0 Effective Local Economy

I have discussed a new vision for a national localised economy. It would run alongside the neo-liberal economy. It needs to be rebuilt following the rise of neo-liberalism in the 1980s.  Today I shall describe three qualities I see in the retail co-operative movement that I believe led to its successes.  These are just as applicable to localised economies today as they were in nineteenth century.

Democracy

The retail co-operative movement, in common with all types of co-operation, thrives when its members share decision making. The UK retail co-operatives have struggled with this concept in recent years because they have become  large remote institutions.

The early co-ops were successful because their members were enthusiastic and could see the impact of their decisions first hand. They learned from their own and others successes and failures.

Many small retail co-operatives created the massive institutions we see today, by working together to create networks for wholesale (for example) to serve their interests.  They were pioneers and most of the large retail empires we see today are copying the old co-operatives.  Contrary to political rhetoric, it is democratic institutions that find creative approaches and not top-down experts.

Education

It wasn’t the dividend that kept them going, it was their vision. The first retail co-op at Toad Lane in Rochdale had a library and meeting room above the shop from day one. Education of the membership was central to what they were doing. They learned not only the practicalities of setting up and running a co-op but also how mutual principles can transform society for the better.

Perhaps these days people are less likely to voluntarily go to regular meetings for education but maybe online education can to some degree replace those meetings.

Quality

The Rochdale Pioneers founded retail co-ops to tackle food adulteration. They were able to guarantee the quality of their products to their members. Where people know one another and work together they are in a better place to establish their quality standards.

The retail co-operative movement was the first movement of active consumers. They were not just consumers but actually members, a part of the movement. For all the talk of the consumer economy, we have lost sight of what it means to be an active participant in the economy.

The local economy is an opportunity for everyone to take responsibility for the environment and the shape of society and not to leave it in the hands of government or the corporations.

0 Relationships in Community and Marketplace

This post is a deeper  reflection on a comment  I received in a recent post about needs assessments.  A question raised was about my use of the word ‘client’ and the comment made the point we should be aiming for active citizens and not clients (who have things done to them).

Community

Whilst this post will clarify terminology, there is an underlying issue about the types of relationships we build either in real life community organisations and marketplaces or online.

I want to challenge the idea of community.  It is a word that apparently has over 100 meanings and in my experience its use is generally misleading.

For example, I avoid using “community” when I mean a geographical area, preferring “neighbourhood”.  “Community” implies relationships within a neighbourhood and in my experience these are often ideals projected onto a neighbourhood.  These days I prefer to substitute “marketplace” for community.  A thriving marketplace is evidence of a strong community.  If there is no unstructured place where people can naturally meet, then it is difficult to see how there can be community.

Community arises from the interactions in a marketplace and does not existing independently of it.

Active Citizens

So, active citizens are  equally those found behind the stalls in a marketplace and those setting out their stall by offering products, services or leadership to further a cause.  Voluntary or charitable activity happens in marketplaces, if only because the market is where they find support.

Clients

Perhaps at the other extreme, there is the client.  The client has no direct voice in the delivery of the service they receive.  Usually clients are the beneficiaries of services financed from elsewhere.  Accountability is to the funding body or donors.  Clients may provide feedback but changes to the service must be agreed with the funding body.  Services for clients usually collapse when the funding runs out because the clients are not organised.

Customers and Consumers

Another word used to describe relationships is customer.  This word has suffered from right-wing rhetoric.  First, it is a better word than consumer, which implies the role is to consume and requires no relationship.  Any business person knows the difference.  A customer is a relationship built over time, and a customer will return and make more purchases because they trust the business.  Consumers make one-off purchases and then disappear.  Whilst their money might be welcome, there is no ongoing relationship.

I purchased a suite (sofa plus armchair) about 20 years ago.  I still receive mailings by post from the business who produced it.  I have never responded but at the least it means I remember their name and might recommend them to others.  Presumably some people do respond to their mailings.  They see me as a customer after all these years.

