Karl Wilding

There have been a couple of replies to the NYT article here.

They both seem to be critical of the original article, standing up for the role of philanthropy, and in one case berating the performance of government. But I thought the original article was a bit more nuanced than that. Anyone got a view?

If it’s about wider funding, then the obvious things that spring to my mind (and I’ve mentioned a couple on the other credit crunch blog) are:

1. Loan finance: obvious really, but loan finance will dry up as institutions holding cash hoard it. Not a great time to be promoting market solutions and quasi-equity.
2. Foundations: likely to be hit by nervous equity markets. I’d be interested to know if anyone in the network knows whether foundations have been investing hedge funds, who from what I gather might be particularly exposed to the sorts of securities that are now perceived as risky.
3. Corporate-related foundations: we’ve seen a couple of examples now in the UK of foundations related to private sector bodies where funding arrangements have been changed as the parent has got into difficulty.
4. The sector becomes a more attractive employer to the professional classes: there may be real opportunities for the sector in terms of attracting career changers. I wonder if at times of financial distress people reassess what they want from a job and look to the sector? Again, anyone in the network remember this from last time around?

I’ll try and think of some more, but the most interesting question for me is at the macro, not the organisational scale: will the sector downturn in sync with the rest of the economy? Or is there something about our sector that is counter-cyclical given its focus on social and economic welfare?

The argument for the former might go something like yes, because the sector has become so intertwined with the other sectors and because of the social enterprise approach. The idea of a counter-cyclical sector might be based upon the idea that trustees make deliberate decisions to apply reserves when they are needed most – a sort of Keynesian boost. Sadly, I think reality is the former, but again I would be interested to hear the opinions of people who have been around a bit!

Geoff Mulgan’s point about focussing on institutional structures and forms has been echoed elsewhere in academic debates about ‘ownership’ – ie which sector are you in? This has arguably led to what some believe to be futile debates about independence, arguing that we should instead recognize that interdependence is the dominant paradigm in the mixed economy of welfare.

You’ll all know the blurring of the boundaries argument: well, academics like Ralph Kramer argue that the sector is an artifical construct, and that the notion of a sector is only really useful for political lobbying purposes. Those who have been around a bit might know of a paper by Diana Leat and Perri 6, who argued that the notion of the voluntary sector was actually created in the 1980s by a couple of policy entrepreneurs.

So, where does this lead me (I say me as these are personal views, not those of my employer)? Well, it might suggest that we are still focusing far too much on forms and boundaries. Social enterprise springs to mind here, as do faith based organisations, and their treatment by public policy. It might also suggest that the independence debate in its current form is overdone, though I would still recognize that there are substantive practical issues around how you provide welfare services in the mixed economy. It has implications for a regulatory world that is neat and tidy: the future would seem to be about hybridity, about messy organizational forms that are difficult to allocate to a sector or typologies. And finally, it of course emphasizes governance above government. But I wonder how much our notions of governance are dependent upon the big state, which is the current paradigm? I think all these ideas need to be thought through in the context of a smaller state, as that would seem to be the way that the political pendulum is now swinging.

My personal opinion is that there is much more to do around thinking about ICT will change the sector. I find it quite disappointing that so much discussion tends to be around back-office support or, where it is about the wider environment, how we can use websites to get people to click to give.

The focus needs to broaden so that we think about how ICT is changing the institutions and communities around us: this then leads to a focus on what the sector can strategically plan for. The other part of my rant is that we are still hearing all the time that the cost of kit is a huge barrier. It’s not, or it is if you have a PC-centric view of the world.

I would love to see someone produce a vision of what their organisation would look like in 5 years time if it responded to some of the ways in which people are now using new technologies to communicate and collaborate!

Should umbrella bodies promote the notion of a sector? Or should they instead promote the issues and missions of their collective members that ultimately shape the need for voluntary and community organisations at the centre of a civil society?
Now seems a good time to pose the question about what the infrastructure of the future is for: what with CapacityBuilders taking the ChangeUp agenda to its next stage, and Carnegie UK’s report on the future of civil society highlighting the need for organisations not just to focus on your own patch. Its something we are thinking about here at NCVO, but what motivated me to blog about this was an article on the Stanford Social Innovation Review and in particular a provocative statement that says “It should be clear that talking about what nonprofits need is not the way to make nonprofits relevant to the general public”

There’s more challenging stuff, so have a look and, if you have a comment about the future direction of the UK infrastructure, I would be interested in a conversation in this forum. I’m certainly going to have a bit more of a think about it. Maybe I should have titled this blog Infrastructure Will Eat Itself…

Now, this might look a bit odd, but I’m replying to my own blog. Or rather I am replying on behalf of an old friend who can’t reply in person. Let’s say they are challenged by the technology.

