The temptation of cherry-picking

The definition of cherry-picking is “to select the best or most desirable people or things in a group”.

It can sound like a good thing, but with charities it is referred to most often as a negative consequence of contracts. If you are only rewarded for your positive results, then there is a real incentive to work with clients who are the ‘easiest’. So in employment projects you work with those who are most likely to get a job rather than those who are furthest from the labour market with the most complex needs. Charities avoid this temptation by adhering to their values and ethos but in doing so may well lose out in a competitive bid process, and will need to raise other funds to continue to support those in the greatest need.

Does the same temptation to cherry-pick apply to funders?

One of the consequences of cuts in statutory funding has been increased competition for grants from trusts and foundations.  This means that funders can chose to only fund the best: the charities that can already demonstrate a successful track record, prove their impact, are financially sound with robust management in place. Funding the highest quality is a good thing but it can also mean adopting a safe strategy.

How do funders still take risks when they are spoiled for choice?

One way is to have a separate strand of funding where there is a greater tolerance of risk. Another growing trend is to fund the organisational development of charities who are doing good work but need to improve their functioning or sustainability in order to survive and thrive. There are lots of examples of this e.g. the Foyle Foundation has a funding strand for supporting young and emerging artists and another which helps arts organisations to reduce their overheads or generate new income. One local example is the Harpur Trust which focuses its grants on:

1. Keeping good services going
2. Bringing new ideas and services to Bedford
3. Helping to create better functioning organisations

One of the strengths of independent funders is that they can back things that are risky or take a long time to prove. So they need to resist the temptation of picking only the best cherries and take active steps against playing it too safe.

Is it easier to give or to get?

At Quartet Community Foundation’s recent annual philanthropy debate, the question posed was:

This house believes it is more difficult to give money away intelligently than to earn it in the first place.

 As someone who earns my living advising donors which charities to invest in, I had a foot in both camps. It is hard to make a living as a philanthropy advisor in the UK. But the very reason I do get paid to do my job is it is not easy to give to charity, if you want to do it well.

 Speaking for the motion were philanthropist Helen Wilde and Bevis Watts from Triodos Bank. They made a good case for the difficulties that come with giving intelligently:

• How do you find effective charities that are not the big high profile ones?
• How do you choose which ones to support?
• How do you sift through the poor proposals to find the quality ones?
• It takes time and effort to spend wisely.
• It takes experience and good judgment to identify those charities that need money but are not about to fold.
• You need to find out which are meaningful, credible, ethical, will have impact and are working with others to maximise resources and avoid duplication.
• Backing a charity involves taking a risk and that is a hard thing to do with your money.

And surely this is harder than making money by sitting in your house whilst it values accrues?

 But it was the case against that won the vote by 73% to 27%. Stephen Fear and Andrew Garrad’s basic argument was that making money is hard work. Yes there is an element of luck and it helps if you are born into social advantage or inherit. But it is down to putting in the long hours and surviving that leads to business and financial success. Whilst giving to charity? Well, they argued that that is easy – it is just common sense and uses the same skills anyone would use to decide what project to run with.

 So I ended up in the minority. I agreed with the winning speakers that it is easy to give to charity. But only if you go along with their premise that any charity is worth giving to. I still take the view that giving intelligently is harder to do as charities are not all equal. If you want to maximise the benefit from your gift then you have to put in the work to discriminate between the many options.

 It was a lively debate and a good evening. And I left suspecting that those not at the table - the charities out there delivering - probably have it hardest of all.

We have to talk about fluffy

I like Charity Bank’s new #CharityIs campaign which seeks to counteract the recent negative press with some positive messages about charities. It runs from 14th to 20th March and I urge you to participate. My contribution to this week is an ‘is not’: #CharityIs NOT FLUFFY.

I am often involved in introducing business people to their local charities or the charity sector as a whole. I am always amazed by the persistent myths that people hold about charities: that they are amateur, inefficient, homespun or well-meaning and worthy. A term that is often used – especially when the arts are involved - is ‘fluffy’.

When people think ‘fluffy’ they mean that a charity is a ‘nice to have’ rather than fundamental to society. Calling charities ‘fluffy’ does them a gross disservice. ‘Fluffy’ means soft or superficial. It suggests charities offer tea and sympathy rather than effecting change. I think it is used as a shorthand for things that cannot easily be measured or monetised. But just because things like promoting wellbeing and creating a sense of community are not easy to measure or put a cash value on does not make them ‘fluffy’.

