I think you've got some great points there Martin. I was just checking to see whether there was coherent thinking underpinning your views - and clearly there is. I don't agree with you 100%, but I think you're spot on with regards to the government overstepping their mark with political interference.

Don't shoot the messenger

I'm in favour of both national and local.

I'm not a big fan of local taking a large portion of available funding for one area. Billions for Olympics.

You'll tend to find the local groups will operate on a local scale. National groups often benefit local areas too - Cancer Research UK is one of the larger ones, few will say their work doesn't impact locally.

But Olympics? Hard to see how that will benefit more than a small minority, certainly can't see it being cost-effective overall with its use of Lottery funds.
Come to think of it, wasn't the idea of an independant company running the lottery being that government wouldn't interfere with what is done with the money?

By 2012, how much lottery money will end up being spent on the Olympics rather than other sporting, heritage or charity funding?

Martin

So the Olympics may not benefit disabled groups in Bradford for example. But similarly supporting one of those West Yorkshire based disabled groups will do nothing for children with a life limiting illness in Somerset.....I'm unsure from your post whether you are, in principle, for or against specific local projects with 'localised' impacts.  

Don't shoot the messenger

Just to clarify, few people I've met had any problems with the origional Olympic bid including some lottery money.

The increase in costs, with its associated diversion of a lot more lottery money, is what I class as 'nicked'.

The government have stated that the Olympics will benefit Britain. From where I'm sitting it doesn't look like it will benefit much of the Midlands at all. And will give no advantage at all to local homeless projects I'm familiar with in the Midlands.

Whereas the lottery having less money to spend on local projects of sport, heritage and other charitable projects does mean more competition for limited funds.

Other people may wish to use a different word than 'nicked'.
But do other people see more and more money being transferred to a specific project in one area as being somehow good for charities?

Martin

At risk of being labelled a charity sector Judas, I'd take issue with Martin's description of money being 'nicked' from the lottery to pay for the Olympics. It should be remembered that the original funding remit of the lottery included 'charities' in the broadest sense, but also mentioned heritage and sports (amongst others) as specific areas to receive support. All that's happening is that the priorities have been tweaked slightly compared to recent years, any charities that were mentally banking their next lottery grant before even sending in their application were always asking for trouble.  

Don't shoot the messenger

The trouble with charities is that each has a pet area they concentrate on. Could be a wide area, such as saving the planet. Could be a very narrow area.

What you tend to get then is that charity able to concentrate its limited resources - and yes they will tend to be limited partly by the competition for resources - on their pet problem.
Can be very successful. Charities are capable of making a far bigger difference than any other organisation.
What you don't normally get is a lot of joining up of charities.
Sure, you could have one charity per town to deal with everything. Still be limited resources, though perhaps not quite so limited.
And there'd be problems in allocating resources as each area of operation within the charity fought for the resources to do its job properly.

Then there's the human element. People choose where to go, who they will let help them (still an element of racism on all sides around) and what sort of activities they wish to support.

Large charities can be more efficient with such things as HR, fundraising, campaigning and so on. Small charities can be more embedded in their community (note I said can, rather than are) and respond better to local issues and conditions regarding their pet cause.

Even though the fighting for resources looks like it will be tougher over the next few years (what with economic problems, money nicked from Lottery to pay for Olympics and increase in charity numbers), I'd say there probably are too few charities.

They should co-operate better. Some have started to get the idea of collaborating on projects, listening to each other and even joining together for bids. But each should also be doing its primary work.
Primary work for any charity can be summed up in one word, attributed to William booth, founder of the Salvation Army.
"Others."

I've yet to see a charity to save the weeble but when I do they'll get my support. :)
Weebles wobble but they don't fall down.

Martin

Useful competition between organisations critically depends on having enough potential donors who're willing to invest really substantial amounts of time and thought before they give. Organisation A may be well run and providing a useful service, but get lots of complaints that it isn't doing enough simply because it doesn't have enough funds to do everything. Organisation B may just think it could do better, or have ideological reasons for wanting (for example) to change the proportion of funds spent on campaigning. Suppose B attracts money away from A, and A's services have to be cut. B's supporters then tell everyone that A "is a dreadful organisation - look at the cuts they've made." If the number of complaints about A is used as a measure of its usefulness, then A is demonstrably less well run than it was even though A is doing nothing different except making necessary changes to cope on a smaller budget. It's B's fault that A's services are less good than they were, but until they achieve some degree of what might be called parity of expectation (so people complain as much when B can't provide a service as when A can't), it would be very hard to document.

So if one organisation with, let's say, great overseas project work but truly shocking central management were to fail - there'd be plenty of other's willing to take up the slack. This would be of positive benefit all round. A failing charity does not have to be bad news for the beneficiaries just so long as there's a better run organisation queuing up to take the work over. So in some cases, undoubtedly, competition can be good........ The problem arises when negligently managed charities are allowed to continue squandering public funds.

Don't shoot the messenger

And frankly that's reasonable, taken for what it is it's an interesting read raising an important issue. It would be an interesting subject for someone to undertake research on - it won't be me though ;-)

Don't shoot the messenger

... perhaps not at the top - but certainly at the bottom.

Apologies for what will be a mega-post, so much so that I'm writing offline and will copy/paste.

