UK: IM SOUNDING BOARD - CHARITIES FACE A CRITICAL DEFICIT. - With over half the top management jobs in the voluntary sector going to outsiders, charities must get together to grow their own.

by Ian Bruce.
Last Updated: 31 Aug 2010

With over half the top management jobs in the voluntary sector going to outsiders, charities must get together to grow their own.

The UK charity sector, which accounts for 3.5% of GDP and employs 450,000 staff, has consistently recruited over half of its senior management from outside its ranks - perhaps a unique state of affairs for such a large sector of British business. Our survey at the Centre for Voluntary Sector and Not-For-Profit Management (VOLPROF), part of London's City University Business School, found that 53% of top-level managers in the UK's 200 largest charities had been recruited from outside of the voluntary sector (33% and 20% respectively from the private and public sectors). For those concerned with the future of charities it is a worrying statistic.

Though a regular influx of managers from the non-voluntary sectors must surely have its benefits, not least in importing new ideas and skills, there is a strong case for arguing that such a high level of imported talent can be equally detrimental. Apart from the fact that any newcomer must first 'learn the business', there are the inevitable effects on morale for others lower down the scale. It must be highly demotivating, not to say depressing, for middle managers in charities to see the lion's share of the top jobs going to those from outside. At the same time, it cannot be good for the medium-term development of the voluntary sector for it to have to poach managers from other sectors with such regularity.

The initial step to correct the imbalance must be to examine why we are not growing our own in the first place. The high level of external recruitment cannot be readily explained in terms of a shortage of existing full-time managers - with an estimated 6,000 already working in the 200 largest charities there is a significant pool from which to choose. The more likely conclusion is that junior and middle managers are simply not receiving the necessary training and development to qualify them for senior posts. It is this persistent deficit that the charity sector must address if it is to prosper in increasingly difficult times.

The need for systematic management training is made all the more acute by the increasing workload and deepening funding crisis faced by UK charities. The most recent figures from the Charities Aid Foundation show a progressive fall in real terms of both voluntary sector income and direct funding from government over the last five years. At a time of a shortfall in state funding the pace of change is also being forced by legislative changes. The Government has recently introduced measures that encourage an increase in the number of services contracted out to the private and voluntary sector. Not only will the Government contract out a lot more work to the voluntary sector, it will be doing so under a process of competitive tendering. Though British charities have traditionally competed with each other for sources of income, they have up until now attempted to co-operate in the provision of services. Contracting out under tender will introduce an element of fierce competition.

Charities have also had to deal with increased financial pressure as a result of changes in social security legislation. In addition, there is the simple fact of recession. Past experience has taught that when times are hard, it is often the voluntary sector that is left to pick up the pieces. In the last five years the number of people asking the Royal Institute for the Blind (RNIB) for funds has doubled.

While those in business will readily appreciate the external pressures, they do not always recognise the existing complexities of charity management. Take the RNIB, for example. The task of providing services to one apparently homogenous target group - blind people - might seem straightforward. Yet there are one million blind and partially sighted people in the UK, from the newly-born to the very old, some single-handicapped, many multi-handicapped.

To try to meet their needs RNIB provides direct services (homes, hotels, schools, colleges, rehabilitation centres, talking books, braille publications and technical aids), indirect services (consultancies providing advice and training to hospitals, social services, local education authorities and the private sector) and a range of lobbying activities. To do this we have to raise £50 million a year and employ 2,000 staff and 25,000 volunteers. It is, by any standards, a formidable task.

Taking the internal and external factors together, the role of the manager in the voluntary sector is more onerous than ever - put simply, the satisfaction of greater demand and rising expectations with fewer resources. Accordingly, a survey by VOLPROF of the chief executives of the UK's largest charities has shown the increasing importance they place on strategic planning and marketing in facing the challenges of the coming years. Yet, as managers with marketing skills appropriate to the voluntary sector are among the hardest to recruit, the need for a massively expanded programme of management development is all too apparent. At a time when many of Britain's largest companies are cutting back on training programmes because they cannot afford them, the situation facing their cash-strapped counterparts in the voluntary sector is all the more severe.

Given the diversity of the UK voluntary sector, the immediate solution must be to identify the common training needs of the larger charities and arrive at a method of pooling their resources into a single means of delivery. Indeed, a feasibility study for a project of this sort, funded by National Westminster Bank and Telethon, is currently being carried out by VOLPROF. If charities can co-operate we might then find the skills, the resources and, most critically, the momentum, to provide the training we so urgently require.

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