Social investment should not replace public funding, says shadow Treasury minister

Anneliese Dodds, MP for Oxford East, tells the Labour Party conference it should not replace statutory services that should be carried out by the public sector

Social investment should supplement, not replace, public sector funding for youth services and there is a “clash of cultures” between social investment and the charities it funds, a shadow Treasury minister has told delegates at the Labour Party conference in Brighton.

Speaking at a fringe event about social investment in the youth and community sector, Anneliese Dodds, the MP for Oxford East, said social investment was part of a “mixed economy” but should not be used to replace statutory services that should be carried out by the public sector.

“Where I am concerned is that sometimes some of the rhetoric seems to suggest this could actually shift into some statutory services, and for me the whole point is that it should be operating in areas where there is such a high level of risk that local authorities and public funding can’t cover it,” she said.

“I don’t think it should be moving into areas where ultimately we should have proper public provision and where we really need to have that stability of service quality, especially around statutory responsibilities.”

Dodds also highlighted a “clash of cultures” between the predominately business-oriented language used by the social investment sector and the actual role youth charities play in society.

“Even the language we use is really interesting,” she said. “We use the language of social entrepreneurs, but we are not talking about profit seekers but about people who are efficient in their use of constrained resources to get really good outcomes. Why do we attach the label ‘entrepreneurs’ to that?”

Other speakers at the event highlighted problems with the perceived complexity of social investment and about people’s understanding of how it worked.

Anna Smee, chief executive of UK Youth, said that acceptance of social investment was growing, but in the main because of charities’ problems in getting grant funding.

“Three or four years ago, people didn’t know what social finance was,” said Smee. “It was a really big and scary thing and seemed like this crazy David Cameron idea that would never happen.

“Now we are seeing much more acceptance of it, mainly because people have no choice – they’ve been driven down such a challenging funding route they were willing to consider everything.

“But most of the youth organisations we’ve spoken to still don’t know where to go. They’ve never heard of the key fund, they’ve never heard of Big Issue Invest, never heard of Nesta and all the infrastructure that has grown up over the past five years. They didn’t see it as something for them.”

Smee said that youth charities had typically struggled to collect good data and this needed to be improved. Best practice should be shared, she said, to help attract social investment.

Leigh Middleton, managing director of the National Youth Agency, said that many organisations were put off by the “significant complexity” of social investment agreements, and funders were still reliant on data and key performance indicators being met rather than more qualitative evidence about youth charities’ work.

Barry Williams, director of the youth charity membership body Ambition, said cynicism about social investment “is still out there” and he was concerned that some charities were hanging on for the return of grant funding rather than exploring alternative finance models.

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NCVO publishes guide on communicating with the public

Telling a Better Story About Charities, which is free, gives tips on dealing with the most often-asked questions about the sector

The National Council for Voluntary Organisations has published a guide advising charities on how they should handle questions concerning subjects such as aggressive fundraising and senior pay.

The free guide, called Telling a Better Story About Charities, includes advice on what charities should do to restore public trust, such as being transparent and using simple language rather than management-speak.

The umbrella body worked with the research agency BritainThinks to uncover key themes in the way charities work that appeal to the public and find out how to present them most positively.

The guide includes advice on how to answer questions such as “why do charities have volunteers at the same time as paying big salaries to staff?” and “why do charities hound people for money, particularly vulnerable groups like the elderly?”

It says media coverage has confirmed the public’s concerns about charities, not created them.

The guide includes suggestions for words and terms that charities should avoid when communicating with the public, such as “paid staff”.

The phrase “professional expertise” is preferable, it says, because it shows that charities employ staff without having to mention salaries and helps to show charities as experts in what they do.

The guide also says: “It’s worth underlining that actions speak louder than words, and the advice in this guide is intended to be complementary to taking clear steps to address issues the public are concerned about, not an alternative to doing so.

“Communications alone are not enough – we need to ‘show, not tell’ the public that we take their concerns seriously.”

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Charities ‘underestimate value of public trust’

An article in a series published by the think tank NPC, written by Jill Halford and Neil Sherlock of PwC, says improving and maintaining public trust should be deeply concerning to charities

Charities are underestimating the value of public trust and they should all be working to improve it, a new article claims.

The article, co-authored by Jill Halford and Neil Sherlock of the professional services firm PwC, says trust is “often an overlooked asset for charities”.

Trust typically features on the agenda only when things are going wrong, the article says, with research showing that nearly a third of charity leaders think a loss of trust in the sector would have no effect on their organisation.

“But trust matters deeply to people, and so it should matter to the organisations that serve them,” it says.

“Trust is considered a fundamental prerequisite of effective human interaction and meaningful, constructive relationships. It is the ‘glue’ that binds society and the economy together. There is a clear need for all organisations to take a broader view of trust.”

In order to build trust with the public, Halford and Sherlock say, charities should focus on such areas as “engaging with their stakeholders and the public in an authentic way” and ensure that they are consistent in their communication with the public.

Charities should also engage in what the authors call “radical transparency”, meaning they should demonstrate their willingness to be open about their operations and be honest when things have not gone to plan.

“Trust is precious and fragile, so building and maintaining trust with the public needs to be at the heart of any charity’s strategy and operations,” the article says.

“Just as businesses are considering their wider societal impact and purpose, charities too need to consider their impact and the relevance of their actions.”

The authors say charities should be leading the way in measuring and demonstrating their impact.

“Engaging with the public proactively, communicating clearly and authentically and considering your total impact will not only help in times of crisis, but also form critical building blocks to continued success,” the article says.

The essay is one in a series of provocative articles about the voluntary sector published by the think tank NPC last week.

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