Delivering Value in the Third Sector

Westminster Business School

Alumni

Liz PageUK Director,

South Eastern

8th May 2012

Delivering Value in the Third Sector

Introduction Share with you the challenges we have in ensuring we

deliver value Use examples from Red Cross, based on experience Link to measurement in the commercial sector so we

can explore the differences

Third Sector Qualities Value-driven

Third Sector

Independent of government

Reinvests surpluses generated in the pursuit of

their goals

What is the Third Sector? Service provider Research/advocacy/

campaigning Self-help groups Clubs and societies Intermediary

organisations Social enterprises

Focus is social value

Support to individualsChanges inpolicy/practiceDirect support to each otherShared interestSkills and advice for sector

Re-invest surpluses from business

Total Income and Expenditure in Cash Terms (£bn)

0

5

10

15

20

25

30

35

40

2005/06 2007/08 2009/10

Income

Expenditure

Source: NCVO UK Civil Society Almanac 2012

Measuring Not-for-Profit v. Commercial Organisations

Commercial Not-for-Profit

Prime measure

Means to an end

Financial returns

Non-financial measures

Social value

Financial measures

Funding Sources – British Red Cross

Regular Giving

Fundraising

Service Related

Trading

Legacies

OtherTotal: £213.8 million

British Red Cross: Key Information

Part of global Red Cross/Red Crescent movement of 188 national societies

British Red Cross: 3,500 staff and 32,500 volunteers Vision: world where everyone gets the help they need

in a crisis Mission: to mobilise the power of humanity so that

individuals and communities can prepare for, deal with, and recover from a crisis

Turning Vision/Mission into Delivery Programmes

•

Changing worldChanging world Shifts in government and

government policy

Shifts in government and

government policyFinancial survival

Financial survival

Opportunities for new

programmes and

partnerships

Opportunities for new

programmes and

partnerships

Recognising complexity

and ambiguity

Recognising complexity

and ambiguity

Legislative compliance

Legislative compliance

Attracting funding and volunteers

Attracting funding and volunteers

Strategic Direction and Plans

Planning models are very similar to those in the commercial sector

Long-term strategic activity and funding plan

Annual plans and budgets

Implementation and regular review

Individual programmes

Outcomes – Outputs – Budgets – Inputs

…more emphasis on social value.

Developing and Delivering Strategic Plan in Red Cross

Assess key external trends Align strategic priorities between senior management

team members in context of funding environment Review with Board of Trustees Engage staff and volunteers Implement cycle of annual plans and quarterly

reviews Recognise need to adjust if major emergency occurs Adjust and improve continuously

Key External Trends Identified for 2010-15 plan

Climate change and extreme weather Conflict over resources, such as water, food and oil Ongoing health crises like HIV/Aids and pandemic flu Global recession, unemployment and government

spending cuts World population growth and urbanisation

Communicating the Strategy: Saving Lives, Changing Lives

Delivery Priorities

Enabling Priorities

Emergency response

Building resilience

Individual health and social care crises

Supporting partners in Red Cross

movement

Volunteering experience

External positioning

Efficiency and effectiveness

Optimising net income

Measuring Social Value

Social value

How many people?

What difference for each person?

BeneficiaryReach - - Outcomes

Value for Money

Funding

Measuring Social Value for Care in the Home Programme

Impact Reduced suffering in crisis

Increased resilience

Common outcomes Improve recovery after illness

Greater independence

Specific outcomes Less unnecessary time in hospital

Ability to manage day-to-day activities

Indicators Leaves hospital on own as medically fit

Not readmitted within 28 days for same condition

Diet/nutrition

Medication etc. at appropriate level

Beneficiary

Challenge is to measure at organisational level

Social value

How many people?

What difference for each person?

BeneficiaryReach - - Outcomes

Value for Money

Funding

Measure reach Sample results

Conclusion: delivering value on the third sector

• Clear strategic aims to bring together efforts of staff and volunteers

• Programme goals based on impact for beneficiaries

• Skills to attract funders and “unlock” resources

• Measures which demonstrate social value as well as financial survival

Further reading

The Public Value Scorecard : A Rejoinder and an Alternative to “Strategic Performance Measurement and Management in Non-Profit Organisations” by Robert Kaplan by Mark H. Moore

Hauser Center for Nonprofit Organisations Harvard Univ. May 2003

The Blended Value Proposition : Integrating Social and Financial Returns

Jed Emerson California Management Review Summer 2003

Inspiring impact Working together for a bigger impact in the UK social sector

Tris Lumley et al. New Philanthropy Capital Dec 2011