There really is nothing ‘fluffy’ about operating a crisis support service 24/7 to ensure women fleeing domestic abuse have somewhere safe to go. Nor when trying to find a hostel bed for a homeless person who is still drinking. Nor when supporting a family when their loved one is diagnosed with dementia. And neither is it ‘fluffy’ to run a modern day charity which is all about balancing competing demands, resource allocation, financial sustainability and demonstrating impact.

Charities are an important part of society. Here are just some of Charity Bank’s findings:

• 78% of UK adults have used charity services in the last year
• 800k people are employed in the UK voluntary sector
• 3m UK adults received emotional support or counselling from a charity.

So when we talk about what a charity is, how about ditching ‘fluffy’ and talking about how complex and vital charities are?

https://charitybank.org/charityis

Why grants are good

The launch of the Grants for Good Campaign brings a welcome focus on grants as a valuable funding mechanism. The newer arrivals on the funding scene (such as loans, social impact bonds and crowdfunding) have been getting a lot of attention. Novelty is always appealing and makes the more familiar ‘grant’ come across as a bit old fashioned and dull.

The Association of Charitable Foundations estimates that £6.1 billion of annual grants were transacted through grant-making foundations in 2013/14. Even with the reduction in government grants (down by more than £3.8bn over the last decade), they still have a significant role to play in funding charities and warrant our attention.

Debrah Allcock Tylor (see link below) has written about the benefits of grants for funders: they are straightforward (unlike contracts conforming to EU regulations); quick; flexible and good value (relatively low transaction costs). But why are grants a good thing for the recipients? Here are my top five benefits:

1. You don’t have to pay them back – there will be a social return expected but you won’t need to worry about making a financial return as well. 
2. They are valuable when needing to cover activity costs like research and development where it is difficult to generate enough income to cover costs.
3. You get the money upfront – it is trusted that you will do what you said you would with the money so there are no cash flow problems unlike Payment by Results models. 
4. They give credibility and can act as leverage to more money – if you have a grant approved from e.g. Henry Smith or Heritage Lottery Fund then it gives confidence to others who are considering supporting you. 
5. They represent a partnership – the funder's involvement can bring added value such as access to a network of similar organisations or help with influencing policy.

And finally, fundraisers may disagree, but I find that the discipline of applying for a grant helps ensure that projects are well thought through. The external scrutiny can help hold you to account for the activities you deliver.

If you agree that grants are good, then the Grants for Good Campaign would like to hear from you: https://www.dsc.org.uk/grants-for-good-2/get-involved/

http://www.theguardian.com/voluntary-sector-network/2016/feb/11/grants-local-charities-campaign-appeal-government-cuts

Eat local, shop local, give local

On my way to visiting a charity the other day, I stopped at an ATM to get cash. It was the sort of ATM which asks you if you want to donate to charity. Out of curiosity I pressed that button and my options included British Heart Foundation, Diabetes UK, ChildLine, Young Minds. Probably all good causes and also charities of a scale that can negotiate inclusion on a national ATM network.

The charity I was visiting was just two doors down. It is the sort of small, local charity that comes to mind when people think of a ‘charity’. It supports homeless people into private rented flats and helps them keep their tenancies. It is heart-driven: the kind of place where staff drive across town to collect a donated radiator when a client’s heating has stopped working. It is small: two staff and operating on c. £50k per year. If you are homeless you will have heard of this charity or will be directed to it pretty quickly. Otherwise, they struggle to get themselves known.

In the UK, we have campaigns to source food locally and shop locally. But what about giving locally?

For those making donations, giving to a local charity makes a lot of sense. You are likely to understand the issues and see the results of their work. You can visit the charity and so can better trust that your donation makes a difference. Your donation is also more likely to have a bigger impact as local charities tend to be smaller - £500 is a huge windfall for a charity running on £50k per year.

There are arguments against local giving. If we all give locally then the money tends to go to those living near to the wealthy and not those in the greatest need. As Caroline Fiennes says in her book ‘It ain’t what you give it’s the way that you give it’: “some of the most under-resourced and horrible issues remain out of reach to local donors”. Many donors like to give to groups both at home and overseas for that very reason. And it is also important to remember that local does not necessarily mean good. So do always check out the effectiveness and support those doing a good job. (see my blog ‘Tips for giving’: https://www.linkedin.com/pulse/tips-giving-emma-beeston)

But don’t be lured by the easy option of hitting the ATM button. You may well be just a few steps away from a great charity where your donation will be appreciated even more.

