Charities must think more like business to stay ahead in a tough new environment

 
Lloyd Dorfman
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While the Prince's Trust supports 60,000 young people every year, there are still 900,000 not in education, training or work (Source: Getty)

An independent report published this week shows that the Prince’s Trust, the charity of which I am chairman, has returned £1.4bn in social value over the last 10 years. It is a figure of which we are immensely proud. Behind it lies a myriad of human stories. We have helped to transform thousands of young lives, enabling young people from disadvantaged backgrounds to get into some form of employment, education or training.

From my work at the Trust and on the boards of other charities, I have seen the landscape for the sector become increasingly complex and challenging in recent years. The good news is that charities are better equipped today. My early experience of the charitable world was that it was well-meaning and altruistic, but sometimes lacked rigour. But increased risk and governance have forced the sector to professionalise in a big way.

There are some prevailing challenges for charities which demand attention.

First, they need to demonstrate and measure their impact. At the Trust, we are constantly thinking about our own impact. Since we were founded by the Prince of Wales 40 years ago, we have helped 825,000 young people get a job or start a business or have assisted in some other way. We now support almost 60,000 young people every year.

But we cannot rest on our laurels. While it is a tremendous result that we have returned £1.4bn in value through, for example, reducing re-offending and getting young people off welfare benefits, with nearly 900,000 16-24 year olds not in education, training or employment, there is much still to do. That is why we are running the One Million Young Lives campaign to expand our work four-fold.

Read more: Saving Britain’s charities: The role of the finance function

Second, charities face a whole range of regulatory and other risks, such as reputational, health and safety, as well as safeguarding for those looking after young people. It is crucial that charitable boards have the right blend of skills for management to draw on and to help with this greater oversight burden. This will include financial, legal, creative and other expertise relevant to the particular work of the charity. This escalating complexity will only add to the regulatory burden and costs, so charities will have to work harder just to stand still.

A third element in the new terrain relates to fundraising. There have been concerns about over-aggressive public fundraising, as well as the endorsement of uncompetitive commercial deals. At the same time, charities need to think commercially to make their assets sweat.

Economic pressure and uncertainty following Brexit could result in a further reduction in public sector funding and a softening of donor bases. At the Prince’s Trust, we work in partnership with businesses, large and small, to boost employability. Where we can, we try to demonstrate innovation with social benefits. Another example of this I was involved with was the Travelex cheap tickets scheme with the National Theatre.

Read more: How entrepreneurs can gain from CSR

Given all this, charities certainly need to continue to adapt to the new world. They are facing more scrutiny than ever before and also a loss of public confidence in their work. As an indication of this, public trust in charities has dropped from a score of 6.7 in 2014 to 5.7 in 2016.

We should not be too downbeat. Charities like the Prince’s Trust have an enormous impact and benefit from public goodwill. Britain is still one of the most generous countries in the world, with three-quarters of people donating to charity. Another 4,000 or so new charities are registered every year, adding to the 165,000 already running.

It is vital that we at the Prince’s Trust and all other charities heed the lessons of the recent past. Hearing our young people talk about their troubled pasts and hopeful futures, however, is one of the most worthwhile and moving aspects of chairing the organisation. A common refrain is “if it weren’t for the Trust, I’d be in prison or dead.” Despite the more challenging external environment, it is these stories, as well as the statistics, that remind us why we do this work.

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