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![Top service-providing charities by % statutory funds
1 NCH 31-Mar-07 193.5 88.9
2 Royal Mencap Society 31-Mar-07 150.9 84.9
3 Leonard Cheshire Disability 31-Mar-07 130.6 89.5
4 Barnardo's 31-Mar-07 111.1 57.9
5 National Autistic Society [The] 31-Mar-07 62.9 84.6
6 Sense - National Deafblind and Rubella Association 31-Mar-07 51.6 74.3
7 Turning Point 31-Mar-07 49.8 79.9
8 MacIntyre Care 31-Mar-07 34.5 92.1
9 Rethink Severe Mental Illness 31-Mar-07 32.9 76.9
10 JTL 31-Jul-06 32.3 97.5
11 Victim Support 01-Mar-07 31.6 97.8
12 Quarriers 31-Mar-07 31.1 79.8
Family Fund for Families with Severely
13 Disabled Children 31-Mar-07 30.0 96.6
14 Cornerstone Community Care 31-Mar-07 27.5 97.9
15 Rathbone Training 30-Jul-07 27.3 86.4
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Trends and challenges in the emerging private, philanthropic and statutory funding environments for the third sector
The document discusses trends and challenges in the emerging multi-stakeholder funding environment for the third sector, including an increasingly contested space with different agendas from sources like government, philanthropists, companies, and social investors. It also notes funding dependencies on individuals, investments, and statutory sources, and questions whether this brings new opportunities or risks of co-option.
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Trends and challenges in the emerging private, philanthropic and statutory funding environments for the third sector
- 1. Trends and challengesin the emerging private, philanthropic and statutory funding environments for the third sector Cathy Pharoah Professor of Charity Funding Co-Director, ESRC Research Centre for Charitable Giving and Philanthropy Cass Business School
- 2. The funding environment • third sector – increasingly open and contested space – how is this playing out from the perspective of its funding? • increasingly multi-stakeholder funding environment – local and national government, other state agencies, quangos, lenders, companies, venture and major philanthropists, users, activists • different/ competing agendas, expectations, roles • what are funding trends and sector dependencies? • adding value, transformational power, re-engineering, co-option?
- 3. The framing oftoday’s third sector – open season? Charities 170,000, 1000 new (or transfers) per year, income £46 bn Social enterprises 55,000, turnover £27 bn, 5% of all businesses with employees, 1% of GDP; 700 Community Interest Companies since 05, mainly CLG, range of business Partnerships 5,500 local hybrids, Sure Start/Connexions/Neighbourhood Renewal (£4 bn) Quangos and agencies Independent Living Fund, British Educational Communications and Technology Agency, Skills for Care, Skills for Care, the Specialist Schools and Academies Trust (£3bn) Community organisations 5- 900,000, property assets/ transfers eg village halls/community centres/historic buildings Civil society 865,000 organisations, total income £109 billion
- 4. Shape of charitableexpenditure today 1 Cancer Research UK 31-Mar-07 553.2 2 The British Council 31-Mar-07 545.7 3 Nuffield Hospitals 31-Dec-06 478.7 4 The Wellcome Trust 31-Mar-07 468.9 International Finance Facility for Immunisation 5 Company 31-Dec-06 441.8 6 The National Trust 28-Feb-07 312.8 7 Oxfam 30-Apr-07 297.2 8 CITB-ConstructionSkills 31-Dec-06 250.4 9 Anchor Trust 31-Mar-07 241.2 10 NCH 31-Mar-07 214.0 11 Church Commissioners for England 31-Dec-06 201.2 12 The British Red Cross Society 31-Dec-06 200.9 13 Barnardo's 31-Mar-07 195.6 14 Royal Mencap Society 31-Mar-07 172.1 15 British Heart Foundation 31-Mar-07 167.2
- 5. Third Sector’s Fundingdependencies Individuals 9,500 Investments 7,000 Stat grants 6,000 Stat fees 2,500 Legacies 1,600 Lottery (non-BLF) 1,300 Trusts (med, aca) 1,200 Trusts (gen, BLF) 1,100 Companies 1,000 Social investors 790 £m 0 2,000 4,000 6,000 8,000 10,000 Date Arial Bold 10pt
- 6. Shape of thirdsector funding today companies other social investors 2% govt grants 9% 3% 10% trusts govt fees 6% 23% people (dead) 6% lottery people (live) 5% 36%
- 7. State funding bysub-sector – top charities % of funding from state 70 59 60 51 46 48 50 40 34 34 24 25 25 28 30 19 20 10 0 S h D er es ut y n re AI t le l lit nc lth re en na yo ic fa op bi ild ca ea sp nm io el sa pe ch at w ho lh di ro rn al d ta vi in te ci en en bl in so m who is the major shareholder? what is the right shareholding? what does the public think?
