Policy&Practice has had another productive year, culminating in several reports from our long-running Third Sector Trends Study of the voluntary and community sector which began in 2008.

It has been a difficult year for everyone in the voluntary sector due to the Covid-19 pandemic.  Policy&Practice has been on the forefront of research in this domain – publishing a several reports on the impact of Covid-19 on charities, but also offering alternative explanations on how the sector might emerge from the pandemic as, in many ways, a stronger force to sustain civil society and contribute to social and economic recovery.

New projects have been secured for 2021.  Professor Fred Robinson has been commissioned by William Leech Research Fund to undertake a new project on ‘tainted money’ and how Christian organisations should respond.  Professor Tony Chapman, Sarah Green and Dr Tanya Gray have a new project on business innovation in local context for the North East Local Enterprise Partnership.

Full details of current work and last year’s achievements can be found in our Annual Report which can be downloaded here: Policy&Practice Annual Report 2020

For the first time in 2019, the long-running Third Sector Trends Study extended its reach across the whole of England and Wales and collected responses from over 4,000 charities, social enterprises, local community groups and cooperatives.

This first working paper published in this programme of work is technical in nature and does not lend itself to easy-to-grasp headlines and soundbites. What it does do is provide a foundation upon which more accessible briefing reports can be produced which can be relied upon to provide more accurate estimates on sector activity.

Even with a large sample of organisations such as this it is difficult to generalise about findings unless data can be ‘scaled up’ to national and regional levels by using reliable multipliers.

To do this, the Third Sector Trends Study has now used data from the Charity Commission register, the Third Sector

Trends Study and NCVO Civil Society Almanac to get a much clearer picture about the situation of the local Third Sector across England and Wales.

The analysis is not perfect, methodological refinements will need to be made and more data collected in future rounds of the study to answer new questions as they arise. But it is a starting point to move analysis in new directions.

Future briefings will build on this work by exploring issues through new lenses to cast light on the wealth of diversity in civil society and the benefits that can bring to a wide range of constituencies of individuals and interests.

A blog outlining the purpose and key messages from the study can be found here.

Structure and dynamics of the Third Sector in England and Wales: technical paper on working definitions and baseline data analysis, Durham: Policy&Practice is available at here: Structure and dynamics of the third sector in England and Wales (Revised February 2021)

The Law Family Commission on Civil Society, launched today, is an ambitious programme of research into how the potential of civil society can be realised.

The Commission aims to offer tangible ideas for policy-makers, companies, philanthropists and social sector organisations to tackle challenges that limit the achievements of civil society organisations such as charities, social enterprises and community groups.

Professor Tony Chapman, of Policy&Practice, has joined the Commission’s Technical Panel to advise on research priorities and research methodology.

The Law Family Commission on Civil Society is hosted by Pro Bono Economics and is financially supported by Andrew Law and the Law Family Charitable Foundation.

To accompany the launch, a set of essays has been published today which can be downloaded here: Essay collection: Civil Society, https://civilsocietycommission.org/publication/essay-collection-civil-society-unleashed/

The extent to which leadership opportunities in the Third Sector are open to all members of the community who feel that they may have a contribution to make has finally become a serious topic of conversation in recent months.

Debates have been hampered by a lack of reliable evidence. Our new report from #ThirdSectorTrends makes a contribution to the debate by presenting evidence on the personal and biographical characteristics of Third Sector leaders across the North of England.

Third Sector Trends is a big study funded by Community Foundation serving Tyne & Wear and Northumberland, Power to Change and Garfield Weston Foundation. It has now been running for twelve years in the North of England. In 2019, nearly 3,200 organisations responded to the survey. So we have probably produced the most reliable data so far on the topic. 

What did we find out?

Amongst chairs of boards of trustees or directors, which govern Third Sector Organisations (TSOs), we found that older people, men and graduates are over-represented compared with population averages. By contrast people with disabilities and members of BAME groups (and to a lesser extent, women) are less well represented.

Amongst chief officers there are proportionately more graduates and women in positions of leadership than in the general population. People with disabilities and members of BAME groups (and to a lesser extent men) are shown to be less well represented.

There is a great deal that we still don’t know

Our report provides only a partial picture of the current situation in the North of England. It shows that something is going wrong when it comes to the appointment of people with some biographical or personal characteristics to leadership positions. Specifically, there are proportionately too few Black, Asian and other minority ethnic (BAME) people in leadership roles.

Interpreting headline statistics is not simple. It is unlikely that organisational cultures, policies and practices provide the sole explanation for unequal representation in leadership roles. It is more likely that there is a range of push and pull factors that attract or dissuade people from putting themselves forward for senior posts in TSOs (see diagram). We need to know more about these underlying social processes.

