Baroness proposes FTSE-style league table of best-value charities

News

Baroness proposes FTSE-style league table of best-value charities 8

Finance | Tania Mason | 17 Jun 2011

The voluntary sector should be renamed the ‘not-for-dividend’ sector and the biggest charities should be ranked in an investors’ league table according to the value they create, Tomorrow’s People chief executive Baroness Stedman-Scott said at the Bank of England today.

Addressing a gathering of government, finance, media and civil society representatives, Stedman-Scott said: “I do not like the term ‘not-for-profit’ because there is nothing wrong with making money – it’s what you do with it that’s important.

“I am actually not for loss. I’d like to see the sector rebadged as the ‘not-for-dividend’ sector, because making money is nothing to be ashamed of, and the more money people make the more they can help us deliver what we do,” she said.

She was speaking at the launch of an independent analysis of her charity’s work over the last five years, which estimated that each pound invested in Tomorrow’s People saved or made the Exchequer at least £2.40.

Stedman-Scott urged charities to be transparent about the impact they have on society and unafraid to compare themselves with others operating in the same space. She said the government should be able to properly compare bids for contracts on the basis of value provided, not just on price, so it was up to charities to provide the relevant information.

Social FTSE in financial pages

She said it was her vision to augment the financial pages in newspapers with an extra page showing the “social FTSE – the top 100 in the not-for-dividend sector that people might want to invest in, that provides the same kind of ratios and information to help them make their investment decisions. And I think people would be absolutely surprised to see who was giving best value.”

Filippo Cardini, chief operating officer at private equity firm Towerbrook Capital Partners and a trustee of the Towerbrook Foundation which invests in Tomorrow’s People, said he “violently agreed” with her.

“The dividend that Tomorrow’s People can deliver is very powerful and I think we should be looking at best-in-class performance,” he said.

He said measurement and comparison was perfectly normal in other areas of life: “It’s how we live our lives and I see no reason why there should not be a similar approach in the social sector.”

Pratik Dattani, the FTI consultant who carried out the Tomorrow’s People analysis, said the report was an “opening salvo” in working out how to compare providers operating in the same space.

Stedman-Scott acknowledged the difficulty in persuading other charities to be as transparent but said she hoped this report would stimulate the sector. She also urged ERSA, the trade association for the welfare-to-work sector, and Acevo to work with their members to encourage better transparency.

Click here to read more about the Tomorrow’s People evaluation.

Directory: Tomorrow's People
Who's Who: Deborah Stedman-Scott

Place a comment

Aidan Ward
Partner
Fractal Consulting
30 Jun 2011

This is all backwards and inside out. Good charities do things better and they do things differently. Diversity is central. What they need to demonstrate is that by doing things their way for their reasons from their values something useful is achieved for us all. What I want to know as a philanthropist is that I have a partner who can enact values that others have forgotten or chosen to ignore. This is about the change model, not about monetised "outcomes". The private sector equivalewnt is a high value niche market.

[Reply]

Dawn Varley
20 Jun 2011

Agree with Ben, and thank you Charles for tweeting to alert me to that very valid DSC comment!

My first thought on reading this was that the Baroness had failed to prepare her speech until the night before, and then jumped on the first band-wagon she could. Hey, could have been all about abolishing cheques - so maybe we got off lightly...

On a more serious note, the charity sector is too rich in width and bredth to be simply compared. An element of care and attention is required to understand who, in your relevant field of interest, delivers the most/the best/the richest results - and once time is taken to investigate that you can then invest your money where you think fit.

The term 'not for profit' is plain English, and there is no need to get pedantic about it, it just serves as another distraction when we should just get on and do the good work we do.

[Reply]

Charles Bagnall
Charity Consultant
IRIS NFP Solutions
20 Jun 2011

Unhelpful though his comment may seem, I tend to agree with Ben. 'Not for profit' is the tip of the iceberg here - what do you mean by 'investment decision', what is a 'return', what about all those charities whose expenditure does not replace government expenditure? For example, we don't reduce the Overseas Aid budget because Save the children and Oxfam etc are spending more. League tables inevitably hide truths and distort facts. There is already a system that works and it is competitive tendering. We know from the rigour applied in our fundraising-request management systems, that whether major funds come from private, statutory, or trust sources, the detail and transparency required from initial approach to final instalment is enough to ensure that the funder can be sure they are getting best value. NFP FTSE is a tempting concept, but on reflection 'argh' is an apt comment.

[Reply]

Ben Wittenberg
DSC
20 Jun 2011

AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAARRRRRRRRR
RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR
RRRRRRRRRRRRRRRRRRGGGGGGGGGGGGGGG
GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG
GHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH
HHHHHHHHHHHHHHHHHHHHHHHHH!

[Reply]

Justin Coleman
Director of Transition
2nd Chance Project
18 Jun 2011

I can see your point, however we need to be ensuring organisations work together, there really shouldn't be a race to win! Its people we should be focussed on, not league table's! The real answer in my opinion is that for all organisation such as this, a simple bench mark and monitoring system is put in place, but rather than asking the staff, ask the clients. If this Bench mark service was placed in Universities, it could be published every year, then you will have a true reflection of who is doing what!

[Reply]

Carl Allen
17 Jun 2011

The term is not-for-private-profit.

FTSE is not an approach that describes a extremely varied sector where size is not a dominant indicator of benefit or problem solving or even charity by quality or quantity.

[Reply]

Rob Jackson
17 Jun 2011

I wholeheartedly agree with the Baroness on the term not-for-profit. It is a ridiculous phrase that fails to describe what charities and voluntary bodies do with their funds. Furthermore it opens doors for emperors-new-clothes style concepts like social enterprise to try and claim as new what many organisations have been doing for years.

As to John's comment about the time finally coming for charities to prove their worth, I would say to whom? Ask the beneficiaries of any charity and I think they would argue that charities are extremely worthwhile. These are the people to whom an organisation's worth is most valued and appreciated. Surely that is the basis on which they should be judged rather than some third party responsibility standards.

[Reply]

John Thompson
Director
Changing Business
17 Jun 2011

A Charity4Good index designed along similar lines to that of the FTSE4Good index series, and looking to rank (major) charities by an agreed set of responsibility standards, is an idea I've thrown around since 2006. Indeed, it was mentioned in Professional Fundraising's "Agent Provocateur" piece by Steve Crump, former director of fundraising at Whizz-Kidz, 1st September 2006 and entitled:

"Time for charities to prove their worth"

Maybe that time has finally come?

[Reply]

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.