What are some of the future trends for strategic planning to 2015?
Why 2015? Well, May 2015 will be the date of the next General Election, if the coalition government’s proposals for a fixed term Parliament get approved.
Why a bath? Read on…
Nearly two-thirds of charities receive no public funding. Their focus will be on longer-term major trends and how they can best respond. For some charities that might be the impact of an ageing population, and the public’s changing expectations about the standards of care they require. For others it may be climate change and environmental sustainability. The exponential growth in mobile technology and open information sources will generate debate for others.
However, for any charity it will be hard to disregard the economic outlook. It looks like Vince Cable’s likening of the economic downturn to the shape of a bath – a steep downward slope to the bottom of the bath, followed by a long flat period with conditions eventually improving and then a steep upturn – is proving correct. The latest predictions are that we’ll be getting out of the bath by 2015, but that it will take a long time for households to notice it.
In the meantime the predicted increase in interest rates now looks to have slipped to late 2012, the impact of the increased utility bills is being felt, and, for those charities working overseas, the prospect of turbulent exchange rates (albeit tempered by the Government’s relatively stable overseas aid budget) all add to a complex financial calculation.
For charities reliant on local authority or health funding the impact of the public spending cuts are already feeding through. Finding and developing alternative forms of income and growing a social enterprise may be attractive, although the experience of charities in the past suggests that it can take years, even decades, to build up sustainable alternative business plans and income flows.
Others will focus on the opportunities offered by the Open Public Services White Paper, and the funding available from the Office of Civil Society to assist in bidding for public service contracts.
There will be consolidation in the charity sector, but it will not be dramatic. For some charities, it will be a time to take a fresh interest in potential collaborators, as well as in merger opportunities. Expect to see a lot of this activity amongst the infrastructure bodies.
Charities’ organisational structures will also change. There is likely to be a shedding of regional structures, given the emphasis on localism and the need to bear down on costs. The new found power and ideological differences of the devolved administrations, including their differing attitudes to the ‘marketisation’ of public services, will also impact upon charity structures.
Expect also to see a growing tension between a government transferring public services and promoting localism, whilst also wishing to retain central control arrangements in a number of areas.
There have been some signs of this already.
For example, the somewhat hastily drawn up proposals within the Public Bodies Bill started with the presumption that any charity funded by the government could be ‘directed’ to act in a certain way, and ‘required’ to carry out functions. The National Trust and other charities successfully lobbied the government for this to be removed.
A second example is the government’s rule about the treatment and control over the use of formerly exempt charitable museums and galleries’ reserves. These charitable funds are being counted as part of the government’s bank balance, and the charities will need advance permission from the Treasury to spend them. This applies to most of London’s best known museums, who are currently examining ways of accessing their historic reserves without breaching Treasury rules.
A third is the recent government decision that NHS charities with corporate trustees should be regarded as ‘controlled’ for accounting purposes and included in the NHS’s ‘balance sheet’, albeit with an implementation date deferred until 1 April 2013.
These charities will be at the centre of an on-going debate about appropriate models of governance and accountability that will safeguard their independence.
Last, expect to see charities using their independence to underpin their campaigning and lobbying activity and to demonstrate their benefit and value over the next few years.
(An edited version of Rosie’s article first appeared in September’s Charity Finance.)