Tycoons whip charities into shape

By Alison Swersky
Business reporter, BBC News

Sleeves rolled up, charity boss Neil Cartwright is scrubbing out a fridge freezer.

Community outreach is something small charities aim to provide

It has been donated to the organisation he runs in Grimsby, Community Chest Charity. Once it has been cleaned, it will go - along with a toaster, a hob, a mattress, a chest of drawers and a wardrobe - to a young local couple who have just moved into social housing.

The total cost to them will be an administration charge of £10.

"The girl is seven months pregnant, but they have nothing and they are both sleeping on the floor," he says.

"When I go home tonight, I know there is a bed for me to sleep on, and I won't be able to sleep if I know they are sleeping on the floor in a bare house."

Time, not money

With tiny premises down a sidestreet and a full-time staff of six, Mr Cartwright is constantly competing for the public's attention against the brand muscle of the charitable equivalents of Tesco and Debenhams.

But a new type of charitable giving - that has been slowly gathering pace in London, but is now set to roll out nationwide- could throw him a lifeline.

We were ready to grow, but [Pilotlight] equipped us with better tools Katy Emck, Fine Cell Work

Thanks to this initiative, top-level managers from the giddy heights of commerce are discovering that they can put their planning abilities, experience and mentoring skills at the disposal of charities, rather than simply writing out a cheque.

The scheme is pioneered by Pilotlight, a charity that matches teams of commercial wizards with small voluntary groups.

Goldman Sachs, KPMG, BT, Sainsbury's, BP and Channel 4 are some of the companies whose executives can now sometimes be found in the most deprived areas.

These are often mere walking distance from their offices, where an individual director's salary could keep a community group going for years.

Venture philanthropy

The idea is already well-established in the US, where it has been dubbed venture philanthropy.

Support from local groups is often a lifeline for failed asylum seekers

Could such a scheme help level the playing field in Britain's voluntary sector?

Certainly, the masterminds behind Pilotlight are adamant that charities need to be run on the same lines as any successful business to be sustainable.

It also means a slight risk of culture shock, as the social sector finds itself gradually invaded by industry buzzwords such as "metric-driven targets", "cash-flow models" and "return on investment".

"Coming from the world of fat cats, which is the antithesis of what a charity stands for, I suppose we may be regarded with a bit of suspicion," admits Mark Pullen, a former financial director of food manufacturer Geest.

"But I haven't found it much of an issue."

'Better tools'

Fine Cell Work is one charity that has been very happy to adopt the practices of the commercial world.

It aims to teach prisoners to embroider and then sells their products, providing them with an earned income while in jail and equipping them with an employable skill in preparation for life on the outside.

Fine Cell Work, which counts Virgin Radio and a London hotel group as clients, saw sales shoot up after an 18-month consultation period with the Pilotlight team.

Pilotlight got Fine Cell Work to be more ambitious with its programme

"As the director of a small, under-resourced charity with few colleagues, I am constantly overwhelmed and have to wear many hats," says the charity's director, Katy Emck.

"The donation in hours from highly-skilled business executives and professionals was invaluable to our morale and development, and a service we could not have remotely afforded."

Issues addressed included getting the thread to the prisons in the most cost-efficient manner, a marketing strategy and projections for growth.

"It wasn't like Pilotlight transformed us," Ms Emck says. "We were ready to grow, but they equipped us with better tools."

'Intractable problems'

Every Pilotlight team consists of three or four people drawn from across the whole spectrum of commerce, from banking to law and media, who meet their designated charity for a few hours every few months.

As Pilotlight is itself a charity and relies on donations for funding, members pay a set amount to be involved, so there are two stages of donations: firstly money, then time.

Through this approach, Pilotlight's director, Fiona Halton, estimates that each of the 40 charities it works with annually receives about £72,000 worth of consultancy skills over a 12-month period.

UK CHARITY FACTS Total sector income was £27.7bn in 2004-05, 2.8% up on the previous year 86% of the sector with turnover of £100,000 or less generated less than 7% of total income Every £1 spent fundraising brought in £11.34 in income, up from £9.56 in 2001-02 Source: National Council for Voluntary Organisations' UK Voluntary Sector Almanac 2007

This could involve tackling organisational structure, turning a bold vision into a technical spreadsheet-based operation plan or applying for funding.

"Many local charities are the lifeblood of their communities, picking up a lot of the dirty work that falls below the government radar and struggling with intractable problems, such as homelessness, illiteracy and asylum seekers," Ms Halton says.

"It makes sense to take the business leaders we have and empower social entrepreneurs with the skills to take their organisations to the next level.

"Many of our members have told us that they learn a huge amount from being in a new environment where their status and money don't hold any sway."

'Useful criticism'

Another project, Centre of the Cell, is a £3.9m interactive science centre being developed inside working laboratories at Barts and Queen Mary's School of Medicine and Dentistry, a key part of wider regeneration plans for London's deprived East End.

A Pilotlight team struggled to convince the project leaders that if the fundraising structure was not dramatically changed, it would jeopardise the whole scheme.

Centre of the Cell's official opening is planned for 2008

In the end, they threatened to walk out to get their point across.

"I'm not used to being spoken to like that," laughs the charity's director, Fran Balkwill, professor of cancer biology at the university.

"But it was great to get some useful criticism from business experts, which would never come from our trustees as they are too closely involved."

Sam Berwick, co-chief executive of Japanese bank Mizuho International, has been involved with Pilotlight for about three years.

He is realistic that not every charity he helps will be a success story.

But he insists: "Charities can only survive by investing in infrastructure, but it's much easier to raise money for one dying child in a hospice than [for] a computer for that hospice to keep its records.

"That's our job - to try and help these groups to build capacity, so they can fight that much more convincingly in an increasingly crowded and competitive market."