Saturday, October 8, 2011

Why the Transition Fund for the third sector may not be such a good thing

Has the Transition Fund been a good thing? Obviously, if your bacon has been saved or your demise delayed, you'll say yes. But the answer is more complex: I think the fund has shown the sector at its best - and its worst.

On the positive side, the sector showed great mettle in squeezing a decent amount of cash from a necessarily stingy government. It also showed that, while the sector's star might not shine so brightly in these austere times, it hasn't waned as much as we feared. Anecdotally, I have also heard of great examples of charities using the Transition Fund not to rearrange deckchairs, but to invest in building a new ship.

However, two things have bugged me about the fund. The first is that it has given succour to those who believe they deserve by right to be bailed out. This culture of entitlement is the most unattractive trait I see in the sector. By creating a bailout fund, the government has unwittingly strengthened the hand of those who, instead of reacting to the crisis in funding, have sat on their hands, blocked change and told their chief executives to find more money. And then it has appeared.

The second thing is that for every organisation that uses the Transition Fund to reinvent itself, there appear to be 10 that use it to delay their deaths by a few more months - or until the next bailout fund comes along.

I am sorry, but you can't run a charity - any more than you can run a car plant or should be allowed to run a bank - on this basis: it's wrong. If your existence is in danger, the only legitimate use of the Transition Fund is as an investment in your long-term sustainability.

If it allows you to keep your head in the sand for a bit longer, it is failing to serve its function.
Some readers will think I'm missing the point here. Short-term cash is urgently needed to prevent thousands of our most vulnerable organisations from disappearing due to no fault of their own, and so on.

On one level, this is true: one hears many stories of councils, in particular, treating charities badly. Nobody would argue that there is never a case for financial relief or bridging funding for organisations that hit a difficult patch.

But what has been lost is any kind of mindfulness in the way that money is used: there was no requirement to invest; nothing to be repaid; little accountability (from what I've seen); and no really clear distinction between the most and least deserving. I know this was mostly down to the timescales - but I think this spending was done blindly and not in a considered way.

What will be the legacy of the Transition Fund? Ideally, one would like to think of it as a timely piece of investment that enabled our sector to retool for a new age - as indeed it is for the few who are investing their funding wisely. More realistically, I think it will be viewed merely as an extension to the opening hours in the last chance saloon.


David Floyd said...

"The second thing is that for every organisation that uses the Transition Fund to reinvent itself, there appear to be 10 that use it to delay their deaths by a few more months - or until the next bailout fund comes along."

There's at least one further category which is organisations that might have made or be making an attempt to reinvent themselves but are not able to - either due to the circumstances they're operating in and/or due to lack of appropriate skills.

I think the problem (or at least a problem) is that Transition Fund on a national level - and similarly directed transitional funding from councils at a local level - hasn't been accompanied by serious thinking about the sort of changes that would need to be enacted if it were to actually bring about meaningful change in the way the sector operates.

The gap between need and resources is expanding - it was anyway but the economic situation has increased the speed of expansion.

(In my view) there will always be some activities that need grant funding (or don't happen). There are others that are best delivered through contracts and others that can be best delivered by through personal budgets or a straight customer/provider relationship.

There's been a lot of theoretical bluster about this in the social sectors but not much practically useful thinking that organisations could use to guide their decisions.

Craig Dearden-Phillips said...

Yes I would agree with your last couple of points very much David.