Prospects

Another relationship important to businesses is the prospect.  These are people who have expressed interest but have not committed to a purchase.  They can support a business they like even if they never make a purchase, by spreading the word.  The aim though is to build a relationship and hope trust will lead to the prospect becoming a customer.

Customers and prospects have a say in the business.  Their needs (and wants) are important to the business and the best businesses will respond to them.  They develop new products and services in response to feedback from customers and prospects.  This is not the same as a client relationship because there is direct interaction.  Of course the business is not a democratic organisation.  The owners make their own decisions about the products and services they develop but they depend upon their customers and prospects to inform those decisions.

Consultors

Another word I use is “consultor”.  This is a particular relationship between a consultant and their customer.  Some consultants treat their customers as clients.  They will always need feedback from them but they are there to deliver expertise their customer lacks.  For non-directive consultancy, however, the starting point is the consultor has the expertise.  The role of the consultant is to help them think through their problems.  Sometimes, for example, a problem has an emotional dimension and the consultor needs someone who is not emotionally involved to help them see things in a different light.

So, some of these are roles an active citizen might choose.  They might choose to be a prospect, customer or consultor, because they need to take part in something.  They are less likely to choose the role of client or consumer, although they are roles we might take on where nothing much is at stake.

Do you use other words to describe relationships?  Let me know in the comments.

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0 A Look Inside a Needs Assessment Questionnaire

Last Thursday, I explained why needs assessments are helpful and today I shall review my needs assessment questionnaire. Check out my description of what my needs assessment involves. You will see where the questionnaire fits into the assessment. Next time I shall discuss how I deliver the assessment.

The current questionnaire is daunting. It has nine sections and aims to trigger deep thinking about the organisation. Follow completing the questionnaire with a conversation; it is not necessary to complete all the questions before the conversation. Often in conversation new ideas emerge and sections that started difficult can become easier to complete.  Some organisations may not have previously met anything like this and so may need more support.

Here is a brief description of the nine sections of my questionnaire:

Web Presence

The consultant will want to review the organisation’s current web presence and so needs the details of everything the organisation has online. Be aware of likely issues such as the current site controlled by a previous designer. A surprisingly common problem that may need to be resolved before the client changes their site.

Personnel

This section helps picture the people involved with the organisation and the skills or experience they can offer to its online work. Most organisations need to build their capacity to maintain their web presence, and this helps assess their current capacity and potential to develop it.  Some organisations will want to develop their own site and others will need to maintain a site developed for them.

The questions cover the skills of people who are directly involved and whether there are others who might be invited to be involved with the website, eg as guest bloggers.

Marketing Plan

This section reviews  aims and objectives, hopes and fears, frustrations with performance, etc.

The aim is to encourage deeper reflection about the organisation and what it wants to do online.  Many organisations want a website and have given little thought to what they need it for and often find they do not appreciate what their site can do for them.

Development Plan

This section is about finance and the organisation’s aspirations. Many organisations focus on balancing their current accounts and this section invites them to consider what they would do if their income increased significantly beyond their current expenditure. This is an important question because it can unearth aspirations that would otherwise remain obscure. With such objectives stated, it may be possible to include them in the objectives of the organisation. They are not always so expensive and it may be possible to meet them, at least in part, with lower income.

Products and Services

Products and services are things to sell or give away. A product  can be replicated and sold to many people. Tailor services to the needs of each customer. Both products and services can be real life or online.

This section goes into a lot of detail about the information the organisation owns. Many organisations have material they can turn into products and skills they can turn into services and they are not aware of the potential of what they own. Some organisations may be sitting on a goldmine. Others may be able to generate modest income online, supplementing their work. It is important to make sure this work progresses the organisation’s wider aims. Money is a means to an end and not an end in itself.

Some organisations may want to give stuff away and do not need an income. There are pros and cons to this approach. It needs to be considered in the wider context of the organisation’s objectives.

Market

To design your web presence, you need to be as clear as possible about your market. Some organisations have a membership list and / or a list of web subscribers. These contacts will not only join purchase products and services, they will also pass on information to friends and other contacts. This is why it is important to add stimulating material to the website, as this will appeal to new contacts.

