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Charities’ ‘competitive behaviours’ in contracting negatively impacting sector

Organisational culture and behaviours are having a negative impact on the sector and its beneficiaries by undermining sustainability as well as the trust between service-providing charities, the emerging findings of a new project suggest.

While charities remain hampered by the broader commissioning and procurement environment, the project also found concern in the voluntary sector that organisations’ own competitive behaviours can lead to poorer outcomes for the people they are intended to serve, the interim report of the Rebalancing the Relationship partnership says.

The interim report summarises feedback from an open call for evidence as well as a selection of interviews and the views of steering and advisory groups reflecting a broad range of charities. Around 150 organisations have been engaged in the project so far.

A number of charities expressed a concern that others appeared to be driven by market growth and succumb to mission drift, or failed to consider the impact of their strategies on the sustainability of other organisations valued by beneficiaries.

Rebalancing the Relationship is a collaborative project between NCVO, ACEVO and Lloyds Bank Foundation, intended to examine the relationship between larger and smaller charities in contracting. But the report stresses that organisations of all sizes reported concerns about the practices of others in contracting.

The partnership has made a number of draft recommendations to help the sector shift its approach, which are also published in the report for consultation. The draft recommendations for service providers, largely based on what has been identified as existing good practice in the sector, include:

  • Organisations should recognise the power they have to effect change even while working within a challenging system
  • Organisations should consider the impact on an existing provider and beneficiaries before deciding whether to bid.
  • Put focus on ‘serving the community not the commissioner’
  • Adopt a ‘just because you can, doesn’t mean you should’ mindset, which focuses on improving impact not just growing scale

A consultation before final recommendations are made is open until midday on Friday 27 March 2020.

Sarah Vibert, director of policy at NCVO, said:

We’ve known for a long time that there were concerns about how organisations compete for government funding, but this significant study unveils the extent of the impact.

I hope this report is the jolt the sector needs to take these issues seriously and it should be on the board agenda of all public service-providing charities. While recognising that some elements of commissioning and procurement practice are hampering us, we also need to recognise our responsibility to strengthen the whole sector, not just our own organisations.

We still have the opportunity to fix this and create a truly sustainable ecosystem of service providers that enables charities of all types and sizes can provide truly excellent support and services. Making sure they can continue to do so has to be the responsibility of trustees and senior managers, who need to reflect on how their organisation is either supporting or eroding the health of that overall ecosystem of different organisations.

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