The concept of collaboration between charities has been in vogue in recent years.
A major source of pressure to collaborate has been from government, via a contracting system which rewards scale at the expense of smaller providers, but collaboration has also been mooted as a way of ameliorating charities’ financial challenges.
Sector commentators see 167,000 registered charities and conclude that efficiency savings could be found if they were to work together more.
It is therefore refreshing that this month’s cover feature in Charity Finance magazine presents a more balanced view of the challenges that come with collaboration.
Siv Vangen of the Open University’s Centre for Voluntary Sector Leadership argues that yes, collaborations can be fruitful, but they contain inherent tensions which require time and effort to work through.
Collaborations with other organisations, therefore, should be avoided unless the partners have differing expertise that can combine to achieve something the individual charities couldn’t achieve on their own.
Otherwise “the cost of collaboration far too easily outweighs the benefits”.
Elsewhere in this month’s issue, we have looked at the equally tough challenges of getting charities' internal staff to work together.
“Silos” have been a problem for charities as long as I have been writing about the sector and probably for much longer. It is therefore positive to hear how charities such as Mencap, the British Heart Foundation and Cancer Research UK have put in place substantial initiatives to break these down.
Those who are willing to take on these challenges and are looking for more on collaboration might take a look at the ACCA’s paper titled CFOs and the C-suite – focusing on effective collaboration. Although written for businesses, it contains some useful strategies and viewpoints.
One of these is the role of collaboration in facilitating innovation. It cites the example of the space agency NASA, which has been opening up to the public via crowd-sourcing, resulting in some “novel ideas”.
The consumer goods corporation Proctor & Gamble, meanwhile, set a target that half of its products should come from internal labs and half should come from external collaborations, which brought about “a large wave of innovations”.
Of course, charities which don’t have a scientific bent will not have major research and development needs like this. But nevertheless, they can look to improve their service provision and fundraising activities by listening to the ideas of beneficiaries and other stakeholders online and in person.
Role of the finance director
The report also contains some interesting thoughts on the role of the finance leader in providing advice across the business.
It outlines how the CFO often needs to work to secure a mandate from other senior executives to bring value to the organisation beyond holding the purse strings.
While “bringing the numbers to life” and building complex future scenario plans will be a big part of this, building and maintaining strong relationships are also crucial.
As the report puts it: “It is important not to ‘push’ the decision-making support onto the organisation but to create a ‘pull’ from the business, which can only be achieved through a strong collaborative process.
"This usually takes time and commitment, and cannot be forced.”
This is a useful reminder that if finance is to exert a proper level of influence across a charity, interpersonal skills and a collaborative mindset will be important assets.
Gareth Jones is editor of Charity Finance magazine