These questions cover the current contacts the organisation has as well as potential contacts they have yet to reach.

Partners

Partners are organisations who support or might support the organisation’s work. These questions cover current partners, potential partners and competitors.

Communications

These questions assess capacity to communicate with market and partners; including mailings lists, which can be stored in a variety of media and covers social media.

Equipment

This is about equipment organisations can use to develop products and services.

This summarises my current needs assessment questions. My plan is to review them in the near future. There are other systems which might have a better fit to my market. Next time I shall explain how I use these questions and alternative options for their use.

0 Third Sector Organisations in the Marketplace

Funding is a major issue for Third Sector organisations unless they have sufficient reserves to keep themselves going, increasingly problematic where there are low interest rates.

The main sources are either donations or grants. Dependency on donations puts an organisation into a particular market and I have discussed how to build a website for donations in some detail.

Grants have many advantages but also significant disadvantages. They are a significant industry in their own right, and with the recession many groups are finding it increasingly difficult to get access to continuing funding.

So, another approach is to trade and this can present problems for third sector organisations. There are three main issues found  in many third sector organisations. Successful organisations work out how to transcend these problems.

“We’re Not a Business!”

I’ve heard this several times in recent months. It may be a UK mindset because in other countries businesses and community organisations are natural allies. Many of the techniques used to generate and implement ideas, were developed by church, community and industry; sharing, developing and sharing again many familiar techniques such as brainstorming.

If you don’t think you’re a business then you don’t act like a business. So, for example, a group opposed to business may think it is competing with businesses and so, bizarrely, third sector organisations can be unnecessarily aggressive in the marketplace. This might be expressed as moral superiority but the result is they are not trusted by business people who generally work by building relationships.

Of course, there are businesses out there that haven’t understood how relationship building is at the centre of any successful business. The community group that encounters such businesses will have its prejudices reinforced. But the rule is to build alliances wherever you can.

But it is not only that third sector organisations don’t think like businesses, they seem to be less driven than businesses. Members are not personally dependent upon making sales to pay their bills. Paid staff, whose income is from grants are resigned to moving on when the money runs out. Most volunteers have their own sources of income.

An organisation whose members have no personal financial incentive is not going to work in the marketplace. This is why the retail co-operatives were so successful; everyone could see how the co-op would be of direct financial benefit to their household.

“We’re Ethical and They’re Not!”

Yes, some businesses are not ethical and they make the news headlines. Whether they are individuals who con people or massive corporations, salting away the country’s finance in offshore accounts, we definitely hear about them.

But many businesses are ethical. For a start many people who set up businesses are driven by ethics. They may find they have to compromise their ideals but at least they’re trying. Others perhaps start out with a more pragmatic approach and then learn from experience that an ethical stance is pragmatic.

The problem in the third sector is the idea that we’re ethically superior because we’re volunteers. The cause may be ethical but the means used to support the cause are not always squeaky clean.

Occupying the moral high ground is not a good place to start. If you want to take part in the marketplace, you have to make deals and any business will want to know what’s in it for them. Successful business people get dozens of requests for help. They will be interested where there is mutual benefit. They will never do anything that does not benefit their business and especially they will not enter alliances with people who might inadvertently draw them into ill-repute.

So, a poorly run small community organisation will not get support from business because businesses will not see them as a viable concern.

“We’re the Community!”

Oh dear! I want to know who I’m talking to. You might be an organisation but I do deals with people not organisations. I know how seductive and stupid organisations can be. I’m not going to make a deal with a genuine person who might be replaced by a charlatan at the next AGM.

You might be a member of a community organisation and your officers might be drawn from the neighbourhood. Self-help is respectable but any business will want to see evidence that as a group you can manage your affairs.

If it’s not clear who is in charge and will be in charge over during the collaboration, then you will need to work harder to show you can honour the agreement. If it is a named person then the personal integrity of that person is important, just like the business owner’s integrity on the other side of the deal.

The reason the world does not owe the community self-help group a living is because the group has to prove itself. Declaring that I (or we) am (or are) going to do something is not the same as doing it!