As report author, Professor Tony Chapman said:

‘The well-known process of mentoring, nudging or arm-twisting people into leadership roles (especially chairs) is probably done within very limited ‘civic core’ social circles instead of broadening the search to a much wider constituency of potential. It is also likely that many charities, perhaps inadvertently, communicate the wrong messages to potential candidates and repel as many potential candidates as they attract.’

Defining what needs to be done is simple – get more people from diverse backgrounds into the talent pool and stop discriminating against them once they arrive there. Achieving these objectives is a whole lot more difficult – for all kinds of reasons – but continually brushing the issue under the carpet just won’t do. Everyone has to play our part and get on with doing something about it.

 Diversity and Inclusion in Organisational Leadership: evidence from Third Sector Trends 2020, is published by Community Foundation serving Tyne & Wear and Northumberland and is free to download at this web address:  THIRD SECTOR TRENDS BRIEFING DIVERSITY AND INCLUSION IN ORGANISATIONAL LEADERSHIP (OCTOBER 2020)

The report can also be downloaded here:  https://www.communityfoundation.org.uk/knowledge-and-leadership/third-sector-trends-research/

A short blog on the report’s findings is available here: https://tonychapmanblog.wordpress.com/?p=160

By Fred Robinson, Professorial Fellow , Policy&Practice, St Chad’s College, Durham University

We are now in a deep economic recession and we don’t know how long it will take to recover. It’s clear this won’t be a ‘V-shaped’ recession.  Although the economy has recently bounced back rather more strongly than expected, the recovery will be curtailed by the latest Covid-19 restrictions — which are expected to last for six months. The current second wave of the pandemic will inevitably hit consumer confidence and spending as people realise the crisis is far from over and the future remains very uncertain.

The next few months will be tough and anything like a full recovery is a long way off. Commentators are still talking about the worst recession in a hundred years and the Chancellor promises a long, hard winter.

There will certainly be a big increase in unemployment this winter as businesses cut back or close, the furlough scheme ends and redundancies increase. The Chancellor’s new Job Support Scheme, further grants for the self-employed, and tax cuts will help save some jobs, but unemployment is still going to rise substantially.

The big unknown is the Covid-19 pandemic. We might manage to control and reduce the current second wave of infections; we might get a vaccine sooner rather than later; we might have a test and trace system that works properly. Let’s hope so. But even if those things do come right, and the economy starts to recover more strongly, a lot of economic damage will have been done, businesses will have closed and many jobs lost.

So whatever happens, we are going to have a period of high unemployment. What will that be like?  The North East has had a lot of experience of unemployment but this is likely to be on a scale not seen for the past 40 years.  We have to go back to the 1980s to get a sense of what might be in store.

There are similarities and also differences between the 1980s and 2020. Then, as now, the Conservatives were in power — but Boris Johnson isn’t much like Margaret Thatcher. In the 1980s inflation was considered the key problem, with monetarism and public spending cuts the answer. Today, there’s very little inflation, interest rates are around zero and the Conservatives seem to have temporarily converted to Keynesianism, with public spending considered essential to stimulate demand and growth.

But what could well be the same is the unemployment rate. In 1983 UK unemployment peaked at over 3 million, a rate of nearly 12%. Mass unemployment like that hadn’t been experienced since the Hungry Thirties. It’s predicted that unemployment could again reach equivalent levels this winter, having doubled in just a few months. There will be also places with much higher unemployment; in the 1980s unemployment peaked at nearly 20% on Teesside.

Unemployment is very destructive. People lose their livelihoods and are forced to survive on meagre benefits. They also often lose their sense of purpose and self-esteem — in a society that judges people on what they do for a living. Despite what some in the media say, life on the dole is difficult. As we know all too well from experience in our region, unemployment brings poverty, poor health and multiple disadvantage.

In the 1980s, unemployment stemmed from deindustrialisation, which hit the North East very hard. Then, male manual workers in heavy industry were thrown out of work. This time, it looks like young people and also some older workers will be most affected, as jobs in sectors such as hospitality, leisure and retail disappear. There will be some dramatic closures — a bit like the closure of Consett steelworks 40 years ago — but most job losses are going to be smaller scale, across a great many businesses.

Places that had big job losses and high unemployment in the 1980s took decades to recover; some areas – like the Durham Coalfield – have never properly recovered. This time, the people likely to carry the enduring ‘scars’ of the Covid Recession are likely to be the present younger generation, and generally the least skilled, those in precarious employment and the already disadvantaged. The places with the most visible scars may be desperate town centres.

