Amidst hard times and rising social needs, better government policy and regulation of the social sector becomes ever more urgent.
With the right policies, governments can support charities and funders to be efficient and effective with their resources. With the wrong policies, governments either fail to do this or even actively disincentivise it. For example, government commissioning practices may mean, some charities are taking on more financial risk than they should. Our State of the Sector research revealed that more than half of charities with a government contract are subsiding that contract with income from other sources, including voluntary donations. This may jeopardise not only the future of these charities, but also the delivery of government’s social programmes.
A lack of policies to drive charities and funders to better understand, measure where appropriate and report on what difference they are making on their causes may also be affecting the effectiveness of social sector. Without this information funders, charities and government alike will find it hard to understand what is working, where resources could be best used, and where to invest limited funding.
We need a rethink of our public sector commissioning processes to incentivise more efficient use of public funds to meet social needs. It starts with better recognising social value when drawing up contracts, but it’s also about designing contracts to play to the strengths of the organisations likely to be delivering them and that are conscious of the incentives relevant to the outcomes.
Reporting what works
Government policy also needs to drive a bigger focus by charities and funders on activity that achieves the biggest impact. Supporting more Data Labs to learn what types of activity are most effective would support this goal, as would requiring charities to publicly report the difference they have made. The Charity Commission could play an important role in guiding the sector on this.
Stay informed through the sign-up form: http://eepurl.com/hrrIXP
We’d love to know what you think in response to these questions, comment below with your thoughts, ideas and what else we should be asking…