It is much easier to do deals with real people who have a track record and are no more likely to melt down than a small business. There are alternatives, where leadership is more diffuse but also reliable, see for example Citizens’ Organising, but they still have to prove they can deliver.

Being the community is not an advantage. It is a circumstance thrust upon a group of people because they have no other choice. The social entrepreneur will show what they can make of such circumstances.

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0 Third Sector Ideologies

I’ve reviewed several common tropes in third sector thinking; its anti-capitalism, inclusion agenda and dependence on grants. One underlying theme is an emphasis on ideology.

There are many attractive ideologies in the third sector and they drive the agendas of highly effective organisations. Pragmatism might be a good way to get things done but perhaps a few ideals will keep you going during the difficult times.

The problem is not with any particular ideology so much as a tendency to build on ideologies. Where what you believe becomes more important than what you do, problems are likely to set in.

Ideology and Business

There have been news items about businesses that won’t serve gay couples because they are Christians businesses and genuinely believe it’s wrong to do so. They are allowing a particular ideology to run their business. They may represent themselves as victims of discrimination against Christians even though it is they who are discriminating.  Whilst I don’t doubt they are sincere in their beliefs they are profoundly wrong about Christianity and business.

There are many Christians who have no problem with gay couples.  Business is about building positive relationships and so using it to exercise power sits awkwardly with business objectives.  Whilst a business may be well advised to have a clear image of their target market, it is not an exclusive image.  A Christian business might target Christians as its main customers but this should never exclude them from trading with others.  How else do you find new markets?

The market is essentially inclusive and so an ideologically driven business will be on a hiding to nothing. Ultimately, you have a market and you meet its needs. That’s what businesses are for.  You can specialise in a particular market without discriminating but businesses must be open to all if they wish to grow.  The same applies to third sector organisations.

Third Sector and Ideology

Sublimated power is the core issue where ideologies are at play. The world has to be made to be as your ideology suggests it should be. Participation in a third sector organisation allows people to find a space to exercise power without testing their ideas in the real world.  We’ve all seen the good idea tied to the whim of a single charismatic person, unable to allow their organisation to make its own way.  Exercising this kind of power is no good for the individual or their organisation.

The need to collaborate in business means ideological considerations become something of a luxury. This can of course lead to other issues. It does not mean businesses can do anything they like; a lack of any ethical scruples can be destructive. One way to do this is through regulation, where governments decide the bottom line. That way regulation is something people can vote for. It may be onerous for some businesses but at least they can make their case.

0 How Do Localised Economies Work?

It’s almost impossible to answer the question: how do localised economies work? Real-life businesses trading, prove what works.  We discover what works by doing it and what works in one place may fail in another.

However it is worth making a few observations.

Three Dimensions

Localised economies operate in three dimensions: grassroots, online and politically through regulation.

Grassroots

The act of trading has always been a grassroots activity. You make yourself known to your market and provide goods and services to that market. The big advantage of local trading is that it is easier to build trust. However, not all businesses can survive solely by trading locally.

Many small businesses provide specialist products and services to larger businesses and in this sense the economy is one system. There is always both a localised economy and a larger globalised economy. The problem is where the power lies. Clearly the big companies are going to dominate financial arrangements with smaller businesses.

Regulation

The traditional approach is through regulation. Everyone complains about regulation and most political parties are sceptical about it. I think we need to appreciate what regulation does for the economy. Here are two advantages to regulation:

1. Regulation protects the consumer. The retail co-operative movement started partly in response to food adulteration. Food needs to be properly labelled and contain what it claims to contain. Big companies fight to stop regulation that would oblige them to place health warnings on packaging for example. Restrictions on the retail of tobacco and alcohol are other examples. And how else are countries going to cut their carbon footprint?
2. Regulation protects small businesses from exploitation by big businesses. I suppose this is the concept of the level playing field. Legislation protects a small business entering into a contractual arrangement with a powerful business. This applies to consumers as much as it applies to business arrangements. Also businesses can voluntarily enter into arrangements regulated through legislation. Co-operatives protect their assets when they are regulated through legislation. The demutualisation of building societies during the 1980s demonstrates the inadequacies of the current regulations. The marketplace has its share of sharks and small businesses and consumers need protection.