In the 1980s Margaret Thatcher’s government was determined to reduce inflation and restructure the UK economy, and considered that unemployment was an unfortunate consequence. She is remembered – especially in our region — for her tough approach. There was government action to tackle unemployment; famously, Nissan was persuaded to come here and there were unemployment schemes like the Youth Training Scheme and the Community Programme. Even so, unemployment stayed high in the former industrial regions through the 1980s, while London and the south east grew much more prosperous.

And this time? Chancellor Rishi Sunak has reduced the impact of the lockdown by sustaining household incomes, but much of the pain may only have been delayed. After the furlough scheme ends in October the Government’s subsequent support schemes will save some jobs – at least for a while – but not others. Spending on infrastructure projects, the ‘kickstart’ scheme subsidising work placements for young people, training schemes and tax breaks will help to boost demand and increase employment. This government is not as brutal as Thatcher’s government, but its capacity and willingness to intervene in the economy are limited.

High unemployment will no doubt bring people together in adversity – the current crisis has reminded us how much latent community spirit and solidarity there is.  But high unemployment brings dangers. In the 1980s, unemployment and poverty generated unrest – such as the inner city riots in 1981 and the Miners’ Strike in 1984. Now, the UK is more economically and culturally divided than ever and it could prove even more difficult to respond to grievances and manage tensions. In the 1980s the sense of unfairness fomented tensions that proved hard to control; in the coming months the ‘left behind’ places and people will need convincing that the government cares about them and really is committed to ‘levelling up’. Government will have to develop not only competence – but also compassion.

This article was first published in the Northern Echo on 30th September 2020: https://www.thenorthernecho.co.uk/

A report published today warns that charities and social enterprises in deprived parts of the North of England are most at risk from the economic effects of Covid-19.

The report, by Tony Chapman, Sarah Longlands and Jack Hunter (published by IPPR North) analyses the experiences of third sector organisations in the region over the last decade.

The new analysis shows that although the third sector is more resilient than generally thought, one in four charities in the North are based in deprived areas, and it was these organisations which were hit hardest following the 2008 recession and subsequent period of government austerity policies.

Covid-19 has had a disproportionate impact on people already on the sharp end of inequalities. This means that local charities will face difficulties in the coming years due to rising demand for their services but falling income.

Despite the significant challenges posed by the economic effects of Covid-19, today’s report shows that Northern third sector organisations, have a ‘make-do attitude’ are resilient and able to adapt well to change.

Professor Tony Chapman of Durham University observes that:

“Charities and social enterprises are more resilient than generally thought. They tend to be financially prudent and can adapt to circumstance. After the 2008 crash and years of austerity, many showed this flexibility by generating more income from self-generated trading. But now, cashflow is seriously under threat because Covid-19 has limited their scope to run shops and cafes or charge for services.”

The report calls for a new deal for the voluntary and community sector in the North by building support into plans to ‘build back better’ such as the creation of a Northern ‘growth body’ or ‘prosperity board’ which is widely expected to be announced as part of the Devolution and Recovery White Paper in Autumn 2020.

Sarah Longlands, Director of IPPR North argues:

“Third sector organisations provide the foundations for a strong and resilient Northern economy and continue to play a vital role in supporting communities during the current Covid-19 Crisis. “So we simply cannot ‘level up’ from the Covid-19 pandemic unless we ensure these organisations receive the support and the respect that they deserve to help weather this storm.”

The report can be downloaded from IPPR’s website at this address: https://www.ippr.org/research/publications/third-sector-trends-survey-2020

In June 2020, the long-established Third Sector Trends Study  carried out a ‘one question survey’ with former participants of its major study across England and Wales which took place in 2019.  Its purpose was to find out the extent to which charity leaders’ attitudes had changed about their prospects for the future after the shock of the Coronavirus pandemic.

Now that we have these data, it will be possible to see how opinions have changed in future, together with in-depth analysis of the shifting structure and dynamics of the sector when the main survey returns in mid 2022.

Inevitably, following the onset of Covid-19 and in light of its social and economic consequences, confidence has taken a serious knock. From a 10 per cent sample of the original study of 4,000, the results show that:

• In June 2020, 56% of TSO leaders believed that their income would fall in the next two years compared with just 16% in 2019.
• Only 11% of TSO leaders expected that income from private sector sources would fall when asked in 2019, now 62% expect that this will be the case.
• Half of TSO leaders believed in June 2020 that grant income would decrease over the next two years, compared with just 19% in 2019.
• In June 2020, 61% of TSO leaders thought that statutory funding would decrease, compared with 38% in 2019.
• Expectations about support from volunteers has changed: in 2019 only 8% of TSOs thought that support would fall, by June 2020, 18% of TSOs leaders thought this would be the case.

