the ‘money’ in to get the job done.” We think that money is a medium through which activity can be done, but it doesn’t solve every problem

14. What is money for? • Cost of getting things done • Cost of staff development • Cost of discretionary spending • Cost of assessing and communicating success • Cost of campaigning • Cost of disasters • Cost of debt • Cost of running and maintaining a TSO

15. Not everything that glitters is gold Bringing home the bacon is a constant pressure, but what if ‘success’ makes things worse? • What if staff and volunteers don’t believe in it? • What if there isn’t enough money to do it? • What if it means working with people you don’t get on with? • What if you don’t really know how to do this?

16. Making good decisions involves striking a balance between the organisation’s altruistic mission to achieve social outcomes and its own needs as an entity to be resilient, capable and have sufficient assets to do its work.

17. Assessing “opportunity costs” • Scaling up or scaling down • Developing staff or not • Entering partnerships or not • Changing direction or holding firm • Campaigning or keeping quiet • Weathering storms or knowing when to stop

18. Getting it wrong?

19. WEAKER ORGANISATIONS BEHAVE SOMETHING LIKE THIS Exaggerated perception of continued growth producing mission drift Don’t recognise sudden upward fluctuations in income as “ephemeral” and don’t build reserves New opportunities successfully exploited Periods of decline drawing upon reserves / or shuffling income from other pots Exaggerated perception of continued decline – eliciting “panic” response and bid for work with low capability / interest “Asset base”

20. What can go wrong? • Chase short-term opportunities that skew mission (poor application of Foresight) • Don’t know when not to do things (poor application of Enterprise) • Not fully aware of current or potential capability • Confused about who they serve and don’t know what impact they have

21. Getting it right?

22. STRONGER ORGANISATIONS BEHAVE SOMETHING LIKE THIS Perception of sustainable organisational resource “its natural or equilibrium position in the medium term” which is tied in with mission and organisational planning Think about periods of growth as “ephemeral” and build reserves` “Uncontrollable” periods of decline offset drawing upon reserves New opportunities successfully exploited “Asset base” Measured assessment of impact of resource decline: plans devised to return to equilibrium or restructure within realistic resource base

23. Getting it right? • Has the foresight to scan the horizon with its mission clearly in mind. • Sufficiently enterprising to assess the risks associated with opportunities. • Understands what its current and potential level of capability is. • Knows what the organisation is there to do and can recognise the impact of what they do.

24. The future is uncertain • Resources are finite • Income fluctuation is inevitable • The policy environment wont stay still • Social needs and priorities will change • Competition may intensify

25. Tough times, but this isn’t a crisis • TSOs are remarkably resilient • Expectations can be modified • Practices can be sharpened • Hard decisions can be made for the better • People can work together when it’s the right thing to do • But TSOs are autonomous bodies and it’s up to them to do all this.

26. It’s not “mission impossible” if the objective is realistic And in discussion groups try to keep this in mind... A TSO is an autonomous entity which is responsible for its own destiny. Making good decisions involves striking a balance between the organisation’s altruistic mission to achieve social outcomes and its own needs as an entity to be resilient, capable and have sufficient assets to do its work.

27. Workshops

28. Questions from the workshops?

29. Thank you for coming