Collaboration Online

The other way local economies mitigate the aggressive behaviour of large businesses is through collaboration online. Mostly businesses go online to extend their market. This might be by local publicity, so encouraging more people to visit their shop. But it can be by selling online, whether it is products or services. Opening up to a national or global market might help some small businesses finance their local operations. But even where they don’t aim to trade locally, the finance they earn can be spent locally.

There are other ways local businesses can collaborate online:

The retail co-ops were successful because they targeted the disadvantaged new working classes. They were a highly effective self-help and inspired many experiments carried out by those who had little to lose.  Ideas were it seems, communicated from place to place with little mediation.

A Role for Community Development?

The problem for many small businesses is time. They need to devote their working hours to their business and collaboration becomes a luxury they can’t afford unless there are clear financial benefits. An alternative would be for some sort of mediation, that helps businesses to build their local economy. Perhaps this is a role for community development workers, although traditionally few have taken on this challenge.  I suppose this is working with the wealthy whilst community development tends to be targeted at disadvantaged communities. But how effective has this traditional approach been?

Now that the days of large-scale grants are behind us, how can we look again at what local economies can offer?

0 Publicity, Sales, Marketing and Customer Service

.,,At a workshop yesterday morning, someone came up with comparative definitions of the terms publicity, sales, marketing and customer service.  I’ve covered all of these in various places but I thought it might be helpful to quickly review them.

Publicity

This is where my fictional company, Amphibiana Plus, tells the world about its first-rate garden frog ponds.  Advertising is a common example of publicity but it is not the only approach available.

Amphibiana Plus might spend £2000 on a newspaper ad. (I heard at the workshop, someone spent £30K on a radio ad sequence and had no idea whether they found additional customers).

But it is possible to earn publicity by other means at no charge.  The big advantage of advertising is you control the copy. Articles in newspapers, magazines, etc can be effective even when the copy is by a reporter or editor.  (Except for live radio or TV programmes.)  Seek stories about you or your business that publicise the business but are not about the business.

So, Amphibiana Plus might research the increase in  herons or other fauna as a result in the increased number of frogs where its installed ponds.

Sales

This is where Amphibiana Plus can say, “Buy one of our frog ponds”.  Obviously an advert could say this but not all adverts do this as they are often about promoting a brand.

The sales pitch  is often targeted at people who have already expressed an interest, eg they are on your email list or on the list of a joint venture partner whose list might be interested in frogs.  It can include special offers, guarantees, bonuses and all the other techniques that have been found promote a sale.

Marketing

Whilst I usually use “marketing” to mean everything to do with promoting businesses and making sales, in this narrower sense it is where a customer who wishes to make a purchase approaches Amphibiana Plus.

They will have heard the business installs the best frog ponds, perhaps from a satisfied customer, and they want a slice of the action.  Well designed marketing builds a followers’ community, who are keen about what the business has to offer.  Sometimes they will feel left out if they do not make a purchase.

So, does publicity lead to marketing or marketing to publicity?  Well, the best marketing is based on the needs of potential customers.  So, marketing might inform publicity (as potential customers make their needs known) and publicity inform marketing (as customers become aware of the brand).

Customer Service

Customer service is the route by which the business becomes aware of customer needs.  Once Amphibiana Plus has installed a frog pond, they might ask for a testimonial or discuss the pond with the customer.  The aim is not necessarily to make an upsell.  Finding out something of the customer’s experience over time can lead to new products and services.

It can also lead to testimonials and stories the business can display on its website and in its literature.  Whilst it might be possible to get some insights before they sell something, ie market research, it is always helpful to get feedback about how the product or service fares in real life.  It is interesting how few businesses do this; they appear, install something and then disappear as if they are not interested in their product or service once it’s delivered.

Good feedback can make all the difference.

4 Why Do Needs Assessments?

This short sequence will be an opportunity to share some ideas about needs assessments. Why are they necessary?  In the next two posts, I look at their content and how to deliver them.