Anyway, I digress. My friend points out that the survival of ‘unstrategic’ foundations isn’t actually that strange. He argues that foundations will survive even by doing nothing, because they don’t need to do ‘something’. The report does indeed say this too – my friend remarked “there is no pressure on them to change or to do anything, so in a sense to me their survival isn’t surprising – they will just continue, and ‘be’ until…well, until the revolution comes? And here, without even a 5% payout requirement that exists in the US, that probably applies even more?” Given the rather obvious fact that these foundations have been around since Adam was a lad, are they living proof that a strategy is a useful but ultimately unnecessary tool? Hmmm…

My friend goes on to argue that “most trustees of most (probably smaller) foundations don’t have any clear conceptual view, or any theory of social change, within which they are operating… They are simply trustees of a foundation that gives money away, and they try and do it honestly and as well as they can – that’s all. End of story. Of course there’s nothing wrong in that per se. But the US book is probably predicated upon a more philanthropic concept that there is a responsibility upon foundations to deal with causes and long term issues.”

In other words, strategy is the difference between just surviving and doing well. And in turn, strategy is about planning for the long-term, based upon a theory of change. This begs the question how much strategic planning (in foundations or otherwise) is based upon a theory of change?

I think it’s debateable whether or not this does have direct implications for the sector. Its certainly the case that foundations will be impacted: remember they are in effect savers who live off the dividends and interest from their investments. So, an increase in interest rates will (ceteris paribus) increase their income. Which means they have more money to give to the frontline organisations reading this blog.

Balanced against that is the obvious fact that more organisations are borrowing. Loan terms vary and of course the foresightful (again, those reading this blog I hope) will have borrowed at fixed rates. For others, higher interest payments mean less to spend on charitable purpose.

The sector is, overall, a net saver. So, increased interest rates should lead to a direct increase in the sector’s income. However, the donor in the street might have less disposable income if they are paying more out on the mortgage. In other words, increased interest rates should lead to an indirect decrease in the sector’s income. What the Bank of England giveth they taketh away…

By the way, if you want to construct your own trend chart to show changes in the base rate you can copy all the figures from the BofE’s stats page

Its another US publication, but the Center for Effective Philanthropy recently published a report on how foundations view and design strategy. OK, its about foundations, but put that aside. Its relevant to all of us.

It defines strategy as “a framework for decision making that is 1)focused on the external context in which the foundation works and 2)includes a hypothesised causal connection between use of foundation resources and goal achievement.

OK, nothing surprising, but what it does do, which is interesting, is highlight the continuing survival of organisations in what you might argue to be a strategic position in the sector that effectively act in a non-strategic way. I quote: “the majority of frameworks they describe do not meet our basic definition of a strategy”. They also talk about a “fundamental disconnect” between belief in and actual daily use of strategy. The report can be found here

Wow. Strong stuff. Now, a funny thing for me is that I have always imagined that our north american colleagues are way ahead of us on the issue of strategy and strategic planning.

So where does that leave us in the UK? How much as we walking the talk?

There is an interesting quote on Wikipedia’s internet entry from an american writer called N J Slibbert of the Urban Land Institute. He states that “the Internet is fast becoming a basic feature of global civilization, so that what has traditionally been called civil society is now becoming identical with information technology society as defined by Internet use.”

Interesting comment, especially given other drivers on here regarding the digital divide and the critique of Robert Putnam (which I think he has subsequently addressed) that theories about the decline of social capital failed to take account of digital communities.

The quote is orginally attributed to: Slabbert,N.J. The Technologies of Peace, Harvard International Review, June 2006 and can be found here This is actually an article about the US peace corps and its role in international security (!), and the idea that technology is civil society is not expanded.But its an interesting idea that needs exploring.

I agree this is a problem, but is the access issue reaching a tipping point? The Internet World Stats website reports that 62% of the population in the UK now has web access. I think that Ofcom estimates are even higher. Worldwide, an estimated 1.2 billion people have web access.

One of the problems about the debate on internet access is that it is a very PC-centric model. I can’t pin down the research – I think it’s by Gartner – but in essence they argue that shortly more mobile phones will be connected to the interne than PCs. My guess is that the mobile phone is perhaps the most democratic, classless piece of technology in use today, whether in the UK or worldwide. So maybe the Smartphone will signal the end of the digital divide.

A second problem is that it is assumed to be a supply-side issue (i.e. supply is too limited/too expensive). But technology adoption is also a demand side issue. I wonder if some people just don’t see the relevance, or the PC/internet doesn’t fit with their lifestyle? So, for a number of years Sky’s dustbin lid was probably not bolted to many homes in Islington as it was a piece of technology with class connotations. The PS3, Xbox etc are similar bits of technology with a particular demographic. Perhaps the final point to note here is that all these devices (and your fridge too, if you fancy it) will all connect to the internet.

I wonder if the answer to this question lays not so much in the implications of a bigger rental market per se, but the implications of some parts of the rental market getting larger. In particular, the private sector is gaining a foothold in the provision of social (i.e. rented) housing as government (specifically the Housing Corporation) creates a mixed economy of providers including the private sector. David Mullins (well worth googling if you are interested in housing and futures) and Bruce Walker argued last year that the hoped for improvements in efficiency from this move might drive up innovation and drive down price.

The implications for the third sector therefore of a larger rental market with more players are pressure on price (whatever the ‘full cost’) and the need to respond to more efficient practices. See Mullins and Walker’s presentation here

More broadly, I wonder if some implications are a greater distinction between the haves and have nots in society, with the haves being the house owning majority? And I wonder what the implications are for engagement and social capital? It might be interesting to look at (for example) census data and see what correlates with rented accommodation housing status.