24 March 2006

Say goodbye to an effective charity

Well & Wise has a lot going for it. It is a successful charity helping older people in Camden, north London to lead healthier, more active lives. It trains older volunteers and health professionals about healthy living: eating well, keeping active and preventing falls. Its work has a ripple-effect. For every person trained or supported, many older people are influenced, and this not only boosts their quality of life but also saves money for the public services.

New Philanthropy Capital (NPC) featured Well & Wise in Grey matters, its report on growing older in deprived areas and recommends the charity to donors. The Big Lottery Fund believes it is one of the best healthy living centres around. The Department of Health also thinks it is great, having chosen it as a pilot in its preventative health programme.

So why is Well & Wise being forced to close next month?

The demise of Well & Wise has nothing to do with its results. The reason is far more trivial: a cash flow crisis. This was triggered by public sector funders failing to meet their own timescales for applications and unexpectedly changing their application processes. The situation then became impossible as other private funders felt unable to commit to funding given the lack of guaranteed future income.

Funding blunders
NPC frequently sees the effects of funders’ poor practice and processes on charities. For example, 92% of public service delivery by charities is undertaken on contract terms of less than one year. This means that charities often shoulder the risk as well as the burden of reapplying every 12 months. (See Funding success: NPC’s approach to analysing charities. Also: Surer funding, a report on improving government funding of the voluntary sector).

Unhelpful funding practices like these create inefficiency and divert charities’ resources from delivering results to beneficiaries. In some cases, this leads to the destruction of the very organisations that they should be helping to flourish.

The wrong losers
In the commercial world, this is much less likely to happen. Funds can generally be secured, and within sensible timescales, as long as the results are there to attract them. But for charities, the picture is bleak. They must work even harder to survive because it is so difficult, slow and time-consuming for them to access funding. And the most frustrating problem is that generating excellent results is not enough to guarantee survival, let alone growth!

So the story of Well & Wise—which should be about funding success—becomes one about funding failure.

NPC believes that this would not happen if there was a better functioning market for charitable funding. Sure, there would be losers in that market. But they would probably not be effective charities like Well & Wise.

For further information please contact Tris Lumley, on 0207 7856326 or tlumley@philanthropycapital.org

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