So, what is a needs assessment? [January 2017: This is an old post and looks back to a period when I offered a needs assessment as part of a web design package.  I have since changed my approach considerably.] I am currently reviewing my assessment offer and will introduce some changes soon. The first thing I’ve noticed, returning to pages I wrote over a year ago, is I do not really define an assessment.

What is an Assessment?

Feedback I’ve received suggests the term “needs assessment” may help potential clients understand what is on offer. Normally a needs assessment compares the current situation with the ideal, identifies the difference and then identifies action steps. Action steps can be prioritised, costed and scheduled.

One complex issue is, are you assessing the needs of the organisation or its web presence? The word “needs” helps clarify the assessment is not primarily of the organisation so much as to assess what the organisation needs from its online presence.  It’s a rare organisation that does not need to improve.  The question is, how can the organisation be improved by its web presence?  You would think most organisations would pay for an assessment because they could see there is potential for improvement through their online presence.

How to do an Assessment

To do this properly the clients and the web consultant need a conversation about the organisation. It may emerge the organisation has many needs and not all of them can be met online. The assessment might help decide which needs can be met online. Clients are not always aware of what can and cannot be done online. Financial and time costs can help make the final decisions about the organisation’s web presence.

A small part of the work will be to review the organisation’s current web presence but the main emphasis will be on what the organisation offers its clients or customers and whether any or all of it can be promoted online.

For many organisations the amount they could do online might be greater than they expect. What they actually do will depend on their priorities, capacity and resources. It may be possible to show them how they could do more than they might think.

But the focus needs to be on the organisation and not the technicalities of working online. This might surprise some clients and part of the skill is getting them to open up about their hopes and dreams for their organisation.

Non-Directive Consultancy

I’ve written elsewhere about non-directive consultancy and this can be helpful although there will be an expectation the web consultant will contribute expert consultancy skills as the work progresses. Getting the balance right between non-directive work and presenting the best online solution can be challenging.

But the non-directive element is important. Some clients may start their assessment with a clear idea about what they want. This may be to the degree that they don’t see the need for an assessment at all. Assessments are usually fairly expensive for this reason. Someone who has already made up their mind and wants someone to carry out their plan does not need an assessment. However, those who do opt for an assessment may still have a clear idea of what they want.

As the assessment progresses the client’s needs will become clearer, at least to the consultant. The skill is on helping the client to line up what they want with what they need and helping them make genuine decisions to meet their needs.

If the client does this they might recognise the help they had from the consultant but the progress in their thinking will be theirs.

An Example

For example, the consultant might suggest a video to help promote the organisation. The client may not be aware of how easy it is to put a video together or the types of video available to them. However, the final decision must be the client’s. They may have reservations about its appropriateness, finance or time demands. The next step is not to insist on the video but to pose the question, we still have the problem to which the video was one possible solution, what other solutions might there be?

Of course it’s even better to list all possible solutions and look at each in detail and then decide. In reality ideas don’t always arrive at once and the process of examining the first in detail might trigger new ideas.

So, next time I’ll show you my current assessment.

0 Paid Staff in Third Sector Organisations

Given the problems Third Sector organisations have making decisions, you might think appointing staff to do the work would make things easier. Perhaps the more successful voluntary sector organisations have worked out how to do it. Small community and voluntary groups can find staff a liability.

Apart from the legal responsibilities, there are two major reasons why staff do not always help the organisation develop.

Whose Vision is it?

First, people with a vision set up the organisation. They employ someone they didn’t know before (or maybe someone they think they know) and give them responsibility for running the organisation. The Trustees with the vision meet occasionally whilst one or more paid people are active every day.

For organisations providing a well-defined service to a definite client group, this may not be too much of a problem. However, in a developmental role there is significant danger of mission creep.

Staff can become adept at manipulation. They tell the Trustees what the clients want and the clients what the (unaccountable) Trustees insist upon.  Accountability to the Trustees becomes a fiction it’s in everyone’s interests to maintain.

