Natalie Williams

With the credit crunch the topic on the edge of everyone’s lips, we decided that the next in our series of Foresight seminars would look at the impact of an economic slowdown on the VCS. The seminar aimed to help VCOs explore some of the challenges that this would present for their organisation, as well as the opportunities (yes there are some!). The emphasis of the seminar was on preparing for changes ahead through better, more strategic planning and thinking. Here are a few key findings from the seminar:

Presentations

The seminar was chaired by Karl Wilding, NCVO’s Head of Research – listen
to his introduction (password: foresight)
• Rebalancing the UK economy – download the slides or listen to the presentation. (password: foresight)
Peter Hahn, Cass Business School , gave an overview of some of the key trends currently affecting the UK economy and explored where these might go in future.
• The impact of an economic slowdown on the VCS – download the slides or listen to the presentation. (password: foresight)
Keith Hickey, Chief Executive, Charity Finance Directors’ Group explored the main implications of the current economic climate on the VCS and highlighted some strategic responses to deal with these.

The session was thought-provoking and insightful. Participants shared a variety of ideas about the implications of the slowdown on their organisation and practical solutions to prepare for this. For anyone who couldn’t attend, I thought I’d post them up here for you to read and add your own. Anyone who did, please keep on talking!

Risks

• Increase in demand – e.g. for debt services. This is likely to be difficult to predict or plan for.
• Change in beneficiaries – there could be more middle classes seeking services and this may mean that the most needy lose out.
• Potentially less volunteers as people need to find two jobs.
• Reduced spending on products/services that VCOs sell as a result of decreased disposable income.
• Higher expectations from funders - the local authority or other funders may demand more in return for their funding. Will VCOs be wiling to walk away when their demands are too great? Local Authorities may also become slower at repaying debts. VCOs will need to improve their debt collection.
• Increased competition with the private sector.
• Reduced income for Corporate Social Responsibility (CSR) from corporate companies.
• Reduced resources for campaigning - this may become a subsidiary activity if it is not your organisation’s primary purpose.
• Avoiding mission drift in an environment where organisations can not afford to be fussy about where their funding comes from.

Opportunities

• Time to influence political parties - there will be more pressure on them to perform.
• Volunteering - there is some evidence that there is more volunteering in a recession as people lose their jobs and volunteer to find more work or gain skills. These volunteers are usually quite highly skilled as they have been made redundant. People may also want to help out those most suffering from the downturn. The government is focusing on making benefit claimants volunteer, although there was some concern over how this is enforced.
• More sympathy for issues of social justice
• Partnership working and collaboration – NOT merging, but using each other’s strengths to provide services (e.g. if one organisation has the volunteer workforce whilst the other has the admin backup etc.)
• Less duplication - better tailored and structured services may survive whilst those that aren’t may have to close down.
• Supplier discounts – many suppliers are willing to give good deals to get longer term contracts (improves stability for both sides).
• A more competitive environment might be valuable as the sector provides added value or more complementary services – e.g. it can reach areas that public and private sectors do not.
• Better recognition – if advertising sales are declining, there may be an opportunity to ask for reduced rates or pro bono adverts as magazines etc need the spaces filled.
• Third Sector lenders do have money to lend e.g. Triodos and Futurebuilders.
• National Indicator 7 for a thriving Third Sector provides an opportunity to create an environment which is conducive to the VCS.

