Value beyond money
Since the industrial revolution and before, some of the most vulnerable children of the world’s cities have been supported, cared for and championed by voluntary-managed organisations that complement and sometimes challenge the role of the state. Today these charities are under increasing pressure to emulate the business models of the commercial or public sectors; to demonstrate their ‘value for money’. In the first part of this two-part essay Kathy Evans, CEO of Children England, highlights the risks in this and urges her sector to argue for its unique role; and a funding model that recognises it.
“Gross national product does not allow for the health of our children, the quality of their education or the joy of their play … it measures everything in short, except that which makes life worthwhile.”
– Robert Kennedy 1968
My challenge for the voluntary (charitable or civil society) sector over the next decade is to find a new relationship with money. I don’t mean that money doesn’t matter at all in what we do, but I believe as a sector we have allowed it to dominate, distort and distract us from our greatest economic role – the creation of value beyond money.
Long before I ever entered an economics classroom my father taught me something about money. “Remember that money has no value in itself. It’s just something we invented to let us do things. It’s not for worshipping or stockpiling, you can’t eat it or read it. The only value it has is the value you place on what you could spend it on.” Paying a price for something you don’t like much will feel expensive, he went on to explain, but the same amount spent on something you treasure will feel like a bargain. Their price is the same but their value is different. Value is a feeling, not a fact. That week his insight helped me to choose between buying sweets or colouring pens, but it’s a perspective that has remained with me ever since.
In today’s society, where the price of one person’s designer handbag could pay six months’ rent for a whole family in the same country, surely we cannot doubt that the value of money is subjective, and relative to how much of it you have – a matter of personal judgment at the individual level, and political judgment at the collective level. When government is willing to give millions in guaranteed profit to giant private contracting companies and yet routinely casts voluntary sector grants as ‘handouts’ we should be in no doubt that their spending decisions are value judgments about their recipients.
Charities today are routinely compared with commercial business or public services. We should apparently be more like one or both of them, less like ourselves. Sometimes comparisons are favourable, sometimes not. More often they are just wholly inappropriate. More than half of England’s 60,000 children’s voluntary groups have no paid members of staff. Nine in ten support families in just one neighbourhood; few aim to expand in turnover or beyond their locality. They offer their communities many of the things in life that Bobby Kennedy referred to as the things that “make life worthwhile”, of which money, GDP, and claims of economic recovery take no account – fun, poetry, pride, sanctuary, solace, voice, confidence, integrity, freedom from loneliness.
How did our sector come to be so defined, and yet so poorly described, by money instead of feelings?
Most people actively involved in the voluntary sector feel it offers them personally, as well as their community, society and economy a kind of value beyond money, usually expressed in terms of their feelings. Yet to quantify what we’ve come to call our ‘added value’ we talk in pounds and pence – the money we raise, the hypothetical paid equivalent of volunteers’ time, the money we might be saving others by helping people in need. How did our sector come to be so defined, and yet so poorly described, by money instead of feelings?
For over 30 years, the competitive public marketplace has set one charity against another, pitted them against private and public competitors, and claimed to offer a level playing field to all, based on ability to deliver more [value] for less [money]. The industry of assessing ‘value for money’ offers the tantalizing fallacy that value is an objective measure, a neutral science that can be applied in spending the nation’s money without such undesirable or untrustworthy things as political ideology or personal judgments. Yet, this idea is itself an import from business and measuring the voluntary sector using the values framework of another has wrought havoc on its ecosystem, even for those uninterested or unable to bid for public contracts.
More risk than value
Looking forward, however, the contracting marketplace is rapidly looking like yesterday’s inadequate answer to tomorrow’s public spending problems. We have already started to see the advent of invitations to tender for public service contracts so underpriced for what’s being asked, so onerous in terms of transferred risk and liabilities, or so complex in terms of payment mechanisms, that nobody – neither voluntary nor private sector – is actually tendering for them. Dangling offers of money, and asking bidders to jump through costly hoops to get it, simply won’t continue to work if bidders feel there is more risk than value in taking the money on offer.
Charities committed to support the state in the delivery of public services would be wise to argue for radically different terms
Voluntary agencies who are asked to subsidise contracts they bid for with their charitable assets, volunteer capacity and donor funds are now seeing some of their best known private sector competitors walk away mid-contract from public service delivery that is proving unprofitable, making clear (if there were any doubt) that they expect to take private profit from other public contracts they win.
So the voluntary sector is being contracted to give, the private sector contracted to take. The level playing field is a sloping pitch. Charities who remain committed in future to offer their resources to support the state in the delivery of public services would be wise to argue for radically different terms, coming to the table as partners and investors in services alongside the public sector, rather than paying to be treated as interchangeable contractors.
(To be continued)
CEO Children England
This essay was first published in the book Making Good: the future of the voluntary sector published by Civil Exchange.
Children England is the national membership organisation for children’s charities in England. It was ‘created, governed and inspired by other charities … to change the world for England’s children by harnessing the energy, ingenuity and expertise of the voluntary organisations that work on their behalf’.