- 8. Top service-providing charitiesby % statutory funds 1 NCH 31-Mar-07 193.5 88.9 2 Royal Mencap Society 31-Mar-07 150.9 84.9 3 Leonard Cheshire Disability 31-Mar-07 130.6 89.5 4 Barnardo's 31-Mar-07 111.1 57.9 5 National Autistic Society [The] 31-Mar-07 62.9 84.6 6 Sense - National Deafblind and Rubella Association 31-Mar-07 51.6 74.3 7 Turning Point 31-Mar-07 49.8 79.9 8 MacIntyre Care 31-Mar-07 34.5 92.1 9 Rethink Severe Mental Illness 31-Mar-07 32.9 76.9 10 JTL 31-Jul-06 32.3 97.5 11 Victim Support 01-Mar-07 31.6 97.8 12 Quarriers 31-Mar-07 31.1 79.8 Family Fund for Families with Severely 13 Disabled Children 31-Mar-07 30.0 96.6 14 Cornerstone Community Care 31-Mar-07 27.5 97.9 15 Rathbone Training 30-Jul-07 27.3 86.4 Date Arial Bold 10pt
- 9. Trends in corporategiving little growth in cash giving Value of corporate cash and in-kind giving 1200 Incl GSK 1000 Excl GSK 800 600 400 200 0 2001/02 2002/03 2003/04 2004/05 2005/06 Threats and/ or opportunities? •impact of CSR agendas •co-option of agenda through social capitalism and blended value Source: Charity Trends, CAF, 2006 •alignment with marketing
- 10. Wealth in places– the charitable trusts Charitable grant-making trusts have asset base of £38 billion, an investment income of £1billion But they are not a Rock………..grant-makers also depend on other sources Role? •strategic (change or maintenance?) £2.6bn •social justice? – the Woburn Collaborative •partnership (who?) •social investors (loans or grants?)
- 11. Trends in fundsavailable from charitable trusts Date Arial Bold 10pt
- 12. Trends in givingby UK general public UK Individual giving as % of GDP 1996 - 2006 2.5 US 2% 2 Who calls the shots? 1.5 1.1% 0.9% 1 0.5 •private giving is 0 dependent on a small number of – very 0 1 2 3 4 5 6 6 7 8 9 00 00 00 00 00 00 00 /9 /9 /9 /9 95 96 97 98 /2 /2 /2 /2 /2 /2 /2 powerful – individuals 99 00 01 02 03 04 05 19 19 19 19 19 20 20 20 20 20 20 •half of Rich List Giving is flat-lining – why? giving 2007 was two donors
- 13. Share of wealthand share of giving Share of Share of wealth % giving % Most wealthy 1% 23 7.3 Most wealthy 10% 56 21 Less wealthy 90% 44 79 should wealthy get more tax-breaks or more tax? •US-style reliefs? •role of major donors?
- 14. Emerging social investmentmarket blurs traditional view of ‘value’ - can be as either economic or social New players Old wine – new bottles private trusts Special banks government UCIT equity Triodos CDFIs Special funds Local Investment Funds Bridges Social Investment Venturesome Impetus •new independence or constraints? Adventure Capital Fund BigInvest •how far should sector go? FutureBuilders •who are the new brokers? CAN
- 15. The new brokers,intermediaries and infrastructure Services Providers Banking Charity Bank, Triodos, Unity Trust Microfinance - retail CDFI, Credit Unions Microfinance - wholesale ACCION, Blue Orchard, SIB? Investee/ charity information NPC, GuideStar, CaritasData Investment funds ARK, Impetus, CAN Investor/ donor advice NPC, UBS, Coutts, Big Give Performance measurement NPC, NEF Generic market information Global Economic Monitor (GEM) Accreditation and validation GlobalGiving, GiveIndia, Greater Good South Africa, CAF
- 16. Fragile organisational model? Socialenterprises strike a difficult balance between organisational goals, allocation of control rights, incentive structure and characteristics of the markets in which they operate While these elements allow social enterprises to adapt their internal organisation to the specific problems posed by the production of personal and collective services, they also make the social enterprise a fragile organisational model, extremely sensitive to changes in market conditions and public policies Bacchiega and Borzaga, in The Emergence of Social Enterprise, 2001
- 17. Who should guardthe third sector space? Generally, it's alarmist to claim that government is some malicious leviathan intent on colonising voluntary and charitable organisations. Anyone who knows anything about government knows it's not joined- up enough to do that. Government as a funder - like any funder - has a right to specify what it wants its money to achieve. The real question for charities - which, if they are delivering public services, should do just what they're paid to do - is who should be the guardians of independence? Third Sector, February, 2008
- 18. Expectations – ‘addedvalue’ funding Third sector Government Better services Major donors Social change Charitable trusts Social justice General public Market gaps Social investors SROI, innovation Companies Social responsibility Then the quote
- 19. Challenges of thefuture funding environment • new opportunities – new risks/ expectations • new stakeholders, new funding infrastructure bodies • sector fragmentation and specialisation • unrestricted funding? NEW! Recession! • strain, room to manoeuvre? • adding value/ transformational power - or driving re-engineering and co-option?