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.