Commissioning practices are deterring social investment, says CAF

Finance | Tania Mason | 5 Oct 2012

Public sector commissioning practices are creating barriers to social investment in the charity sector, according to a new report from Charities Aid Foundation.

The report, Funding good outcomes - using social investment to support payment by results, cites experience from CAF’s own social investment arm, CAF Venturesome, which has been trying to help charities access the finance required to help them win statutory payment-by-results contracts.

Venturesome encourages social investors to invest in charities that want to win these contracts but lack sufficient reserves or capital needed at the outset to get the work off the ground.

However, it is finding that current commissioning practice make it too difficult or risky for social investors to get involved. They are deterred because officials give them too little time to properly assess contracts.

CAF’s report comes just a day after the NCVO published its own report exposing charities’ experiences of the Work Programme, the government’s flagship welfare-to-work scheme that only pays organisations if they meet certain targets of getting people into work. Nearly three-quarters of charities involved in the Work Programme says that they think their contract could fail before it ends.

CAF is calling on ministers and public service commissioners to guarantee a proportion of payment up-front to fund start-up costs, and to give social investors more time to assess risks.

John Low, CAF chief executive (pictured), said: “Charities simply cannot afford to take on contracts to tackle social problems without up-front funding because they are not allowed to carry large financial reserves and have limited access to capital compared to for-profit businesses.

“Many social investors are eager to help charities and non-profit organisations get involved in public service delivery, but more could be done to help them take up publicly-funded contracts.”

Directory: Charities Aid Foundation
Who's Who: John Low

Comments

[Cancel] | Reply to:

Name *

Email *

Organisation

Job Title

Comments *

Verification *

* Please read our Community Standards

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

Robust but respectful debate
Strongly held opinions
Intelligent relevant discussion
The sharing of relevant experiences
New participants

We will not publish:

Rude, threatening, offensive, obscene or abusive language, or links to such material
Links to commercial organisations or spam postings. The comments board is not an advertising platform
The posting of contact details for yourself or others
Comments intended for malicious purpose or mindless abuse
Comments purporting to be from another person or organisation under false pretences
Gratuitous criticism, commentary or self-promotion
Any material which breaches copyright or privacy laws, or could be considered libellous
The use of the comments board for the pursuit or extension of personal disputes

Be aware:

Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
Comments left by others may not be accurate, do not rely on them as fact
You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

Enjoy the opportunity to express your opinion and respect the right of others to express theirs
Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.