The Road Ahead: why the #volsec should be optimistic about the future

Note: A longer version of this post forms the opening section NCVO’s The Road Ahead, our annual overview of the operating environment and how external forces will shape the future of the voluntary sector. A version of this post also appears in Civil Exchange’s forthcoming book, Making Good: the Future of the Voluntary Sector.

I think we should be more optimistic about the future of our sector

The period since the 2008 financial crash has undoubtedly been difficult for the voluntary sector. This has arguably been a period of structural change, rather than simply the bottom of the voluntary sector’s economic cycle. A profound, permanent shift in relations with the state, digital disruption and changing social attitudes regarding welfare and how to address social problems have created a heady mix of issues for voluntary organisations to deal with. But I can’t but help think that reports of the sector’s imminent demise – which one might conclude from reading a couple of the essays in Civil Exchange’s forthcoming book, Making Good: the Future of the Voluntary Sector – are greatly exaggerated. (You can read some of the essays here.) While confidence can easily be characterised as ignorance or, worse, indifference to the plight of many organisations at the moment, I think that there are strong arguments for the sector to face the future with an attitude of what David Barrie called militant optimism.

Resilience: the new sustainability

Why so? It’s first worth noting that during the worst recession in the post-war period, the voluntary sector is still very much with us. Resilience is the new sustainability. The Charity Commission continues to register new charities at a rate of 5,000 each year, whilst the number of Community Interest Companies is now around 10,000. In real terms, the sector’s income peaked in 2008/09 at almost £41 billion, but our latest estimates of £39.2 billion in 2011/12 shows a sector where charitable giving is now stable, with income from the public as a whole rising. Whisper it, but I wonder if parts of the sector are thriving?

The exception to the stability picture is income from statutory sources, now on a downward curve for the foreseeable future. Often mistakenly referred to as government funding, this long ago switched from grants to contracts as the basis for the relationship; another common misapprehension is that ‘the sector’ is widely funded by government, yet three-quarters of organisations have no direct relationship with a statutory funder. But even here, there may be cause for optimism. An ongoing government deficit (and a yawning public debt requirement), combined with an ageing, atomised and more demanding population might well point to more radical solutions to managing (and reducing) demand for public services, such as combating isolation through neighborliness or alternative approaches to treatment such as social prescribing. Add in imminent changes to EU procurement rules, the potential for the Social Value Act, and a dash of localism, and there may well be scope for greater community involvement in the services we use.

Maybe. But even the burning platform of statutory income is driving different thinking in many organisations. The sector as a whole is again thinking about alternative financing models, such as the use of loan finance (not unfamiliar to charities such as Toc-H as they tried to build their capacity during WWI), microfinance (especially using web-based platforms) and crowdfunding. These models and mechanisms aren’t right for everyone, but they suggest a willingness to think differently and a resourcefulness characteristic of the innovative capacity we in the sector justifiably like to talk-up. They also suggest a sector that is looking more downwards to its grassroots supporter base (or as David Barrie calls them, the ‘grasstops’), instead of upwards to government funders.

More contentiously, we might be seeing a sector that is more interested in sharing assets than owning them (so-called collaborative consumption), and more awake to the possibilities of ‘resource raising’, not just fundraising. There is increasing interest from the private sector in working with the voluntary sector, but the dominant mode of engagement is no longer handing over cash: sharing skills, networks, assets and time are the modus operandi. And there is emerging, anecdotal evidence that more organizations are rethinking their operating models: amid talk of lean startups, digital by default and agile working, we are hearing of more organisations thinking about how they redesign services around users. Some are using data and evidence to focus resources on interventions that make the biggest difference. Others are looking to learn from other sectors. Many argue that they are becoming more efficient and effective in the process.

The rise of social action

A final cause for optimism is the strong will to change the world for the better amongst those in their 20s and 30s, the Millennials (or Generation Y) and their successors, the so-called Generation Z. Britain has long relied upon a civic core of volunteers and donors who have given a disproportionate share of total time and money, but we should find optimism in the emergence of ‘social action’ amongst the Millennial generation – self-organised, digitally-enabled, friend-focussed (particularly if it can learn from its elder sibling). Indeed, there is evidence that the current cohort of young people are more likely to get involved than previous generations did at the same age. I think we are seeing their imprint in the increasing number of social entrepreneurs, often using digital tools and platforms, seeking to ‘do some good’.

All well and good, but the rise of social action and the Millenial generation brings with it a challenge. We have long noted the blurring of boundaries between the public, private and voluntary sectors, with resultant challenges of distinctiveness and values. It has been argued that the Millennials are ‘sector agnostic’: they don’t care which sector they work in, and may even find the notion of sector old-fashioned, they just want to make a difference. Can charities, voluntary organisations and community groups show to the Millennials that their tried and tested models of organising, governance and financial sustainability are the best way to make a difference?

A trend is a trend is a trend…

My own militant optimism is that they can. I encounter a small but growing cadre of managers and trustees, volunteers and social entrepreneurs, who think that our sector is different to business and government, and I think that we have to follow their lead. I think they’re determined that we have to solve our own problems, not simply look to government. They’re thinking about a blend of funding and finance, and are open to how digital can help modernise their operating model. They’re focussed on impact, using data to evidence what works, and not just to produce reports to funders. And they recognise that the world has changed, and that we can’t hanker after some golden age when everything to do with the voluntary sector or volunteering was so much better.

To end where I began, these remain incredibly challenging times for many organisations, particularly those on the frontline, dealing with changes in welfare and the aftermath of recession. Not everything, or everyone, will be OK. But there are enough examples out there of organisations, old and new, that are finding ways through the current duress and starting to plan for the upturn: to quote futurist Ged Davis, “a trend is a trend is a trend, until is bends”.

Now what?

If you want to read more, and see some of the evidence behind these trends, you can download The Road Ahead for free. Over at Knowhow Nonprofit we’ve got some planning tools that can help you think about your own strategy.

And finally, here’s my slideshare you can use if you would like some images to match our analysis. And of course, leave your thoughts below!

Image credits: Andertoons, Tulipnight, Toc-H, PulpoMizer