UK: Sthepen Bubb “Third sector is no longer the hippy sector”.

“To be influential, the third sector has to grow up and stop thinking of ‘professionalism’ as a dirty word”. This is the suggestion Stephen Bubb, chief executive of Acevo, gave to the European non profit sector during a lecture delivered at the Cass business school in London.
Here is his speech.

No longer the hippy sector
Some argue that to aim for professionalism is to take the heart out of what it is to work in the third sector. There have been times when “amateur” was a badge of honour: the poorly produced leaflet, the ramshackle office and the absence of technology were a sign of how in touch one was with the clients.
We have moved on. As the sector has grown, the understanding of the need for professionalism in third sector organisations and in our dealings with clients has grown, but still has further to go. We are no longer the hippy sector.

The sector is expanding, yet its influence is consistently underplayed and undervalued. It is estimated by the London School of Economics that there are a half-a-million third-sector bodies, with a workforce of 1.5 million staff and a volunteer workforce of 6 million. Included in that are some 55,000 social enterprises. Many registered social landlords (RSLs) are registered charities, and the National Housing Federation puts the combined turnover of RSLs at just over £9bn and with a workforce of 125,000.

Yet policy makers in government and elsewhere consistently underplay the role of the sector in economic regeneration. It reinforces those who prefer to see the sector as well-meaning but marginal, community-based and volunteer-led. A growing third sector exerting power and influence – whether in campaigning and advocacy, delivering services, or promoting civil society – needs to ensure high standards of professionalism in its leadership and organisation, and the public will expect to see greater transparency and accountability.

A modern, enterprising third sector organisation must be professional, passionate and efficient. It must be well-led, committed to staff development, and actively committed to diversity and inclusion. It must be well-governed and reflect the needs of the clients and communities it exists to serve. It must be enterprising, challenge the status quo, and aim to generate a surplus for investment, growth and sustainable development.Some fear that professionalism will detract from the sector’s “independence”. But, properly managed, sector engagement with a democratically elected state is not only compatible with organisation mission, but enhances it. Jeremy Swain, chief executive of Thames Reach, argues: “The idea of pure, absolute and sacrosanct independence, with no pressure whatsoever from funders and other stakeholders, is a bizarre holy grail of little interest to those working on the ground.”

Once again, we are driven back to the need for a professional approach. An organisation that has developed its capacity, has achieved effective funding relationships and has strong leadership is better equipped to stand up to improper pressure. An organisation that is confident in its governance and is transparent and accountable is better able to demonstrate independence.here are a number of pressures forcing greater professionalism. The sector is now taken seriously by government and by all political parties in the development of policy and implementation, whether it is a case of delivering services, acting as a voice and advocate, or as a builder of communities and social cohesion.

Client focused
In delivering services, the contracting party and the client both will expect the same level of professionalism, whether delivery is through a public, commercial or third-sector contractor. If our particular pitch is that we are more client-focused, more grounded in communities, then we had better be able to prove that.

The growth of consumerism has similarly strengthened the arguments for professional third-sector organisations. People are demanding higher standards from organisations, whether they are in the third, private or public sectors. Simply because a service is delivered by volunteers does not mean the public will expect lower standards. And yet pressures against professionalisation remain strong. Witness the intermittent stories complaining about chief executives’ salaries. Many organisations are afraid to spend too much of their resources on “administration” and are complicit in accepting the arguments that every penny in the pound must go to a good cause. We are also vulnerable to general romanticism about volunteering. To politicians, commercial companies and the general public, volunteering is seen as a free gift incurring no expense on the organisation. Yet volunteering is not immune from the pressures of professionalism.

There is a persistent movement that believes “small is beautiful”. Politicians and some sections of our own sector are too prone to the belief that the real sector inhabits only small or community organisations and that large, or national charities have lost their way. I have even heard this process described as the “Tesco-isation” of the sector. Are there limits to the professionalising of the sector? Do we expect chief executives’ salaries to grow in the way the public sector has grown, with some local authorities and quangos rewarding CEOs and permanent secretaries with total salaries at over £200,000? I believe we can make the case if we want to, but generally we are rather wimpish and embarrassed about doing so.

One of the strengths of our sector, we argue, is the ethos of integrity, empathy and passion. And our face to the public is based on that appeal, too. If we come to be seen as too commercial or bureaucratic, do we damage the brand? My view is that we are far from a major problem. However, there is a balance to be struck by underpinning passion with the professionalism that delivers for our clients and stakeholders.

But we need to strengthen the sector’s foundations. We must build the capacity of third-sector organisations, develop sustainable funding regimes and invest in training and development. We must enhance our ability to devote funds to monitoring and evaluation, or to research and development. Increasingly, stakeholders, donors or supporters require sophisticated mechanisms for communication, yet IT support is weak.

The sector has been slow to recognise the importance of leadership in driving change and governance arrangements are weak. In a forthcoming survey of chief executives by the Association of Chief Executives of Voluntary Organisations (Acevo), it is striking that only 40% of members could agree with the proposition that “my board is highly effective in developing and reviewing our strategy”. In an era where transparency and accountability have been given prominence, recruitment practices raise serious concerns. Over half of Acevo’s member boards rely on word of mouth for recruiting their chair. It is hardly surprising that this has led to a situation where the majority of the trustees of charities are drawn from white, mainly middle-aged men.

Levels of engagement
While it is accepted that the non-paid, non-executive model may be particularly suitable in smaller charities and community organisations, there is a case for paying trustees in some charities. Even without such payments we must expect better levels of engagement at board level. Funding and contracting reform, access to capital markets and a growing asset base, greater attention to the education of donors and funders and a bolder approach by organisations in educating the giving public to the nature of modern day charity can help increase the resources available to invest in a professional approach to organisational development and managing staff and volunteers.

There may be too many third-sector organisations. There is great strength in diversity. Different motivations and enthusiasms, passions and vision are behind the seemingly large number of charities in existence. This is positive. But it may be that the desire to compete more effectively or to grow the resource base will lead to more charities considering the potential of merger, or greater collaboration, say through joint campaigns or sharing back-office resources.

Increasingly, third-sector organisations should be looking towards partnerships with the private sector. So far there have been few examples of such arrangements but they have shown the potential for marrying commercial expertise with the passion of the third sector.

It is time we put aside divisive arguments about small versus large; time we recognised the value of leadership and the strength of larger organisations and national charities.We need a leadership pathway from the amateur to the professional. Trustees, staff and volunteers increasingly accept that a growing third sector requires a truly professional approach.