Tips for giving

Christmas is a time for giving …

Every Christmas a group of my friends pick a charity to support instead of giving each other presents. And because it is my job to assess charities, they ask me which one I would recommend. Many people do this, but most won’t have a philanthropy advisor to help.

It is easy to pick the usual big brand charities but there are lots of great, smaller charities out there where your donation could make a bigger difference. To find them try one of the tools available such as CharityChoice, Charity Navigator, CAF, or Localgiving to help you select a charity working for a cause you are passionate about.

But then how do you know if they are any good? It is my job to advise on which charities should be funded based on desk-based research, assessment interviews, scrutinising accounts and panel discussions. I don’t recommend you do all that before parting with £100, but here are five quick things you can do to reassure yourself that your money will be well used:

1. Check out the charity’s website – this should at least let you know they are active and is likely to include case studies about the difference they make. It may also show if they are members of any professional bodies or hold any quality marks.
2. See who else has funded them – if they’ve had money from say Comic Relief or the Big Lottery Fund recently then you can rest assured that a professional assessor has had a good look at them.
3. Consider keeping it local – there are 48 Community Foundations in the UK that pool donations to fund local projects. Again, all checked by them as part of the grant giving process.
4. Look your chosen charity up on the Charity Commission website. You may not want to read all their accounts but there is an overview page that will tell you how big they are and if they have reported as they should and on time.
5. Ask around – friends, family and colleagues may well know of a charity that really supported them when they, or someone they know, needed help.

There are some brilliant charities around that don’t have money for high profile marketing so it pays to dig a little to give you the confidence to give to charities which aren’t necessarily the household names.

… giving more …

Look out for ways to increase your giving, for example the Big Give Christmas Challenge will see donations made from 5th to 14th December matched. Some employers run matching schemes so it is worth asking if they will double your donation. And don’t forget gift aid increases your donation by 25%.

… giving together …

Pooling money with friends means your chosen charity gets a larger donation. You can also take part in giving circles or live crowdfunding events like those run by The Funding Network or the Soup method. (The latter is an idea from Detroit that is taking off in the UK where people come together over soup to hear pitches and vote on who gets the money taken on the door).

… and receiving.

Research shows we are happier when we give to others. So giving well to a charity of your choosing should bring you a bit of festive cheer too.

How to spot founder's syndrome

Running a charity is hard. I take my hat off to all those non-profit founders who bring their vision, energy and drive to create social change. However, when assessing charities and deciding which ones to fund, the term ‘founder’s syndrome’ often comes up.

There are lots of inspiring charity leaders and there is nothing wrong with a charity having a compelling and persuasive founder involved – often they are absolutely vital for attracting support. The problem occurs where the founder has too much power. But how do you spot it?

This is what sets off my ‘founder’s syndrome’ alarm when assessing charities:

On paper:

1. There is a high turnover of Trustees or conversely, the same Trustee group staying for years and years. The first pattern suggests challenges to the status quo fail and the second can indicate that no challenging is taking place.
2. There is no formal plan – because there is no point having one, it is in the founder’s head and subject to change as they decide. In fact there is generally a lack of formal structures e.g. performance management, Board skills audits.
3. The charity is not part of any external quality assurance schemes or formal partnerships.

On a visit:

1. They don’t listen – they tend to avoid direct questions and tell me what they think is important.
2. They meet you on their own – they don’t bring in a Trustee, finance director, frontline worker or a service user to speak with me.
3. They lack awareness – founder’s syndrome is much talked about so if you are a founder meeting with a funder it should not be a surprise that they will ask about succession planning, governance, or exit strategies and you should be happy to discuss these.

I am not saying any one of these or all of them means there is definitely a case of ‘founder’s syndrome’ but it does set me off on a line of questioning about decision-making, conflicts of interest, performance management etc.  And neither is this confined to founders – there are other non-founding leaders with the same issues of control.

At a recent charity, I met with the founder who, before I even asked, had told me his exit strategy (after 10 years), the work he and the Trustees were doing on succession planning and stated his wish “I want the charity to flourish without me”. Now, that’s the way to do it.