Actions

The VCS is used to functioning with limited resources so some of these actions may be things you do anyway, however, they are worth taking note of:
• Cash flow forecasting - the VCS has not always been good at this in the past.
• VCOs need reserves and VCOs need to let decision-makers know why.
• Work with funders to try and understand how they are going to be affected.
• Consider merging or more collaboration/consortia building.
• Consider partnership or co-working - some organisations are already cutting staff and this is one way to combat this. Not merging but working strategically together.
• Keep on mission - be clear about the focus of your organisation.
• Concentrate on what you do well, rather than trying to do everything.
• Invest in marketing – make people aware of what you are doing and use this as an opportunity to widen your supporter base.
• Use the media to tell people about what you are doing and spread good news stories to get support. The media is interested in stories about the worst hit by the credit crunch.
• Tap into high net worth individuals for donations – they are less likely to be affected.
• Build relationships with suppliers or commissioners to make yourself the preferred and reliable supplier.
• Work with umbrella organisations to undertake campaigns, make use of the advice and support they provide.
• Recognise and plan for risk - funders are more likely to fund organisations who recognise risk and plan for it as they are more likely to be sustainable. VCOs need to be less risk averse about borrowing.
• Make use of skilled volunteers and learn to use them effectively. Often organisations either don’t have the capacity to take volunteers on (properly managed) or don’t have suitable roles that fully use their skills (media managers stuffing envelopes).
• Set up better monitoring systems - there will be more need to demonstrate impact and greater pressure for financial transparency.

This list is by no means exhaustive and covers just some of the ideas we discussed. I will be adding other ideas and suggestions throughout the website.

Why don’t you add any more opportunities or risks that you think might affect your organisation or share any strategic responses that your organisation already undertakes?

Sarah has written about a new report from the Social Market Foundation which examines whether community empowerment measures are really effective. Read about it here

Thanks everyone for your responses. I was lucky enough to spend all of Friday at the London Futures Symposium with a group of futurists (who are experts in thinking about the future and working with tools such as scenarios) so I took the chance to raise some of these issues there. I was offered lots of tips such as spending more time on prioritising the drivers first, in order to get agreement from everyone about which drivers are the most important and uncertain. When you do this, the two axes should in theory, stand out more obviously. However, everybody seemed to come to the same conclusion you’ve all suggested – our scenario question was not focused enough. We did not know what we were trying to find the answer to or create a scenario for! As Stephen says half the time should be devoted to the question, but in a day long session in which we had to identify drivers, cluster them, then create the axes and scenarios, it was unfortunately something which we didn’t have time to do! So the answer for such short sessions might be to at least have list of drivers first for participants to work from.

The seminar report for this session is now available here. The report is designed to also be understood by people who didn’t attend the seminar. So why not have a read of the groups’ reactions to the scenarios and add what you think the opportunities and risks might be for your organisation?

The report for this seminar is available to read online or download as a PDF here

This news post discusses a report by the Times which revealed that for the first time since they began arriving four years ago, more UK-based Poles are returning to Poland than entering Britain.

The post examines some of the implications for this on the UK economy and labour market.

Like Megan, I attended the FAN (Future Analysts Network) club event on Tuesday and went to an interesting session in the afternoon which discussed some of the essential skills and approaches needed to make a strategy work. The session was led by Sean Lusk from the National School of Government. He raised 5 pre-conditions for a good strategy, can anyone else think of any more to add?

• It should have a set of outcomes that drive the process;
• It needs to have a clear direction;
• It should be an inclusive process;
• It should have a strong sense of public value;
• It should have an analytical capability that is flexible according to each situation;
• Good strategies can only be successful in an organisation that permits and encourages challenges;
• There must be demand from the top;
• The route into getting people to think about the future is situating it in the present so that people are not too frightened off;
• However, this also needs to be balanced with the future focused parts.

If you can think of any more pre-requisites you think are essential for a good strategy please add them here.

The Strategy Exchange

Keep an eye out for the National School of Government’s new Strategy Exchange which they will be launching in a few weeks. With no shortage of books and resources on strategic skills and approaches, the Strategy Exchange is going to be a useful resource that guides people through this vast area of work. It will contain guides, case studies, key contacts in the strategy word and a strategy network. I will post some more information on this once it’s launched.

Hi Tony,

We will be recording the seminar and then turning it in to a seminar report shortly afterwards which will be available on the website, with the presentations available to download as well. The discussions will be summarised in the report but we could put up a podcast from the audio recording as well which people can then download and listen to.
We always design the seminar reports so that they make sense to people who haven’t attended the seminar.

