Capacity building – a dividing line in 2015?

March 10, 2015 at 10:16

Last week’s election hustings at the All Party Parliamentary Group on Civil Society and Volunteering generated a number of news articles. I attended the hustings, which were certainly lively and prompted a great deal of discussion and debate afterwards.

There was the usual back and forth over the Lobbying Act and exchanges over Eric Pickles statement on grants to charities not being used for lobbying. However, the most interesting section (for me) was the on capacity building for the sector, and I think it revealed a subtle divide between the Conservatives and Labour positions.*

When asked about capacity building the sector, Rob Wilson focused on social investment and the new £100m Access Foundation which will provide grants to help support charities to access social investment (the details are yet to be revealed). This refrain was repeated a number of times through the course of the debate, and appears to indicate that a Conservative (or Conservative-led) government would see the capacity building as something to be generated through private resources, rather than from the government.

This is a significant development, as traditionally, capacity building has been seen as something that government has needed to drive because other avenues of funding would not be sustainable. However, with growing interest in venture philanthropy there has been talk of a shift by private funders backing projects to backing organisations, which could lead to more resources on capacity building support. Rob Wilson’s focus on social investment may indicate a Conservative acceptance of this path, with the government becoming fully a ‘commissioner’ for the sector, rather than a builder.

Lisa Nandy, by contrast, although eschewing big national programmes did talk about the need for local authorities to help support local charities and highlighted the importance of grant funding. The emphasis on localism aside, this appears to be a much more traditional view of capacity building which is focused on being government-led and using public resources to support the development of the sector.

This area is important for the next five years as one of the biggest challenges continues to be the charity sector’s attempt to adapt to public spending cuts and a tough operating climate. Charities need support to build up their capabilities in a number of areas, particularly in financial planning and management. Charities have to be given the resources to review their business models and the support to change their strategies to meet this ‘new normal’. Either of the approaches outlined above would significantly impact on the charity sector and particularly small and medium sized charities that need this support the most.

There are pros and cons to both the philosophies outlined above and they raise a number of questions.

Can private resources be accessed on a big enough scale to meet the needs of the sector? How can we stop unnecessary duplication and ensure compatibility between different types of support by investors, foundations and other sources of philanthropy? Will local provision of capacity building merely create a ‘post-code lottery’ for charities? Do local authorities have the necessary resources and expertise to identify the needs of local organisations?

And for both, there is the question of how do we stop capacity building being short term injections of cash towards long term investments in charities’ potential?

Regardless of the funding model the next government will need to find a way to get necessary resources into the sector and we will need to watch closely the outcome in May.

*The Greens were also in attendance and supported capacity building for the sector. The Liberal Democrats and UKIP were invited but didn’t attend the hustings.