Making membership matter: are we a movement or a market? My remarks at the opening session of CORE 2013, NAVCA’s chief officers residential event, on September 17 2013. Thanks Neil, and to Rob for the excellent research work he is doing about infrastructure. It really is worth reviewing and using it in your organisations’ strategic thinking. My role is to respond, and give you some thoughts from a fellow chief officer of an infrastructure organisation.

A movement or a market? So, are we a movement or a market? The reality is, (and I am primarily talking about the local level at which we all operate) we have to be both. We tread a fine line between simply being a movement which people and organisations want to believe in and trust, and where we lobby and act on their behalf; and a market – and the commercial realities of the world which that implies. If we believe that we are simply a movement, we are deluding ourselves. The reality is that for too long we have relied on being a movement- some using it as a crutch - simply believing that because we were infrastructure organisations, typically funded through large grants or agreements with councils, that people would use our services, and that councils would continue to support us and our work. The reality is that the world is moving on – there is less money around, and funders are taking a more critical look and the services that we provide. There are new players on the block. If we continue to think we are just a movement, I think we are doomed.

The best elements of a movement However, we do need to retain the best elements of being a movement - for CVAT that is having a membership, who we involve and consult; who have the power to elect our board; a strong policy and voice function, which is able to act for and with; and demonstrate the effect we are having with and on behalf of local communities and voluntary and community groups. One example for CVAT is setting up Tameside 4 Good to provide a practical response to the ‘movement’ – to help them respond to reduced funding and help harness the power of businesses. But if we are a market, that implies customers. We need to think much more about who our customers are, and how to meet their needs. And markets have competition. Something that is becoming more of a reality for many of us, with the open commissioning of some infrastructure contracts.

Our customers So, customers. At CVAT, we have thought about our customers, and segment them into four groups. Broadly these are:

1. Individual voluntary and community groups 2. Volunteers and potential volunteers 3. Public sector organisations 4. Other people who may want to buy our services- and that includes other

infrastructure organisations We have to think about what customers want, and what they are prepared to pay for. At CVAT, we are fortunate: we retain a significant degree of public sector funding in the form of larger grants or contracts. Traditionally, infrastructure organisations have used this funding to provide services free to Individual voluntary and community groups, Volunteers and potential volunteers. The downside is that the recipients of that service haven’t always valued it. At CVAT, we have reviewed and revised our offer to voluntary and community groups, volunteers and potential volunteers, and our new service model is essentially:

1. Self Service / ‘digital by default’ underpinning strategy

2. Free offer – because someone else is paying –still providing face to face support, but much more targeted.

3. CVAT+ - our chargeable offer For us, an important philosophy is those that can pay should pay; - but cost should not be a barrier. CVATplus provides a range of chargeable services to other organisations – business planning, print and design; CRB checks, time out strategic planning days; grant management. We are often approached by larger local organsiations, asking if we know of consultants who could do X or Y. Our response is now “yes, but we also provide that service”. We shouldn’t be afraid of asking for money – if we believe that the quality of our product is right, and correctly priced. At the end of the day, someone has to be willing to pay! I’m not going to talk in more detail about these – Naomi Sampson, CVATs development manager, is talking at the Business model innovation session tomorrow if you want to find out more.

Competition and choice As I said a moment ago, markets need customers, and imply competition and choice – the ability for the customer to choose where they buy their services from. This may seem counter-intuitive to the current push for merger (which it could be argued would reduce choice). We have tested out, using TLI funding, having a specialist support fund – buying in specialist advice and support for organisations where needed, mainly consultants but expecting groups to contribute themselves. Voluntary Action Sheffield have done

something similar. We have committed to continuing this scheme, beyond TLI, if it has evaluated well. For us, it has helped to increase choice for front line groups, and allow them access to more specialist support than they would normally receive through CVAT. It has also helped us think about how we compete – and areas where we can compete. Of course, we need to know how good we are – and demonstrate the quality and impact of our offering. Just because we are a charity doesn’t mean our quality should not be as good as private sector providers or consultants, or our costs should be higher. We have to benchmark ourselves against those organisations. We do have one advantage – we can say (and do say) any surpluses are reinvested in supporting voluntary and community action – something freelance consultants and private sector companies can’t say. Quality awards, such as the NAVCA quality award, are important for us: we have it built into our SLA with the council. Hopefully, this should mean that if that work was to go out to tender, it would be a limited field able to bid!