As for the difficulties of London seminars for the rest of the country – we are looking into possibly holding seminars outside of London in the future but we would have to charge for them as it would mean we couldn’t use NCVO’s conference suite which is obviously a lot cheaper.

Hope this helps.

Natalie

Thanks for your response Leon, do you have a link to your book you could post? I’m sure some of the other members would be interested as we haven’t finished the further reading section of this driver yet.

However, I would just like to add that all these drivers are intended as a quick overview of what’s going on as a starting point for further discussion. We have deliberately tried to keep them as short and concise as possible, this is also because they are in web format. The implications for every organisation will be different so the drivers are intended to provoke organisations into thinking about what these trends mean for them. The audience on our network vary widely with different levels of knowledge about the external environment so some of these drivers may be totally new to them.

Natalie
NCVO Third Sector Foresight

Advice in the future: scenarios and issues for the future of the advice sector

This report analyses how key trends affecting the voluntary and community sector will impact on the future of the advice sector.

The report outlines how the operating environment for advice organisations is changing in four key areas, and some of the opportunities and challenges that may arise:

• The need for advice services
• Funding of advice services
• How advice will be delivered
• The advice sector workforce

The report also introduces four possible scenarios for the future of the advice sector:

• ‘Advice Direct’: Rationalised remote advice services
• The virtual advice grid: Networked remote advice services
• Advice super centre: Rationalised face-to-face advice services
• Local advice networks: Networked face-to-face advice services

The report contains signposts to further information, questions to think through and, a tool that will help organisations take some practical action.

Download the full report (PDF 1.24 MB)
Download the summary (PDF 1.17 MB)

This piece of sub-sectoral foresight was produced in collaboration with adviceUK and commissioned by the Peformance Hub.

15 November 2007
1.30 – 4pm
NCVO, London

Come and discuss the impact of new technologies on the future of your VCO and hear a variety of thought-provoking presentations from a panel of ICT experts.

Exploring the topic of the moment, this seminar will focus on the impact of new technologies for the VCS. The seminar will feature a series of short presentations from a panel of ‘experts’ (who participated in our ICT Foresight research) on the implications of new technologies in key areas such as fundraising, membership, campaigning and public service delivery. However, the emphasis of the seminar is on discussion and organisations will be invited to discuss the implications of new technologies for their organisation; exploring both the future challenges and opportunities.
This event is free to attend for VCOs.

More information or to book a place please email Asma Jhina – asma.jhina@ncvo-vol.org.uk

As CSR now covers an increasingly broad range of areas that relate to the wider impact of business and business practices, there has also been a shift in the language of CSR. ‘Corporate citizenship’ is basically a term to describe organisations who actively participate in the public sphere as members of society. This goes beyond businesses in the private sector, as the NHS corporate citizenship website illustrates. VCOs are also facing the same pressures and some are therefore re-examining their own practices and policies but this has significant cost implications. There is a risk that the private sector could be perceived to be ahead of the game when it comes to environmental concern (for example, Marks and Spencers already plans to go carbon neutral within five years). So far, CSR has developed essentially on a voluntary basis but calls for corporate accountability are growing, with initiatives, such as the CORE Coalition in the UK pressing for legally binding regulation. Do people think the VCS will struggle to keep up with this aspect of CSR?

Many environmentalists are not impressed, and see green consumerism as at best a diversion, and at worst an intensification of ecologically damaging behaviour, “a pox on the planet”, in George Monbiot’s words.
[http://www.guardian.co.uk/environment/2007/sep/17/climatechange.consumer]

Will Davies on state intervention in voluntary activity http://potlatch.typepad.com/weblog/2007/09/camerons-nation.html

Is ethical shopping becoming a signifier of social status for the middle classes who can afford to buy hundreds of eco-gadgets? And will ethical consumerism actually translate into political action on climate change?