Scott Kelley: Why convincing the state to increase its charity spend requires a new mindset

State spending has risen significantly during the coronavirus pandemic, yet despite the vital role charities are playing in helping to close many of the public service gaps exacerbated by the crisis, they have largely missed out on the funding boost. Charities Institute Ireland’s COO Scott Kelley examines the issue and what can be done to convince the state to increase its charity spend.

Following a major crisis like a pandemic, it’s to be expected that we will have a bigger state, and more state spending. Certainly, that has been the way for health and education spending, which has hit a record high in Ireland recently.

This level of spending was an inevitable outcome of the Covid 19 pandemic and the Programme for Government which emerged from our General Election of 2020. Both crystalised many of the gaps in our public services – not just in the capacity of our hospitals but across a swath of services like primary care, disability services, mental health, housing, how we support carers, educational disadvantage, and many, many more. And yet, charitable services were largely missing from that funding boost.

Making the case for charities

The crux of the issue is that the role that our charities do and will play in meeting these challenges is still not well understood. The history of most Irish charities – as is the case across much of Europe – is that they were established because the State left gaps in social, housing and health provision, requiring or enabling charities to step up to close the gap.

If governments are serious about committing additional funds to help nations recover from the pandemic, a key question will be how that funding is spent. Will the state take on more and more direct service delivery? Or will it recognise and build on the existing infrastructure and value for money offered by key charities to do more.

As a means of delivering services, there is a strong case to be made that charities have a clear advantage over direct delivery by the public sector. By their nature, charities are often closer to the service users and more in tune with their needs with strong neutral systems for interaction in place.

Besides providing non-partisan or independent advice and help, this proximity to citizens also means charities are innovative and flexible. They can test innovations and ideas in real time. Many services now provided to the most vulnerable in our society originated from innovative “charity” set ups. Organisations who saw a gap in support provided by the state and developed the services to fill that need. Organisations that can offer greater value for money than the public service often can. Organisations that are more agile, who can test and learn quickly, adapt and respond without the red tape or institutional approvals processes to try new methods.

Services initiated by charities have often subsequently scaled-up with state support. Without innovation by charities, many of these services might not exist today. During the pandemic many charities transformed quickly to deliver services online, to be there providing vital services, mental health supports, housing, social services, education and disability supports, and much more.

Charities had to innovate for new funding sources and find new ways to engage its volunteer bases to enhance service delivery, supporting critical employed staff who were equally on the front line in the height of Covid. With strengthened regulation, and high standards of governance continually growing, charities are well placed as experienced, professional and essential components of a vibrant society. So, the state should surely look to reap the benefits of working in alignment with strong and experienced charities.

Overcoming the obstacles

There are obstacles to this, but none are insurmountable. One long recognised constraint, in Ireland at least, is the absence of a sustainable funding model. At present, most charities operate on the basis that last year’s funding will emerge from the annual “estimates dance” that goes on between Government and its agencies and eventually delivers an outcome in November or December. It’s a principle that is completely at odds with commercial practice where budgets are agreed for the year in advance. We need to move to a system of multi-annual funding to enhance strategic planning, and to enable the more efficient and effective allocation of resources to meet need. Too much hangs in the balance. No charity board throws caution to the wind, but more security is needed to really drive impact on key issues being tackled.

Another barrier to enabling charities to deliver more is the absence of an appropriate cost-recovery model for programmes delivered by voluntary organisations, including costs of compliance and relevant governance overhead and administration costs. Where charities are stepping up and providing services under contract or service level agreement for the state, these should be paid for in full, allowing for governance and management costs. These are essential parts of programme delivery. An expectation of compliance with the highest standards of service provision, data protection, safeguarding and accountability but unwillingness to support charities to fund the professionals and systems needed to ensure these standards are met.

The core of every successful organisation

At Charities Institute Ireland, we firmly believe in the importance of these governance and best practice standards, but we also recognise that these require professional systems, administration and ultimately more staff. Charities are tackling significant local, societal and global issues, and short term savings in contracts does not help build robust and resilient organisations.

Full cost recovery and capacity building to help charities retain staff is more conducive in the long run. The core to every successful organisation is the quality of its people. Many charities carry heavy responsibilities to users in terms of the quality of care and the need to provide professional level services. Doing right by our vulnerable, elderly, disabled, marginalised, youngest, and sickest, by all our people requires dedicated and professional staff. And not just at front line defence but at senior and middle management where the strategic innovation and implementation occurs.

No one should be expected to work for significantly less than their value, especially when they are delivering vital services that will otherwise let people fall through the cracks. To seriously tackle major challenges like the growing issues of mental health, health, housing, disease, childhood illness, disability and inclusion, it warrants great people, who are not only committed to join, but encouraged to stay side by side with our communities, public services, and institutions. And who act for us all to make the world a better place every day.

About Scott Kelley

Scott Kelley, Charities Institute Ireland

Scott Kelley was appointed Charities Institute Ireland’s COO at its inception in 2016. In this role, Scott oversees Cii’s operational policies, rules, initiatives, and goals. Scott helps Cii execute long-term and short-term plans and directives by implementing judgment, vision, management, and leadership.

With over twenty years of experience in business operations, strategic development, and sales Scott has a proven track record in stakeholder management, budget forecasting, and event management across multiple sectors in Ireland, Australia and the UK.

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