Ian Baker (SSE‘s Development Director) and I attended the launch of New Philanthropy Capital’s new report last week about funder reporting, entitled Turning the tables in England. It was Ian’s third report launch in 36 hours, setting some sort of unwanted sector record possibly, but was a fairly interesting (if not revelatory) event. The report, despite featuring some of the most banal photography imaginable (the black and white shot of some shelves on p.16 is a particular highlight), has some good stuff. The main finding is that the reporting costs for statutory (government) funding are 3 times higher than independent (trust and foundation / corporate etc) funding. Not a surprise to any seasoned sector-heads, but ‘ouch’ all the same.
Their recommendations on the back of that are somewhat predictable: standard reporting where possible; funders understanding costs of reporting more (charities making this clearer more); charities should question funders’ requirements more; funders should be able to justify their requirements….and so forth. Of course, this all sounds great, but very difficult in practice. The examples given of consolidating reports were either a) different streams with one funder (Southwark Council) or b) various streams with exactly same type of funder (PCTs in London). But, for example, SSE gets funding from: local, regional and national government; corporates; housing association foundations; housing associations; trusts and foundations; individual philanthropists etc. etc. Standard reporting? Fat chance, I’m afraid. Particularly given the ‘projectization’ of our activity through this funding matrix.
There’s certainly something to be said for pushing charities to report how much it costs them to report (if you see what I mean), and there’s something to be said for exploring how existing reports might be used for other funders. But there is also the possibility that the monitoring/reporting burden is simply shifted to the funder, in that they have to look at annual reports / returns / online materials to collate their own report. And, from a taxpayer point of view especially, does it matter if the 9% is wasted at the funder end or the funded end?
It is, as Phil Hope put it at the launch event, about the ratio of cost:value, because reporting is extremely important for all funders, and rightly so, to prove the social impact of their investments. And to ensure that their funding is being used as in the original application / proposal. What I’ll take away from this is for us to think about the bare bones of a standard report which might prove the basis for other bespoke reports (and might, occasionally, prove enough on its own), and to ensure that we adequately cost our reporting. We’ve got better on this, but my gut feel is that we are probably still underestimating.
Worth reflecting, finally, on another industry where a severe lack of regulation and monitoring has caused such a financial crisis. I’m referring to the collapse of Lehman Brothers, of course, and the other banks that have been bailed or are needing to be. Towards the end of last week, I was advising an SSE Fellow about a presentation he was giving to the Corporate Responsibility representative from…..you guessed it, Lehman Brothers. We shouldn’t underestimate the impact that the financial crisis may have on this sector: either directly in the case above, or through a reduction in philanthropy, or through a complete readjustment of corporate priorities. Will CSR still be the first thing to be cut in times of trouble? And, tongue partly in cheek, will charities have to do due diligence on which corporates they seek to work with? I think the Charity Commission might want to advise them on having sufficient reserves.