The non profit landscape post-Adam Smith
December 2008
In the very first edition of Caritas, I commented on the ‘unprecedented changes’ facing charity executives and governing boards as the sector continues its ‘rapid growth’.
A month later, news of Arts Council funding cuts had greeted 2008 like some sort of Arctic wind and charitable status was propelled up the agenda with the publication of the Charity Commission’s general guidance Charities and Public Benefit in January.
As the year unfolded, those organisations reviewing the external environment grappled with a moving target as the economy contracted. As Tessa Akerman of acevo pointed out last month ‘the impact this recession has on the third sector will be determined by how prepared charities are for leaner times’. Efficiency reviews (
See Pesh Framjee article, In all weathers) are a must, but there are other considerations too.
It was the Scottish economist and political philosopher Adam Smith who argued that although ‘benevolence’ does partly motivate individuals, the majority of their everyday actions are motivated by self-interest and it is self-interest that is the foundation of the economic order. Over 200 years later Robert Peston develops this perspective in his updated analysis of Who Runs Britain (Hodder, 30 October 2008) and gloomily pronounces ‘the habit of philanthropy, lost when the welfare state took on the responsibility for looking after the neediest, has not been reacquired’.
This view could be supported by looking at how the non-profit landscape has rearranged itself in two distinct ways: some organisations seek to prioritise multiplying their own impact with campaign strategies to change government policy; others have become major recipients of government funding.
The ‘what are we here for?’ question underpins what a non-profit organisation is all about and clarity of purpose needs to be evident in all communications. A compelling mission that speaks to an individual in their language can have a remarkable effect on donations. Just look at Barack Obama’s election campaign – some 70m individuals were made to feel they had a personal relationship with him thanks to an astute use of Web 2.0 technology and market analysis (
see also John Baguley article, The generation game). By September, his fundraising campaign had raised $150m, with 75 per cent of it online. With thousands of donations comprising comparatively small amounts of money, everyone felt they owned a small bit of him.
Causes can still inspire new supporters – even in an economic downturn. The enforced antidote to what the popular psychologist Oliver James calls the ‘affluenza virus’ may change individual value sets for the better. As people cut down on ‘having’ and focus on ‘being,’ this could provide an opportunity for charities dependent on voluntary donations to refocus their message to a more receptive and reflective market.
Author: Clarissa Dann
Clarissa Dann was the editor of Caritas as well as an HR and management online service,he People Bulletin until July 2011.
She is now the editor of the specialist trade finance magazine, Trade and Forfaiting Review which can be viewed at www.tfreview.com but does write on charity finance and investment from time to time.
Clarissa has a background in legal and professional publishing, as well as business journalism and holds an MBA from Cass Business School. She has been one of the judges for the non-profit category of the Chartered Institute of Marketing's Excellence in Marketing Awards for the second year running.
She has also acted as clerk to the trustees of a small almshouses charity and as a member nominated trustee to a pension scheme of a multinational publishing company.
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