Blog: Making A Lasting Difference - A Fund Managers Perspective
Making a lasting difference: Sustaining non-profit organisations and their impact.
I was delighted, but a bit puzzled to receive an invitation from Graeme Reekie recently to give a short talk and the Glasgow launch of his book “Making a lasting difference”. Having known Graeme for a number of years, I took the invitation as a compliment but I wasn’t sure why he thought I’d be the right person to speak at the launch of such an important book for the third sector (or non-profit sector as Graeme defines it in his book).
However, after reflecting on the support Graeme has given organisations that Impact Funding Partners works with, and many conversations with Graeme about the harsh environment in which the third sector operates, I remembered what we have in common: values –driven decision making. So I accepted that it would be reasonable to speak at the launch of “Making a Lasting Difference”.
Now that I have had time to think more about the substance, I’d like to share my thoughts on certain elements of Graeme’s book. Having worked for over 25 years in the third sector, 15 years of which have involved developing and managing grant funds, my views will of course reflect those perspectives.
I remember having an animated discussion with a sector leader a couple of years ago about organisational sustainability and the right to exist. My view was that some organisations in the third sector have lost their way. They believe that their existence is more important than their mission. When I first began working in the third sector, we talked about working hard to achieve change so that our organisation or service was no longer required. Although sustainability is more challenging than ever, I still believe the most important concern of the third sector is to make a difference, not to maintain the infrastructure. According to the sector leader I was talking to, this was a myth and not based in reality. Well, as my grandfather would say “Let’s agree to disagree”. I make no apology for maintaining my view that achieving our mission is paramount.
In Making a Lasting Difference, Graeme introduces a number of paradoxes and myths around third sector sustainability. He then suggests some actions that can be taken at board, management and operational level to address issues emerging from each paradox.
The book covers the issue of organisational survival at any cost in the Change Paradox. “Non-profits exist to serve a purpose other than their own existence”.
Graeme suggests some very useful system-level responses for policy makers and funders.
- Embed learning in funding systems
- Encourage honesty
- Encourage experimentation and risk-taking
- Create impact and learning reports
- Resist over-specification
At Impact Funding Partners we pro-actively seek to adopt these approaches, but for me the first and last points are the most critical:
- Learning should be afforded the same status as outcomes, and
- We must trust delivery partners. Or as Graeme puts it “The funding relationships is not simply transactional, but one of mutual exchange between equal partners, each with something to offer”.
In the Octopus Paradox, Graeme explores the need for organisations to reach out and grow, but warns against growing in too many directions which can result in becoming stretched out off shape.
From a fund manager perspective, there are some interesting but potentially tricky system-level responses suggested in the book. However, I agree that policy makers and funders must seriously explore them:
- Stop the funding merry-go-round
- Explore what sustainable funding means in a particular context
- Develop funding and market shaping strategies.
Graeme argues that market shaping (or facilitation) can contribute to the sustainability of a particular market or field of work. In order to achieve this policy makers, funders and commissioners need to work more closely with communities and the third sector. I would agree with that but although there are pockets of good practice, this approach is not consistently applied across Scotland. In fact, I would go further and include the private sector in the mix. We need to collaborate genuinely and effectively across all sectors to fully understand current unmet or emerging needs of citizens and communities.
That said, we can’t afford to focus exclusively on deficits. We must increase investment in the obvious and latent strengths in communities in order to cultivate social capital. That is why we work our public sector partners to find new ways of building capacity in communities. Hence Impact Funding Partners’ Mission is:
“To make the most of the strengths and assets within communities by distributing funding, increasing capacity and building trusting relationships.”
The Yes/No Paradox will be familiar to many third sector organisations. At some time or other we have all fallen into the trap of trying to be all things to all people, and not having the courage to say no. Graeme suggests that pre-application support by funders may help organisations to decide consider specific funds. This is certainly our experience, producing better and more focussed applications, but also helping organisations to elect not to apply when the fund does not fit with their aims or priorities.
The idea of engaging with potential contractors before the tendering stage was also raised at an event hosted by the Kindness in Procurement and Commissioning Group earlier this year. It certainly makes sense to give potential applicants or contractors the opportunity to really understand what is required, so they can make a realistic assessment of the benefits and disadvantages of bidding.
In the Efficiency Paradox Graeme proposes that efficiency can preserve resources but may impair development. This is true. The third sector is adept at making efficiencies, but funders and contracting agencies must recognise that in order to function effectively, organisations need to have appropriate structures in place.
In the book, Graeme makes a powerful statement which might be uncomfortable for many funders and commissioners. “In this context, overheads, management and administration have become dirty words in the non-profit world, like they are an extravagance rather than unavoidable costs of being in business”. This is often the case, and so we need to look at grant funding and procurement in a more holistic way.
This concept of expecting more third sector efficiency is a real challenge for public sector funders because fund levels have remained static for years and demand for grants is constantly increasing. But policy makers and funders must acknowledge that wanting more for less is not sustainable.
I’ve only touched on a few concepts in Graeme Reekie’s Making a Lasting Difference here, and there are many more ideas and recommendations for third sector organisations, policy makers and funders to contemplate. It rightly challenges our understanding of sustainability and emphasises our collective responsibility and the need for collaboration and partnership. Well-worth reading.
As member of the Scotland Funders’ Forum, I know that funders are aware of the financial and capacity challenges that the third sector faces, and are looking at the role of funders both as investors and partners.
Let’s create a shared understanding of what sustainability means to communities, the third sector, policy makers and funders. Then we all need to work together to bring about the change needed. And this must always encompass values-driven decision making.
Impact Funding Partners