Usually the upshot is stagnation because it is in the interests of the staff to continue with their established routines. The ring leader is not necessarily the manager; administrators are often able to control the organisation. Trustees become bogged down in endless reviews whilst staff ring-fence established practices. If the manager is highly skilled in a specialist area, they can be very happy to leave the running of the organisation to their administrator.

Trustees who are very part-time cannot look in-depth and are fearful of causing trouble by insisting upon change.

Third Sector Funding

The second reason is in the nature of third sector funding. Much of it is grant aided and so it is often scarce. This means the staff know their days are numbered.

Staff know they can’t raise the funds needed to keep going and so they give in. What’s the point in planning a future for an organisation that will soon run out of money?

Without a business mindset, they resist the changes which might bring in income because they involve risk. The problem though is not so much the risk as a perception that they are not in business. “I am here to use my specialist skills and not to run a business” is the underlying argument in many organisations.

Many good ideas fail because no-one is able to make the decisions needed for the organisation to thrive. I’m not saying it is always impossible. I know of several organisations that could have survived but they were unable to make the decisions they needed to make to survive.

Internet marketing may be a real possibility for some organisations. They have something many would value but don’t know how to sell it and they are unwilling to make the changes they need to sell it. It seems hard to see how by focusing on something lower on the list of priorities, you can generate the income you need to fund the higher, less profitable, priorities.

Whilst businesses can make similar mistakes, they are clearer about the need to generate income and usually have a simpler decision-making structure. But third sector organisations are not businesses and this is another way in which they struggle in the marketplace. I’ll go into this next Wednesday.

0 On the Funding of Community Services

I’m reviewing Third Sector worldviews and have already covered anti-capitalism and the inclusion agenda.

Today I want to consider funding. How do you fund services for clients who cannot afford to pay for them?

State Provision

The most efficient funding is through the state. Basic social services should be provided directly by the state. Privatisation is absurd. How can organisations paying a dividend to shareholders possibly be more efficient? They do it by cutting wages and this disables local economies; as wages decline, spending power declines and localities suffer.

National and local governments plan and deploy resources according to need. This is a big advantage. There is no evidence this is less efficient than private sector organisations. The big advantage over privatised services is that government services are accountable to voters. By passing responsibility for services to private interests, they hand sovereignty over and allow voters say in delivery.

Third Sector Provision

However, no matter how effective state-run services are there will always be gaps in provision. This is where the third sector finds its role. They can champion the needs of disadvantaged groups not recognised by the state. There will always be neglected groups or new services to try.

How do we fund these services? The most common approach is through grants and until the recession and austerity, grants were big business. They still are although perhaps on a smaller scale.

Whilst there is evidence revenue funding for specific welfare projects can be effective, I do not believe grants are in any way effective at regeneration. I have seen many millions of pounds contributed to regeneration projects over the years, Burngreave New Deal is one example. Once the funding runs out the neighbourhood shows little or no improvement. Why is this?

Disadvantages of Grants

Business Perspectives

This game playing turns off entrepreneurs. They don’t perceive the third sector as a group of altruistic people but rather as a series of individual fiefdoms. Third sector leaders are too often involved in their work for the power and so do not need to prove they are actually able to get the job done.

Businesses are not immune to similar power games. The difference is that entrepreneurs refuse to play. They will simply walk away because they know how destructive they can be. There are always people out there who value collaboration. The priority is to find them and work with them. Sadly, they are rarely found in the third sector.

Social Enterprise

The question then is how do we support projects for clients who cannot afford the service? Social enterprise is one response to that question and positions itself as much in the private sector as the third sector. This raises some new issues.

Grants are a constant temptation and many social enterprises are able to get grants because they are social enterprises. In other words they are old-school community projects re-branded. The social enterprises that do manage to generate significant income through trade are often regarded with suspicion. What happens when the founder, who could have set up their own business, asks for a share of the profits? They encounter private sector entrepreneurs who have access to their own business funds but as a social enterprise find they are constrained by their founding ideals.

No approach is perfect and I’m not at this stage proposing solutions. The main thing is to be aware of the pitfalls and to seek innovative approaches that might just navigate new paths in this difficult area.