Tuesday 25 October 2016

The sector needs to think like an entrepreneur, but act like a business

Like any investor, the Irish public is looking for return on investment and is demanding more efficiency and transparency from charities, writes Donal Buggy

Donal Buggy

Published 10/07/2016 | 02:30

Dialysis patients who smoke are less likely to get kidney transplant - according to a new study from the University of Limerick
Dialysis patients who smoke are less likely to get kidney transplant - according to a new study from the University of Limerick

Many of the great problems of our time are social problems. Think global poverty, access to housing, the refugee crisis. The enormity of these problems is such that we often cannot imagine a solution. So as a society, whether through public or private donations, we transfer responsibility for developing solutions to charities.

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And charities have delivered. Over the last 20 years the Irish Cancer Society has provided education, awareness and services, and has relentlessly campaigned for action and policies which have seen, for example, the smoking rate in our school-age children drop from almost one in four to less than one in 10.

To put this change into perspective, it means that 10,000 fewer children starting secondary school this September will become smokers, it means that 5,000 of them will not now go on to die prematurely from a smoking related disease, including many cancers. Our funding of high-quality research has underpinned and complemented state investments that now mean well over half of all cancer patients will be cured of their disease.

If we expect our charities to be truly transformative, to develop solutions to the great challenges of our time, we need them to think like an entrepreneur and act like a business.

Entrepreneurs display a disruptive mind-set, an innovation in thinking to challenge the status quo, to develop solutions for problems we do not even know we have. They focus on impact and outcomes. They often start with just a good idea from which a thriving and sustainable venture is created.

Charities can learn from this, investing donations almost like venture capital funding, challenging and changing the status quo with an eye to a sustainable future.

To truly drive delivery of a charity's vision, and develop long-term economic viability within the charity sector, we must apply the same models for success in our charitable organisations as we do in business.

Scaling a charity from an entrepreneurial idea to a sustainable entity requires a professional approach, an investment in good governance, such as publication of externally audited accounts, checks and balances scrutinised by the oversight of an independent board of directors.

It needs to provide reassurance that the investment of donor funds is not just supporting the immediate cause but is being strategically directed to provide solutions to long-term problems.

The Irish Cancer Society processes more than €20m in charitable donations, with tens of thousands of transactions, annually. Appropriately managing and utilising these funds requires professional staff and robust financial systems and procedures. Many of these donations are now electronic requiring investment in technology capable of safely transacting these funds.

Good fundraising practice requires prompt acknowledgement of payments and ongoing reporting as to the use of these funds. Like any business the structures put in place to deliver on good governance allow us to be more efficient and effective. They allow us to apply greater focus to our charitable activities.

Recently we have seen some in our community challenge the proportion of donated funds spent on governance by individual charities. And charitable governance itself does indeed need scrutiny and transparency.

Unfortunately, with Console, we see an extreme case of what a lack of such investment can lead to. So charities have to get this balance right.

Otherwise the sector remains open to challenge and is in danger of being brought into total disrepute. In the absence of any overarching sector regulation, we use company law, principles of best practice and business norms to ensure robust governance.

Charities come in many forms, from not-for-profit entities like St Vincent's Healthcare Group with an annual turnover in the hundreds of millions, to front-room groupings started by a few committed individuals hoping to mobilise action and inspire change. All charities will benefit from appropriate governance and oversight standards.

The Charities Regulatory Authority should be resourced to address the range of needs across all charities. The sector needs to embrace regulation, demand it as a stamp of high standards, a commitment to integrity and accountability.

The Irish Cancer Society is committed to working with our colleagues in the sector to rebuild public confidence in the value we provide for their investment in our work.

Like any investor the Irish public is, very reasonably, looking to understand the return on their money. They are looking for impact and sustainability. Thinking like an entrepreneur and acting like a business will help us achieve this.

Donal Buggy is head of Services & Advocacy, Irish Cancer Society

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