The structure of federated charities
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- Sharon Lee
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1 The structure of federated charities Analysis of the data from the interviews indicated that the definitions for federations, confederations and unitary structures hide the diversity of the individual organisations which are encompassed by the definitions. One of the clear findings from the interviews was that no two federated structures are the same - they are not homogeneous. The national bodies provide a range of operational and support services, in some cases directly to beneficiaries as well as to the network of local branches. Local branches within a federation might all offer the same services or there might be very little which was similar apart from the logo over the door. Examination of the small sample uncovered the following differences: National Model 1 - national body provides services directly from its national body which are complementary to the services delivered by local branches, for example: NUS, Cats Protection and Samaritans. National Model 2 - national body provides services directly to beneficiaries which compete with some of the services delivered by local branches. They might be viewed as a stand-alone charity, for example: Home-Start UK and Mind. National Model 3 - the national body s prime purpose is to support to the network of local branches. They have moved away from service delivery which is all delivered locally. The national body is generally the sole provider of policy research and provides a national voice to and for its members, for example: YMCA. Local Branch Model 1 - local branches are fairly homogenous - providing very similar services - the national body provides a template for the local branch. In this model local groups often apply to set up a local branch and if successful receive the box with how to set up the local branch, and could in some circumstances be classed as a social franchise. For example: Samaritans and Cats Protection. Local Branch Model 2 - local branches deliver very different services dependent on the needs of the local community - may be counselling services in Ealing and a day centre in Tower Hamlets. Some charities have grown by acquiring independent charities which add into the diverse mix, for example: YMCA and Mind. The models can be fluid with charities deciding to alter existing structures to better address the needs of the beneficiaries. For example, YMCA England has deliberately moved to a model where it has stopped delivering any services which might conflict with their members. D.Fellows, Cass CCE (2012) 1
2 Their prime purpose is to support and represent the one hundred and twenty-one local YMCAs. However, providing support services can be seen as a thankless task. The local branches might not see support from national bodies as adding benefit to the operational aspects that they undertake, viewing the national body as living in an ivory tower and not understanding the beneficiaries. One local treasurer just thinks of the national body as his insurance policy. If things go pear-shaped he can turn to us. Other national bodies provide central support services which are fundamental to the running of the local branches - from national help-lines to bulk purchasing agreements, which save the local branches thousands of pounds. The national body needs to be clear in the activities that it is undertaking and what benefit they are adding to the organisation. They are accountable not only to their board and beneficiaries but also to the local branches for their effective delivery. Home-Start supports almost 77,000 vulnerable children across the UK. Last year, nearly 17,000 volunteers gave a million hours of support to their families. They helped families cope with post-natal illness, isolation, bereavement, disability, domestic violence and much more. Quality is maintained across the country with all 334 Home-Start schemes working to national standards. Local branches There was a recognition that the federated structure allowed the whole organisation to benefit from loyalty at a local level to be able to tap local resources (time and money) and gain an understanding of the local community which would be impossible from a national body or centre. Local branches were felt to be particularly important for volunteers, both in recruitment and in retaining. Volunteers are committed and loyal to their local branch, although there was some difference of opinion as to whether it was the passion to serve beneficiaries or the loyalty to their colleagues which motivated staff and volunteers work long and anti-social hours. Most CEs felt that one of the most important roles they had was to help local leaders to feel part of the federation as well as running their own local organisation. I am the leader of hundreds of other leaders D.Fellows, Cass CCE (2012) 2