Adam's logic is faultless, but there are so many things wrong with this on so many levels.

Quite simply, because charity is not business. Businesses measure success easily - in terms of cash. Quantitative. Charities measure success on outcomes. Qualitative. Value judgements come into play.

[quote]The case for more charities is particularly pressing for UK-based causes. If you want to help homeless people throughout Britain, support people with disabilities, or show concern for your local environment, there's usually little choice.[quote]

At a national level, yes. At a local level, disagree absolutely. The number of charities that work locally is growing exponentially - and many of them are chasing the same beneficiaries with similar work. Children's activities are a case in point: small football clubs/arts projects all chasing the same limited pots of cash, all absolutely adament that they do it best and too many of them, frankly, completely pig-headed about engaging with/negotiating with other organisations in the same community, with similar values who are not only working with the same target group, but in many cases, *exactly the same people*. Does this really maximise efficiency? I don't think so. I'm not even sure that it maximises benefit to the charity's 'clients'. Different delivery methods are not sufficient to justify duplicating governance (smaller charities particularly struggle to get good trustees as it is), administration, all the legal stuff (audit, child protection, health & safety, etc). End aim of both organisations is to get kids off the streets, doing something positive/learn new skills - social/practical/acadamic - so why not have just one charity which delivers the activities as different projects in its portfolio? Benefits of economies of scale and possibly bigger 'clout'/potential for growth.

[quote]The more decent charities there are, the more effective they will be. As in business, competition between charities prevents complacency and encourages innovation. If charities are constantly having to prove themselves in the battle for cash, the most effective performers will (usually) flourish.
 
"The big winners are the people charities are trying to help"
Charities doing similar work will also be able to learn from each other. If two organizations take two different approaches to the same problem, it swiftly becomes obvious which is the most effective - and this can be adopted by both organizations in the long run. The big winners from this are the people charities are trying to help.[quote]

Again, the logic is faultless. But it falls over if you take the following into consideration:

1) People. What about the people who are let down when the more inefficient charity fails? Just because it's not doing the *most* good doesn't mean it isn't doing *any* good. Result: cynicism amongst beneficiaries - who feel that they have once again been let down by "the system" (there is still a wide-spread vague assumption that charities are bottomless pits funded by some faceless Government agency and that they are seeking individual's donations because they are greedy for unnecessary things like, oh, staff and administration and office space).

2) Competition means that there has to be more spend on PR/fundraising to attract money. Many smaller charities are outstanding - but simply do not have the PR clout of the larger ones [1]. How *can* they compete?  In an ideal world, total transparency would prove that a charity was actually better at making the world a better place - not just better at marketing/having a high PR profile. Unfortunately, this is not, and will never be the case. Result: cynicism amongst donors who know that their little local 'Friends of [whatever]' group is doing a fantastic job on a shoestring on an entirely voluntary basis and is completely unknown - so how can the big boys justify their staff salaries and their PR/fundraising spend?

3) Charities do not co-operate enough. They just compete. I see too many people wanting to set up their own charity because they want ownership. Without knowing what else is in the patch they are after. Assuming that they will get money because they are Doing Good without realising that in some respects, starting a new charity is like starting a new business - you need to know the environment, it'll be bloody hard work and it won't happen overnight - you start small and grow. What they are doing, who with and their values are often NOT different enough to justify having entirely separate organisations.

Adam appears to have fallen into this perception trap of not differentiating between objects of charities. It goes back to my first point: no matter how big or small the business, no matter what it sells, success can be measured in money terms. End of. This is purely not the case with charities. It is absolutely appropriate for - for example - a community group to constitute itself as a new charity to "Keep the Teeny Tiny Woodland on our estate looking beautiful". An extremely specific and local cause. It's never going to go national. It is likely to collaborate with a similar group on the next estate over because they have similar causes, but there is no need to compete - the objects are different. It is NOT appropriate for someone to set up - for example - a new homelessness charity when there are so many out there that it would be far more efficient to find the one that's 'closest' to you and partner with them - changing what you don't like/helping them to improve from within.

The truth is that the mega-charities have the national/top-end of the market so sewn up [see 1 again] that there is little point in a smaller, let alone a brand new charity competing with them *unless* it really has identified something new (unlikely with nearly 200,000 already out there - and that's just the registered ones) or got an angel investor who can afford the millions that would be needed for it to make its mark in a big way instantly. I concede that there are a few newcomers that have been in this fortunate position and welcome the innovation that they bring (together with keeping the longer-standing ones on their toes) - but this type of newcomer is *very* much the exception to start-ups, not the rule.

[1] See http://www.charitycommission.gov.uk/registeredcharities/factfigures.asp#intro for full breakdown.
Summary: at end 2007, 190,541 charities registered (including subsidiaries). Main charities: 169,297.
Over £1 million income: 5,408 (3.2% of main charities). Receiving 82.0% of total (£44.55bn) income of main charities.
Just 679 charities receive 50.3% of total income.

 ----------------------------------------------- ... nearly Vlad the Impaler

Hmm, you're right, Ginsters, you're right. But I hope my post shows that reflexively arguing 'charities shouldn't do the same work as each other' isn't necessarily sensible.

Adam, Intelligent Giving

In part I agree with the sentiment, but this article appears to be big on opinion yet short on evidence.

Don't shoot the messenger