The importance of how

In a previous blog, I wrote about the ‘what’ and the ‘why’. But when attending New Philanthropy Capital’s NPC Ignites conference last week (link below), I was really struck by the discussions that related to the importance of ‘how’. Here are the points I noted:

• 70% of strategic plans don’t get implemented.

• Budgets support the status quo. The budget setting process is too long, too detailed and bottom-up. The whole organisation can become paralysed whilst it ‘does the budget’. Instead, start from the strategy and think what resources are needed to deliver it.

• Productivity matters – you are not just looking for impact but also at what cost this is achieved. This resonated with me as a funder because I have to consider the cost of different interventions as well as their expected outcomes. But productivity is also an important factor for charities deciding how best to allocate resources – some interventions may just cost too much.

• Effective implementation needs both a sense of excitement and dogged perseverance. You need to embed the mission into the culture of the organisation and ensure people hold it in their hearts as well as doing the ‘boring’ bits of implementation like planning and reviewing progress.

• Research has shown the importance of implementation: you can sometimes achieve more by implementing something well, that failed elsewhere, than by implementing a proven intervention badly.

Implementation is a poor relation when compared to the excited talk there was around digital and measuring impact . But if you don’t actually deliver what you set out to then you can’t bring about change. I was pleased to see its importance highlighted. ‘How’ definitely deserves its place alongside what and why. 

http://www.thinknpc.org/events/npc-ignites/

Be more magpie

Research on magpie behaviour (link below) has shown they are not attracted to shiny things, as we like to believe, but instead they try to avoid them. It set me thinking about the lure of the shiny new innovative projects that can appeal to funders and philanthropists giving money to charities.

Charities do great work that changes lives and givers big and small want to support them to do this. But behind that great work is lots of far less interesting things that have to happen. Someone needs to do the payroll; insurance needs to be renewed; minibuses taken for their MOTs; risk assessments and plans written; databases need to be maintained.

Charities all say that it is hard to raise money for their core costs yet many grants exclude them. Full cost recovery and compacts try to address this but often charities have to find ways to package their overheads into their project costs to get them covered.  Or they spend precious time away from the frontline to gather unrestricted funding from events and sales.

Similarly, charities bemoan having to find ways to change or dress up their existing work to look like new projects. What they do is working well but lots of funders won’t consider supporting it as they want to back something different and innovative.

As our understanding of magpies has changed, maybe we should learn from this and be more magpie. Rather than just funding the attractive work that gives us those shiny case studies. Perhaps we should find reward in funding what the charity wants and needs. More funders and philanthropists should willingly fund the photocopier service contract, the admin worker or the office cleaner.  Or be proud to fund the continuation of existing work that is needed and getting good outcomes. They might be a little less shiny but they are vital.

http://www.exeter.ac.uk/news/featurednews/title_406690_en.html

Giving and the art of blackberry picking

At this time of year, when I go out to gather blackberries, I am reminded of my mother giving me her wise advice on picking:

1. Only pick blackberries above the height that the tallest dog can pee.
2. No blackberry is worth dying for.

As well as being sage advice for blackberry picking, it can also be applied when it comes to selecting the best charities to give money to.

Let’s take rule number one. There are basic flaws and issues that mean some charities are best avoided. As an example: the ones that don’t have good safeguarding practice, have badly managed finances or poor structures. Just because they are there and available, does not mean they are good. There may be very solid reasons why no one is funding them already.

There are lots of blackberries above the ‘basic hygiene line’ and many charities are above the basic requirements too – they are doing good work and are also well run. The issue is that there are lots to choose from. The art to selecting is knowing where to find best practice; that some are a little better than others; and they vary in size and ambition. Context is also important – you want to fund at the right time. Despite the choice available, it will still take effort to select the best and you may well need help to find the charities that best match your preferences.

And so to rule number two. There are always big, juicy blackberries which are tantalisingly out of reach. Balancing on one leg at the top of a ditch to try and reach them is a risky business. There are rich rewards for those who come prepared with ladders and protective clothing – but it is not a job for the ill-equipped. I think of these being the pioneering charities working in new or difficult fields. You need to know what you’re doing when funding them and be prepared to take the risks. If you over reach yourself then you may be giving money to a charity that folds. But if you have experience and do the right preparation then you should reap significant social impact rewards.

So enjoy your blackberry crumbles, pies and jam this autumn. And keep my mother’s advice in mind when choosing a charity to donate to. I wish you rich pickings.