Let's learn from Tesco!

Just now there a lot of talk about the so-called “Tesco-isation” of the third sector.

This is seeing a handful of big-brand charities pulling away leaving the rest in a spiral of falling income.

The facts bear this out. According to the UK Voluntary Sector Almanac published in June by NCVO, the top 300 or so charities account for about 43% of income and rising.

Meanwhile those with a turnover of less than £1m (about 97% of all charities) reported a fall in income. The voluntary and community sector is, in effect, in recession.

So what of Tesco-isation? Well, on one level, yes, it’s all very worrying.

From a personal view, it was galling to see a local community organisation recently lose a big contract to Sure Start.

I have also been deeply exasperated by the failure of the larger charities in my own sector to partner with innovative smaller enterprises like my own.

And who cannot be irritated by Government spin about “empowered communities” when we’re seeing the slow-starvation of grass-roots neighbourhood organisations?

But while clearly Something Has To Be Done, it is not enough to just throw rocks.

We need to look at ourselves too and ask some hard questions.

One is whether there are now simply too many charities? The last decade of Lottery-fuelled prosperity has seen an explosion in the number of charities, from about 100,000 in the mid 1990s to 168,000 today.

The 2007 Almanac shows that most organisations are now creaking as Lottery money dries up and public finances tighten.

This begs the question of whether it is now time for some kind of consolidation of the third sector. 120,000 robust organisations may achieve a lot more than 170,000 living hand-to-mouth.

This leads onto a second question: is small is actually beautiful? In this country, small organisations are garlanded as more innovative, closer to communities and better-run than the big brand names.

But how true is this? Where’s the evidence?

My organisation was small once, and, yes, we were innovative, but we couldn’t do much with our ideas because we were too small.

Yes, we were connected to clients but only because we worked with only 25 people.

And, frankly, NO we weren’t well run at all. In the early years, I had to do everything from strategic planning to opening the post. 80 hour weeks were quite normal.

Being so stretched meant that delivery was often sloppy, our finances were all over the place and our office looked like a squat. Getting bigger enabled us to professionalize. Only then did we truly innovate, connect and deliver.

Small, to me, means anything but beautiful.

A final big question is whether we are inviting this recession upon ourselves?

I think, to an extent, we are.

I have been involved in several organisations that help disadvantaged people into employment. All are now struggling and survival has become their main focus.

But will they merge with each other? Will they share overheads? Will they put ancient differences aside for the greater good? The answer to date has been no.

They would rather moan about each other or how they are being stiffed by the Council . In doing this they are making a choice – to be a victim.

Clear alternatives are available in the form of mergers and collaboration but energy is simply sluiced on negative behaviour.

I have seen similar things happen up and down the UK, it’s a problem everywhere. While it is tough for smaller organisations, we need to choose not to be victims.

This message seems to be hitting home. Last week I addressed a major UK conference for small and medium-sized charities. My take-away point was that success or failure is in organisations’ own hands.

I was impressed by the enthusiastic response of the audience. Five years ago I would have been chased out of the building!

It was clear to delegates that there are ways to prosper as a smaller organisation. These include new partnerships, new financial instruments and new opportunities to develop niche public services.

Delegates seemed to grasp that the horse has truly bolted and that they need to focus on their future, rather than on shutting the barn door.

Sure, Tesco-isation, and all that comes with it, is challenging. But it may also herald opportunity for those willing to choose a different mindset.