Membership models At the moment membership of CVAT is free. We’ve just reviewed this – and done quite a lot of research around the subject- and decided to keep it free. Our rationale is simple: I want the legitimacy that having 1,000+ members gives us, particularly when negotiating with public sector partners. Our assessment is that charging for membership would not generate enough money to make charging worthwhile, and would significantly reduce the number of members that would pay. There are very few local organisations that can charge enough to justify the admin cost of raising invoices etc. Instead, we are going to offer an enhanced model – for a fixed fee groups will get a range of our chargeable products and services, at a discount on our usual price (for example, two places to our annual conference; access to our e-learning portal etc). I should stress that this is a ‘work in progress’, so its too early to know if this will work. Collaboration I do just want to say a few words about working together – the CVS, or local infrastructure organisation, movement. CVATs approach to collaboration is simple- just three tests, or touchstones:

Can’t negatively affect the service local VCOs get Must be better than cost neutral Key stakeholders must approve

Collaboration has to fall into one of three or four relationships.

Make – sell; buy; share. Going forward, we have to get more used to buying from each other, or sharing. And sometimes, there are some things that I can’t (and won’t) just give away free to other organisations –4 Good is one of those. We have developed a product, and

invested a significant amount of energy into it: we know it works, and so think it is a good investment for others. Salford, Sefton and Wigan CVS agree. Some things we have developed a specialty in: marketing and design for example. We can, and do, provide a policy briefing for other CVS to brand as their own, which is currently being bought by three organisations, and newsletter design and production. It’s cheaper for other CVS to buy this from us, than employ their own information and communications officer. However, I am still shocked (and somewhat disappointed) by the reaction of many in our movement – who say that we shouldn’t be charging, that we should simply give it away; or that what they currently deliver is ‘good enough’ quality for their local members. I don’t want you to think we put a price on everything: there are also times when its okay to share: for example across GM we now share the production of a monthly funding guide, saving significant time in each organisation. We have jointly invested in an e-learning platform with colleagues in Oldham, and Stockport will shortly be joining us in that venture. But we also need to get more used to competing with each other – something that the private sector does well is knowing when to collaborate, and when to compete – and to be honest about when it is doing which.

The similarities with local newspapers 15 years ago I worked in the regional newspaper industry – here is the latest edition of the title I used to run. And in thinking about today, there are many similarities (and I am not talking about the News of the World end of the spectrum). Good local newspapers think of themselves as part of the community – even though the Buxton Advertiser here appears ‘local’, it is actually part of the Johnston Press group, one of the largest newspaper publishers in the country with revenues of £328m, and profits of nearly £60m:

“We serve hundreds of communities across a variety of channels, providing access to local information. We have unique content created by teams of experts living in the cities, towns and villages where we publish”

The best local newspapers are trusted, impartial ‘beacons’ in communities . And yet they have to be commercial to exist. Of course, the local newspaper industry is currently suffering a huge decline – failing in large part to adapt to the changing environment around them, with increased digital access and consumers having access to free content. I think we have lessons to learn from that.

In summary Tony’s top six points

1. We are both a market and a movement – we have to retain and harness the best elements of both to survive and thrive.

2. We have no ‘right’ to be funded – we have to be excellent. There is competition - baseline is private providers

3. We have to demonstrate impact – to VCOs and funders

4. We have to find a way of balancing the legitimacy that a large membership gives us, with a way of earning income from services to members

5. We need to understand who our customers are, and what they want - and be clear – what is free (and why) and what isn’t

6. And don’t be afraid to ‘plug your wares’ -to ask for money. People can always say ‘no’ and choose to shop elsewhere. If you never ask, you never get! (and on that subject, CVAT is a Big Assist supplier, so are very happy to talk about how we can help other infrastructure organisations

More information:

Tony Okotie Community and Voluntary Action Tameside E: Tony.okotie@cvat.org.uk Tel: 0161 339 4985 Twitter.com/tonyokotie