A guide to third sector trading - WCVA

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It’s an idea, but is it business? A guide to third sector trading 1: Getting started 2: First steps 3: Business planning 4: Legal and governance 5: Funding and resourcing 6: Financial controls 7: Managing growth 8: Management and governance 9: Social enterprise 10: Sources of support 9: Social enterprise and support bodies 9.1 Working with the public sector It can be profoundly frustrating for leaders of third sector trading organisations to work closely with local authority partners and other large agencies who appear sympathetic and keen to be supportive, but whose organisations just cannot adapt to their needs. Occasionally it is the front-line officers who fail to understand what they are told by practitioners. But chief officers of charities and community projects often claim it is the bureaucratic inertia of large public bodies which can create the difficulty. This will have to change if community organisations and charities are going to respond effectively to opportunities to tender for public contracts. The need to change the environment The challenge: Among the more serious sources of complaint by third sector enterprises are: • a basic failure to understand what ‘sustainability’ means to social enterprise organisations, how it can be achieved, and the time spans involved – which can mean that, rather than being fostered, community trading is sometimes obstructed and damaged • continuing problems with grant funding arrangements, including massively delayed decisions, failures to meet authorities own objectives for three-year funding cycles, and unclear expectations • lack of commitment to the government’s encouragement for asset transfer and social enterprise management of surplus public buildings. The appeal for public sector support: Public sector appreciation of third sector trading has improved over the past 20 years, particularly in response to Welsh Assembly Government policies. But progress remains slow in some areas. The messages from charities and community organisations is that working relationships are often excellent. But more sensitive responses are needed from the public sector when it comes to the delivery of practical support. This includes appeals to public bodies to: 234
It’s an idea, but is it business? A guide to third sector trading 1: Getting started 2: First steps 3: Business planning 4: Legal and governance 5: Funding and resourcing 6: Financial controls 7: Managing growth 8: Management and governance 9: Social enterprise 10: Sources of support • visit local projects to see what trading projects actually do • take notice of good practice in other authorities and even in other departments within the same authority • be willing to use procurement arrangements to devolve the delivery of services to voluntary organisations in line with the policies of the Welsh Assembly Government and policy guidance of Wales Council for Voluntary Action • create opportunities for them to bid for local authority contracts • allow the same prospects for full cost recovery that are enjoyed by the private sector contracts (rather than the widespread and counter-productive prejudice which denies struggling third sector organisations the opportunity to make a profit) • facilitate the transfer of income-generating assets, particularly redundant buildings, to full third sector ownership so that they can be used to generate wealth and foster independence from grant funding • recognise the necessarily slow pace of change when organisations embark on trading activities, and when they shift from grant dependency to more sustainable business models • understand that: − ‘sustainability’ is not the same as ‘viability’, especially for bodies providing services to disadvantaged people, − unrealistic targets and attempts at micromanagement by some grant funders are more likely to damage business than to improve performance − the claw back of grants from trading enterprises can cause disproportionate damage to their business capacity and confidence • recognise that delaying funding decisions can have a disproportionate effect on the forward planning of trading organisations, delaying essential developments and seriously undermining efforts to improve sustainability • work with organisations affected by funding cuts to minimise the adverse effect, and in particular to free up unnecessary funding restrictions so that trading ventures can use limited grants in the most productive ways 235
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A guide to third sector trading - WCVA

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