With a lack of productivity data and support, charities are “out in the cold when it comes to the productivity agenda”, according to new research.
Productivity of purpose: Bringing charities into the UK’s productivity drive was conducted for the Law Family Commission on Civil Society by Pro Bono Economics.
While productivity is not a term usually associated with the sector, high productivity is vital to every charity, the report reads, and suggests improvements to charity financing, evidence, data and infrastructure support to achieve this.
“The ability to acquire resources and use them in order to realise a set of objectives is the basic operating model of every charitable organisation. In this context, productivity is simply how well a charity does this in order to achieve as much as it possibly can,” it says.
‘Charities financial system must be fixed’
The report found that 19% of small charities spent nothing on training their staff and volunteers in the previous financial year.
Most (52%) smaller charities had a training budget, but this compared to 86% of larger charities.
The data was collected from an online survey of 316 senior professionals at registered charities in May 2022. PBE then developed proposals with experts and charities, aiming to improve the key areas affecting productivity.
The report calls for the charity sector’s financial system to be fixed by grant-makers and other funders providing less restrictive and longer-term grants that would enable charities to invest in organisational improvements like staff training.
It recommends that the Charity Commission should encourage higher quality grant-making and the wider use of benchmarks across the sector.
PBE also renewed its call for the government to appoint a "philanthropy champion" to unlock more charitable giving.
The Financial Conduct Authority (FCA) could also help to boost giving by improving the training of financial advisors on philanthropy, the report says. This is a recommendation that the chair of the Charity Commission, Orlando Fraser, also voiced in his latest speech.
Government productivity schemes ‘should be open to charities’
The Commission also suggests that government productivity schemes be opened up to charities.
For example, Help to Grow: Digital and Help to Grow: Management are government-funded schemes aimed at supporting small and medium-sized enterprises. These initiatives could be expanded to include charities in an effort to improve sector funding and thus productivity, the report suggests.
The creation of a Civil Society Evidence Organisation that would develop, hold and share evidence on how charities can be most productive would also benefit the sector, the report concludes.
‘Charities’ ability to achieve important social benefits is currently being diminished’
Jack Larkham, research and policy analyst at PBE, said: “Charities are at the forefront of tackling the cost-of-living crisis, vital to delivering public services and fundamental to driving forward social change. But despite the crucial role they play in society and the economy, their ability to achieve these important social benefits is currently being diminished.
“Implementing changes to the way that they are funded, improving the generation and spread of good evidence and data, and rebuilding the sector’s support infrastructure are crucial to providing the resources, ideas and skills that will help the sector to maximise its full potential.”
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