Of course, these are only predictions, because nobody really knows what will happen next. Indeed, written  commentaries from survey participants, often reflect ambivalent feelings.  As one charity leader told us:

“On the one hand we’re exhausted by all that we’ve had to do at pace in the last four months. But at the same time we have to find the energy to grasp some really important new opportunities (and effectively manage them) before they slip away again. Wish we could just hit the pause button and have a bit of time to take stock, but we have to reset our strategy, plan for a different future, build some new relationships and partnerships, all whilst continuing (for a long time to come) to deliver our crisis response work (which is itself exponentially different to our usual day job.). Oh, and dealing with our own personal experiences of the crisis to boot, and support our staff in their own personal experiences too. Just drained!”

Rob Williamson, Chief Executive of the Community Foundation which commissions Third Sector Trends said:

“When we launched the 2020 edition of Third Sector Trends in May we knew that the data would need to be updated because of the pandemic. We also knew we had a large and willing community of respondents who we hoped wouldn’t mind filling in another survey. As Professor Chapman notes we can’t say whether the fears of organisations surveyed the organisations will come to pass but the data gives us a benchmark for when we come back in 2022 and find out whether this lack of confidence was misplaced.”

The report is available now from the Community Foundation serving Tyne & Wear and Northumberland at this address: Third Sector Trends Covid-19 Impact Survey Report

Tony Chapman has also written a short blog on the key findings which can be accessed here.

When community business leaders completed their Third Sector Trends survey in 2019, there was a good deal of optimism in the air. That optimism must surely have been dented with the onset of the Covid-19 crisis and, undoubtedly, there will be casualties as the economy falls into severe recession.

We don’t yet know how quickly the economy will recover or whether the economy will remain in the doldrums in the longer term. Ultimately, nobody will know for at least two years – at which point – Third Sector Trends will return to find out.

Ailbhe McNabola, Head of Research and Policy at Power to Change, said: “This report shows that community businesses perform a unique balancing act, marrying enterprise and entrepreneurialism with a goal of making a real difference to places where they are based. These attributes will be important as places begin to recover from the social and economic impacts of the Covid pandemic. Community businesses can play an important role in the places where they work in the months and years ahead.”

As this report shows, it should not be taken as read that the future for all community businesses will be bleak. The pandemic may help to produce changes in the way communities think and act in future. Maybe local people will feel a stronger sense of commitment to community and to the organisations which champion and service it, such as community businesses?

In 2019, Power to Change supported the Third Sector Trends study across the North of England alongside the Community Foundation serving Tyne & Wear and Northumberland and Garfield Weston Foundation. Over three thousand organisations responded (of which over 650 worked as community businesses).

This report for Power to Change shows that community businesses are resilient entities which are financed at least in part through self-generated trading activity. And while community businesses cannot be said to be more committed to their communities than general charities, this report shows that community businesses usually have more capacity to deliver support because they are larger organisations.

When compared with other charities, community businesses also tend to be more ambitious to grow, are keener to engage with local policy makers and invest more energy in attending events and meetings to debate or decide upon policy and action to improve community life.

Resilience is underpinned by the agility and flexibility of community businesses to spread financial risks. Usually, as this research shows, they do this by engaging in more than one form of self-generated trading activity at a time.

For example, amongst organisations which are involved with retailing and hospitality activities, 67% also manage a community building and 43% offer other types of paid-for services.

Trading is crucially important to the financial wellbeing of community businesses, but few can keep going on the surpluses they produce from self-generated trading alone. Even in the best of times, most also rely on a variety of other sources of income such as contracts, grants, fundraising, subscriptions, investments, gifts and so on. Few community businesses choose to keep all their eggs in one basket.

Those community businesses that face an immediate cash-flow crisis due to Covid-19 will be feeling pretty vulnerable just now. And for those who are almost wholly reliant on trading to sustain themselves it may be hard for them to see a viable future.

There is so much uncertainty ahead. Temporary measures such as emergency loans, grants, rent holidays and furloughing are welcome – but these are only stop-gap measures for community businesses. But one thing is abundantly clear from this report – funding bodies must not assume that community businesses can be left to their own devices in the longer term just because they trade.

Community businesses in the North of England 2020: new comparative analysis from the Third Sector Trends Study,  by Tony Chapman, Bristol: Power to Change. The report and full blog can be downloaded here: https://www.powertochange.org.uk/research/prospects-community-businesses-north-england/