Now is a pivotal moment for the independence of the voluntary sector, says Dame Anne Owers.

The Panel on the Independence of the Voluntary Sector was established in the summer of 2011. We have now completed an initial consultation exercise and published the first of five annual assessments. This article focuses on what independence is, explains why it is important and looks at some of the challenges that the current funding climate creates.

The Panel brings together seven people with different experiences and knowledge within the sector. Our aim is to increase awareness of the nature of independence and
the factors that affect it, demonstrate its importance and generate positive changes in practice, as well as improvements in monitoring.

Our initial consultation document, The Independence of the Voluntary Sector, was published in July 2011 and sought views from across the sector. As well as receiving a good number of very thoughtful written responses, many of them from grassroots organisations, we have also held discussions with a range of individuals and organisations. In addition, we have taken a close look at relevant research and other evidence.

What is independence and why does it matter?

The Panel has broken independence down into three key elements: purpose, voice and action. We have looked at the environmental and organisational factors which most
affect independence, which we have set out in a Barometer. This definition was generally well received by those responding to the consultation.

Independence is important both for the voluntary sector as a whole and for individual voluntary and charitable bodies. They form part of a vibrant and democratic society and can provide a voice, a sounding-board and sometimes a counterweight to entrenched public and private-sector interests.

Independence of purpose and action is also critical. That makes it possible for voluntary organisations to meet diverse needs that are often not recognised or properly
met by statutory provision or the private sector. Even where a statutory service does exist, independent voluntary sector bodies can bring additional strengths. In some cases, they are more trusted by clients than statutory services. They may have specialist knowledge and a commitment to those they work with that make them well placed to provide sensitive, tailored and highly-effective services. That is particularly the case for hard-to-reach groups, such as offenders, those with drug or alcohol problems, the homeless, minority communities, or those who are outside the job market – all of whom may be suspicious of the motives and approaches of statutory services.

Charities are also trusted by the public: Ipsos Mori research commissioned by the Charity Commission showed that in 2010 75 per cent of people thought that most charities were trustworthy. Maintaining independence is part of maintaining that trust, focus and mission and essential to maintaining the public support, through donationsand volunteering, on which much of the sector depends.
It is also about protecting the unique contribution of a sector that is rooted in communities and individuals. If the voluntary sector becomes, or is seen to be, simply a delivery arm of the statutory or private sector, or if it loses sight of its core mission, it will lose both public trust and its reason for existing.

A pivotal moment

It is clear that this is a pivotal moment for the sector and its independence. Voluntary sector engagement with the delivery of public services is not new. By late 2010, nearly a third of voluntary sector organisations reported that they were delivering public services. Funding from statutory sources, rising by 60 per cent in the first eight years of the century, has been a major engine of growth.

Inevitably, public funding – or the lack of it – dominated many of the responses to our consultation; but the issues are complex and challenges vary. For example, the sector’s growing dependence on statutory funding carries the risk that organisations could become too close to government or local authorities, and more responsive to pressures from above than to the needs and demands of the communities and individuals they exist to serve. But other sources of funding and support – whether private philanthropy or particular interest groups – can also present challenges.

It is not, however, simply about the amount of funding: a key element is the way in which funds for service delivery are now provided and the role that voluntary sector organisations are expected to play – the growth of commissioning and contracting under successive governments.

The combination of significant cuts in public services and to local authorities, the drive towards commissioning through contracts and the simultaneous effect of financial
pressures on philanthropic giving has placed many voluntary sector organisations in new and difficult territory. Some are facing the choice between survival and suboptimal funding or delivery arrangements that can threaten independence of purpose, action or voice.

Of course, there are opportunities as well as challenges – a recent NCVO survey of chief executives suggested 38 per cent were still expecting to increase services.

There are particular issues for those voluntary sector organisations that work with marginalised individuals – the homeless, offenders, people with mental health problems,
asylum-seekers, socially-excluded and vulnerable people and families – whose work inevitably relies, at least partly, on public funding as they are unlikely to be able to attract sufficient philanthropic support to be self-sustaining.

Smaller voluntary sector organisations are also clearly struggling with the bureaucracy and costs of tendering for public sector contracts; and the recent negative experience of some voluntary sector subcontractors in the Work Programme, which has been well documented by the NCVO and others, also give rise to concern.

For many voluntary sector organisations, the scale and pace of change over the last 18 months has meant that survival, rather than concepts, is the issue at present. But it is precisely when hard choices have to be made that the values of an organisation and the reasons for its existence need to be recognised and supported, both within the sector itself and by government, regulators, donors and private sector contractors. Strong governance and effective regulatory structures are particularly important in maintaining and supporting independence. It’s also important not to lose sight of the distinctiveness of the sector, as it works more closely with the private and public sectors.

We explore these and many other points further in our first assessment, which you can find here. Over the coming year, in preparation for our next annual assessment, we want to deepen our conversation with voluntary sector organisations facing challenges or opportunities, recognising that experiences will vary greatly across the sector. If you have examples or points you would like to make, please send them to the Panel on [email protected].

Dame Anne Owers chairs the Panel on the Independence of the Voluntary Sector