Could you solve society’s problems on a shoestring budget?
It won’t take long for the debate on charity salaries, sparked by “a warning” from William Shawcross, Chairman of the Charity Commission, to burn itself out. Below the line comments from the public fizz with outrage, and every bad experience with any charity, and every third-hand story of corruption or waste, is added in as evidence of the sector’s malfeasance.
The sector responds, quite reasonably, that many charities are complex organisations responsible for vast budgets and able to touch thousands of lives; they need experienced, capable people overseeing their operations. On Twitter, sector professionals react with a little more passion. But soon everyone will forget about it again.
This mini-storm won’t tackle the real problem of charity spending, which is that public understanding of how charities operate is woeful. Mindful of public hostility to spending on anything more strategic than food parcels, charities are hesitant to invest in the research, infrastructure and capacity they need to make the most difference. The views of the public, and it seems Shawcross too, might be summed up as “charities should solve the biggest problems in the world, in the face of mighty vested interests, on a shoestring budget, helped by one volunteer and her dog working for free”.
At Impetus – The Private Equity Foundation we take a different view. We believe any organisation with an intervention proven to change lives for the better should strive to reach as many people as possible. This means investing in good governance, performance and impact management, and getting the right people into the right roles. We back charities and social enterprises to do this with funding, intensive management support, and strategic pro bono expertise, because the best way to grow an effective intervention is to grow the strength and sustainability of the organisation that delivers it.
Dan Pallotta, in a recent TED talk, which is beautifully summarised here, reminds us how businesses that have changed the world invest time and money in developing the optimum “product”. They take big risks, not all of which pay off, but each help pave the way to success. Along the way, they pay some pretty high salaries to get the talent they need in senior or specialist roles. In the context of the voluntary sector, separating this kind of spend – on infrastructure an organisation needs to grow – from “the cause” or “the front line” is utterly self-defeating. Without it, you can guarantee that the solution a charity offers will stay small and local, while the problem it was set up to tackle grows ever bigger.
Are we to believe that the Charity Commission are not aware of the growing body of research and evidence on how charities can best scale, and the fact that, like for any organisation, spending on people and capacity is a significant, and frequently neglected, part of this? They should know this and also that charities haven’t been very brave at tackling perceptions on this – let’s face it, a big public education campaign wouldn’t come for free, and there’s always something more urgent to spend the money on.
So why doesn’t the Charity Commission use William Shawcross’s position to do this instead? It might even help the Commission meet its statutory objective to increase public confidence in charities. A blast against CEO salaries absent of context is shamefully unbalanced, and irresponsibly plays to the gallery of those who want to believe that all charities are ineffectual at best, and corrupt at worst. This comforting belief relieves people of the need to engage with the complexity of the problems charities are trying to solve, and of the responsibility to be a part of the solution. Let’s hope that Shawcross’s next public foray aims more to enlighten and educate, and less to shore up the same old prejudices.