The sector is selling itself short in allowing money to dominate everything we do, believes Kathy Evans. This is one of a series of articles about the future of the voluntary sector, published by Civil Exchange.

“For too long, we seem to have surrendered personal excellence and community values in the mere accumulation of material things.

“Our gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.

“It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile.”
Robert Kennedy, 1968

My challenge for the voluntary sector over the next decade is to find a new relationship with money.

I don’t mean that money doesn’t matter at all in what we do, but I believe as a sector we have allowed it to dominate, distort and distract us from our greatest economic role – the creation of value beyond money.

Long before I ever entered an economics classroom my father taught me something about money: “Remember that money has no value in itself. It’s just something we invented to let us do things,” he said.

Paying a price for something you don’t like much will feel expensive, he went on to explain, but the same amount spent on something you treasure will feel like a bargain. Their price is the same but their value is different. Value is a feeling, not a fact.

That week his insight helped me to choose between buying sweets or colouring pens, but it’s a perspective that has remained with me ever since.

In today’s society, where the price of one person’s designer handbag could pay six months’ rent for a whole family in the same country, surely we cannot doubt that the value of money is subjective, and relative to how much of it you have – a matter of personal judgement at the individual level, and political judgement at the collective level.

Handouts to private contractors

When government ministers are willing to give millions in guaranteed profit to giant private contracting companies, and yet routinely cast voluntary sector grants as ‘handouts’, we should be in no doubt that their spending decisions are value judgements about the recipients.

Charities today are routinely compared with commercial business or public services. We should apparently be more like one, or both of them, and less like ourselves.

Sometimes these comparisons are favourable, sometimes not. More often they are just wholly inappropriate.

More than half of England’s 60,000 children’s voluntary groups have no paid members of staff. Nine-in-ten support families in just one neighbourhood; and few aim to expand in turnover or beyond their locality.

Making life worthwhile

They offer their communities many of the things in life which Bobby Kennedy referred to in the quotation above as making life “worthwhile” – of which money, GDP, and claims of economic recovery take no account.

Fun, poetry, pride, sanctuary, solace, voice, confidence, integrity, and freedom from loneliness are the things which matter.

Most people actively involved in the voluntary sector feel it offers them personally, as well as their community, society and economy, a value beyond money which is usually expressed in terms of their feelings.

Yet to quantify what we’ve come to call our ‘added value’ we talk in pounds and pence – the money we raise; the hypothetical paid equivalent of volunteers’ time; the money we might be saving others by helping people in need. How did our sector come to be so defined, and yet so poorly described, by money instead of feelings?

For over 30 years, the competitive public marketplace has set one charity against another, pitted them against private and public competitors, and claimed to offer a level playing field to all, based on ability to deliver more (value) for less (money).

The industry of assessing ‘value for money’ offers the tantalising fallacy that value is an objective measure – a neutral science that can be applied in spending the nation’s money, without recourse to such undesirable or untrustworthy things as political ideology or personal judgements.

Wrecking our ecosystem

Yet this idea is, itself, an import from business. Measuring the voluntary sector using the values framework of another has wrought havoc on our ecosystem, even for those charities uninterested or unable to bid for public contracts.

Looking forward, however, the contracting marketplace is rapidly looking like yesterday’s inadequate answer to tomorrow’s public spending problems.

We have already started to see the advent of invitations to tender for public service contracts so underpriced for what’s being asked, so onerous in terms of transferred risk and liabilities, or so complex in terms of payment mechanisms, that nobody – neither voluntary nor private sector – is actually tendering for them.

Dangling offers of money, and asking bidders to jump through costly hoops to get it, simply won’t continue to work if bidders feel there is more risk than value involved in taking the money on offer.

No level playing field

Voluntary agencies which are asked to subsidise contracts they bid for with their charitable assets, volunteer capacity and donor funds are now seeing some of their best-known, private sector competitors walk away mid-contract from public service delivery that is proving unprofitable – making clear (if there was any doubt) that they expect to take private profit from other public contracts they win.

So the voluntary sector is being contracted to give; the private sector contracted to take. The level playing field is a sloping pitch.

Charities which remain committed to offer their resources to support the state in the delivery of public services would be wise to argue for radically different terms. They should come to the table as partners and investors in services, alongside the public sector, rather than paying to be treated as interchangeable contractors.

At Children England we launched the Declaration of Interdependence earlier this year in the Financial Times, produced in partnership with the TUC and a wide range of voluntary sector bodies, in the belief that both public and voluntary sectors must urgently move beyond price-driven contracting; stop fighting short-term battles for our separate organisational interests; and pool our resources to build sustainable community services.

We are not alone in seeing the writing on the wall for ‘business as usual’ in the outsourcing and procurement of public services.

If we simply accept that the test of our worth is to do whatever it takes to survive in a financial ‘Hunger Games’, we sell ourselves short and devalue our currency.

Family, friendship and community

We have the capacity to act as a ‘currency converter’ between what the economist Edgar Cahn calls the ‘core economy’ of family, friendship and community, and the ‘cash economy’ where everyone and everything must be paid for.

As a sector we can generate money out of economic thin air – out of people’s used books and clothes, their parties and performances, their sporting endeavours, their creative talents. We can turn the feelings that motivate their giving – love, solidarity, reciprocity, even anger and frustration – into hard assets in the cash economy with which we create jobs and pay taxes.

But that currency conversion can’t happen if we operate like burger retailers competing for market share. No one ever ran a marathon to raise funds to boost Burger King’s bottom line.

Currency conversion can work the other way too, of course. When we do get cash from government we can use it to build and strengthen social currency in the core economy, to stimulate vast fabrics of human cooperation and creativity that no other sector could create for any amount of money. But that currency conversion can’t happen if we’re tied into contracts to engineer social outcomes that are so tightly specified and monitored that we morph into professional bureaucrats just to manage them.

To a cash economy up to its eyeballs in debt, and to politicians with tough value judgements ahead about how to spend public money, what our sector can do is nothing short of economic magic.

If we’re smart we’ll stop selling ourselves on the basis of our competitive value-for-money. If they’re smart they’ll realise that what we can do is not just a bargain, it is priceless.

This is an edited extract from Making Good, a new book of essays on the future of the voluntary sector published last month by Civil Exchange.

Kathy Evans is chief executive of Children England