Divided charities splinter good effect

WILLIAM MACE

New Zealand has one charity for every 172 Kiwis. That compares to one charity for every 297 Brits or 446 Australians.

The high number of charities is seen as counter-productive by many, with limited philanthropic resources being spent on a duplication of costs for different organisations that are tackling the same problems.

"You don't have to be in the charitable area for long before it becomes evident there's a lot of public unease about the number of charities in New Zealand and the potential for duplication," says Mark Bentley, chief executive of the Auckland Communities Foundation and a board member of the Outward Bound charitable trust.

"A lot of it is probably around the Kiwi psyche - the 'just do it' attitude - if we feel passionate about something we just get on and do it.

"If we stopped and thought for a second about how we can do this together or more effectively or more efficiently, we might be a little more successful."

Mr Bentley sees collaboration between charities working in similar areas as a way to cut out duplication and, in turn, create greater confidence in the not-for- profit sector.

But he believes charities and foundations are often reluctant to adopt what are seen as private- sector models for improving charities' performance.

He conducted the survey recently for his MBA, questioning the chief executives of eight foundations representing 15 per cent of the philanthropic funding in New Zealand in an average year, excluding the Lottery Grants Board. He also interviewed nine charity bosses as well as representatives of the Charities Commission and Philanthropy New Zealand.

The survey raised the prospect of using incentives to encourage collaboration - everything from financial inducements such as priority funding for joint projects to educational initiatives aimed at training collaborative leaders.

The prevailing attitude to this suggestion, though, was summed up by one survey respondent who described it as "blackmail, bribery and arm-twisting".

"Incentive is a dirty word in the not-for-profit sector, whereas they are a common practice in business," says Mr Bentley.

"It's that belief that if you're in the charitable sector you're doing this for the right reasons anyway, you shouldn't need something else to drive you to do the best because your whole focus is around societal good."

Charities Commission chief executive Trevor Garrett warns charities need to become more professional because the days of foundations "throwing money out anywhere" are over.

Funders are placing a greater emphasis on whether a charity has the focus and ability to use its funding effectively, and the sooner charities start working towards those higher standards the better, says Mr Garrett.

"One thing that a funder's got, and I hate to use the word, is power.

"They've got the money and the charities want it and so if a funder says, 'This is what I'm wanting to fund' and you don't do it, they'll just say, 'That's fine, we'll look for somebody else that we can partner with'."

But executive director of the Todd Foundation Kate Frykberg says there is a danger of funders over-stepping their bounds in dictating the terms of their grant- making, taking the decision out of the charity's hands.

Mr Garrett also recognises the risk of "mission drift" - charities chasing the dollar and digressing from their original purpose.

Last year the commission held 16 forums around New Zealand aimed at encouraging charities to assume effective structures and practices.

But Ms Frykberg's foundation is using a more direct financial incentive through its involvement in the Working Together More Fund - a collaboration with three other foundations to award priority seed funding to charities that are themselves collaborating.

The Wayne Francis Charitable Trust, the JR McKenzie Trust and the Tindall and Todd foundations formed the fund in October 2009 to encourage "working together" as a response to economic pressure throughout the recession.

But Ms Frykberg believes it has worked out as a better way to do business in general.

"Actually it's now clear that it's not necessarily part of a recession plan, it's part of maximising the benefit to the community.

"Collaboration is a means to an end: the end you're wanting is positive social change, and in general we can make change more effectively if we work together."

Since the WTM Fund's establishment it has granted $261,902 to 36 projects involving more than 150charities and community organisations. These seeding grants typically help finance getting different organisations in the same room where they can build trust and common purpose.

"All the collaborations are based on trusted relationships - if you haven't got one you're going nowhere, so what builds that is actually having an understanding of each others' perspectives," says Mr Bentley. "When they're sharing best practice, passing on the things that really work, handing things seamlessly between each other - that's what you want rather than everybody trying to do everything themselves and ending up doing half as much in a sub- standard way."

ANoft-cited example of charity unco-ordination is "cancer clutter", a plethora of cancer-related charities that cover all varieties of the disease.

The Cancer Society itself maintains a federal organisation with six regional offices, 15 cancer "centres" and one national office which handles regulatory and promotional campaigns.

Critics call the structure a frustrating duplication of functions which similar organisations such as Barnardos have left behind.

The society's national president, Clive Cleland, says the structure "is always a topic of conversation" but asserts the regional federations are necessary in order to serve local communities, and that each runs a "lean and mean" administration budget.

NZCS chief executive Dalton Kelly says it costs the organisation 12 cents to raise a dollar, which is better than best practice.

Mr Kelly says the greater concern is the "clutter" created by competing cancer charities.

Two years ago he set up Cango (Cancer Non-Governmental Organisations), a collective of the seven biggest cancer charities representing about 75 per cent of the cancer fundraising sector.

The charities' chief executives meet quarterly to discuss co- operation, receive messages from the Health Ministry, and work towards a long-term vision of closer ties and shared services.

"We don't want to take anybody's identity away - the idea would be to still keep the front-of- house cancer organisation but at the back we could certainly become more efficient by having shared services."

As an example, he says, combined resources could be put into a "scientific research pot" and a common research committee to evaluate projects.

"There's a lot to be done because there's an enormous amount of heritage in these organisations but the idea of talking about things is that we don't duplicate, and if we can co-operate then we do, and longer term hopefully it will happen," says Mr Kelly.

It won't happen overnight, says Mr Bentley. The process is bound to be lengthy.

"Collaboration is not always going to be more efficient, actually it's quite time-consuming and it's hard to do.

"Where it trumps everything else is its effectiveness – you might take a little bit longer to get there but you might have twice the impact because two organisations are working in a far more co-ordinated fashion."

- © Fairfax NZ News