Tuesday, February 16, 2010

So What Are Your Overheads?

Today in Third Sector magazine, the Tory Shadow Charities Minister Nick Hurd lays into Futurebuilders for...shock...a 16% management overhead.

Now, I am not sure where he has worked before - I think it was for a bank - but I am not sure Nick has a lot of idea of what it takes for charities to be effective. This sort of political dog-whistling is just what we don't need. My overheads are around 16% and I'm happy to say so. Ask most CEOs and they will tell you the same. OK, I am pushing mine down to 14% to stay competitive but 16% isn't unusual.

This focus on our overheads is very fucking tiring, to be honest. As Martin Brookes from New Philanthripy Capital recently said, we need to be much less fixated with costs and a lot more interested in outcomes. If this is as clever as the Tories re going to get about our sector I would actually rather deal with another five years of the newly humanised Gordon Brown.

I like Nick Hurd as a bloke. He is fresh, human and bright. These sort of attacks don't do him or the Tories any favours. If he wants to call time on initiatives like Futurebuilders, I would respect him a lot more if he just came out and said it rather than engage in this kind of showboating.


Helen said...

Nice one Craig, Could not agree more. It's been such a battle to get statutory sector to actually recognise the essential need for reasonable, proportionate core costs, he's done us no favours by pretending 16% is in any way unreasonable. It isn't. It's average...let's be so bold as to say ordinary.
'World Class' or European standard commissioning demands an outcomes based approach which, although challenging, is a far better accountability route and one I welcome - should help to move away from this ridiculous emphasis on scrutinising allocated funds and move to a keener eye on the value for money.
Another provocative post - I wish you all the best in the move away from SU and on to pastures new - Bon Chance :-)

Rob 'Arris said...

I couldnt agree more; i actually believe 16% is low. The statutory sector is bracing itself for financial recovery and the 3rd sector is one big sitting duck. Unfortunately the third sector has undersold itself for many years and cut a cloth that is shabby to say the least. If we were in a more commercial sector we wouldnt be in this position, private companies would not have allowed contract prices that remain for 3 & 4 years to have got so low and risky. The naivety and lack of business nouse has come at a predictable time for the 3rd sector, this development occurs in all growing sectors, and lessons are learnt; unfortunately the economic crisis has come, unluckily, at the worst possible time.
Strap yourself in, Alton Towers has got nothing on the ride we are going to take!!