Should Charities be Businesses?

 

Cheshire Connect links business skills with charity needs free of charge. We see many ‘matches’ that make a tremendous difference to the charities and even move some from the brink of closure. Business skills, thinking and strategy supports the development of charities, we see that daily. Does this mean that charities should operate like businesses?

 

This question has been asked many time in the third sector and there are many lines of thought around this. The Charities Commission advocates that the third sector should ‘uphold their traditional values and work as the public expects them to’. Although I feel this is important, you have to distinguish the aspects of effective charity delivery. For the public to see charities achieving their charitable objectives, they have to operate effectively and efficiently. The public and funders certainly do not want to see their donations and funding used in an ineffective way.

 

In this respect, charities have to operate effective processes and systems and be managed in such a way that the maximum impact will be felt with its objectives. This is where charities may have to look at how they achieve their delivery outcomes whilst at the same time using business strategy to support their objects.

 

Individuals can be labelled to have ‘good business skills’. This in many ways is a generic term to describe an individual who can make a business a success. When you watch ‘The Apprentice’, you will see Alan Sugar and his advisers speaking about the business strategy rather than the product. If you look at good business people, they may be involved in many different products. This would suggest that it is the application of good business acumen that makes a product successful. It does then follow that if you can apply good business processes and skills to charities, you make them even more successful.

 

However, there is another side of the argument. Some people say that leadership is the key factor. You can have individuals who are excellent business people that are process driven. If they cannot demonstrate vision and get people to follow them, then, they quickly fall from grace. This balance of leadership and business acumen has to be right. Cheshire Connect understands this relationship, indeed, it runs Connect, Lead and Learn, a network of charity CEOs that share experiences and develop their leadership in a safe supportive environment. Cheshire Connect also runs Connect, Lead and Learn Access. This looks at supporting aspiring leaders with their knowledge and processes, again, in a secure and supportive environment. The experience of our Business Connectors, clearly shows that if there is good leadership in place within a charity, the business skill matching will not only be more successful, it will ultimately develop good business strategy and better outcomes for the charity and its beneficiaries.

 

Many people have also thought about the conundrum of putting a good business person in charge of a charity. Indeed, some of the larger charities have taken this step and it has supposedly proved successful. I think that the difference here is that the larger charities have a larger workforce to ensure that it can help the leadership ‘apply’ the skills. Many charities are small organisations making a tremendous difference within their communities. They do not have the luxury of a large workforce to help them apply business skills. In my previous blogs I have discussed the need for ‘facilitated’ matches. This is where Cheshire Connect supports, as Business Connectors understand both businesses and charities. They become the ‘translator’ between both parties and allow the business skills on offer to become embedded in the processes of the charity. Cheshire Connect has proven time after time that you can embed good business acumen within charities if this relationship is nurtured and supported.

 

Business skills are unique to the individuals who are supplying them. This is because as business people, they have developed learning through the business theory and then applied the learning to different situations within business. Skills are only formed when learning is embedded and then applied in different situations. Skilled individuals are able to apply their learning in many different situations and this is where Cheshire Connect utilises the business people who want to support charities become better at what they do.

 

Through effective ‘matches’ the charities are able to apply business skills and processes to their work. They are able to form good strategy for development and sustainability. Leadership is able to see things from a different perspective and apply business skills in the ‘unique’ way that supports thinking within the charity.

 

In line with the Charity Commission thinking, I believe that charities that act as businesses lose that ‘special’ ingredient that the public and funders expect from the third sector. Charities are not businesses in the true respect. Businesses often have products that have to go to market. Charities don’t have this. They have programmes of support that produce positive impact on the community. In many ways, impact is the charity product. To produce sustainable impact and value for money, ‘back office’ strategy and processes must be both effective and efficient. Business skills and practices will help achieve this but it cannot be assumed that you put a business skill in a charity and the charity will become a business. The process of ‘matching’ and embedding business skills within a charity has to be done with care and attention paid to all contributors, the charity and the business.

 

Cheshire Connect exists to do ensure that the relationship between business and charities is successful. One that make a long term difference through a mutual understanding that charities are special organisations that need support in many ways, one being in their business support and processes.

Martin Howlett