3 Leaders need / require skills to run a charitable business in their locality The best (local branch) leaders understand how to work with and lever the (national body) organisation But many expressed concern that local leaders blocked communication or did not YMCA England supports and represents the 121 YMCAs in England helping them transform communities, as well as being a voice for YMCAs and young people on the national stage. By working with YMCAs that understand local issues, the YMCA in England meets the real needs of young people, supporting them in a way which is nationally significant and locally relevant. Each YMCA is an individual, self-governing charity that affiliates to YMCA England. understand their role in the wider organisation. When I was CE of a (local branch) I saw myself as leader, I didn t see the (national body) as leading. I saw them as supporting and co-ordinating work within the (charity) agreement. There seemed little difference between whether the structure was a federation or unitary structure, based on current and previous experiences. The difference between a (unitary) structure with national body and local branches and a federated structure is not huge - whether the branches are more within the structure or without makes little difference. If you are trying to herd cats the legal structure makes little difference in leadership terms. This was substantiated by previous experience of working in a volunteering charity which had moved from a federation to a unitary structure, and recognition that internal structures were unimportant to beneficiaries. Being a (unitary) structure did not make much difference to the feeling of autonomy within the local branches Where you draw the line is a bit esoteric. The public don t care about internal structures they are important for all internal governance reasons, sustainability and so on, but not hugely important in serving beneficiaries. There was an appreciation that much depended on the mind-set of the local leaders and whether they understood the collaborative role that they had to play. One national body CE talked about developing a model of effective leadership collaboration and another of the power of collectivism. D.Fellows, Cass CCE (2012) 3
4 Some get the relationship with (the national body), the loyalists. Others refuse to understand. Depends whether they understand the power of collectivism and co-operation. Can be active players in determining how the (national body) operates. Structures and tools to manage the interface All CEs expressed the view that the federated structure was more complex to lead because there was an additional block of stakeholders (the local branches) which had to be considered. One CE described how a CE is traditionally balancing between internal management and external affairs. If the federation is Cats Protection help more than 235,000 cats and kittens every year through a network of over 260 volunteer-run branches, 29 adoption centres and one homing centre. Cats Protection is governed by a Board of Trustees which, in turn, is advised on its decisions by a Council of appointed representatives of the charity s membership. to be managed properly, the network of local branches is a third, very time-consuming dimension. It is genuinely a very challenging and difficult job, and being CE of a federated charity, it adds an extra dimension, an extra 20% to the job of being CE. Any CE has managing the internal organisation versus being the front face, external stakeholder relations, government relations whatever it might be. The federation is the third dimension for a CE. you are more accountable, you are accountable to more people The indication is that the role of national leader is more complex the more local branches there are. One reason is the increased difficulty in communicating a consistent message across two or three hundred local leaders. One CE commented that another federated charity had only seventeen branches. It s possible for (CE s name) to get all the local CEs in the same room once a month. and went on to describe their annual conference which invited all local branch CEs to a twenty-four hour event and which generally had over a hundred attendees. Each organisation has created or is evolving the structures to co-ordinate and network with local branches which they feel are most appropriate (or in some cases most affordable) using regional director, specialist support teams, sub committees, task groups, conferences and online communications such as intranets. D.Fellows, Cass CCE (2012) 4
5 In some instances a regional structure was seen as too expensive to implement and there were also concerns that the regional officers became poor gatekeepers to the information flow between the national office and the local branches. Specialist support teams, such as a Samaritans provide 24 hours a day confidential emotional support for people who are experiencing feelings of distress, despair or suicidal thoughts. Samaritans central office has a turnover of 12million with 100 staff. The network of 201 local branches are staffed entirely by over 20,000 volunteers. They handle over 2.5 million calls a year. legal hotline, or policy team sitting within the national body were seen as more effective in transferring service knowledge. The CEs talked about the tools that were used to manage, influence and, on occasion, sanction the activities of local branches. These tools included formal signed governance documents: legal contracts of affiliation, membership agreements and local bye-laws. The Charity Commission does not monitor whether a charity is part of a federated structure. One hundred and two charities have standard governing documents for their local branches which have been approved and are listed on the Charity Commission website, see Appendix 4, but this list does not include all federated charities and there are notable exceptions including RSPCA. The list includes all charities interviewed - with the exception of Cats Protection, which, as a unitary structure, does not have independently registered local branches. A number of the charities, such as Cats Protection and Samaritans, post their Memorandum and Articles and bye-laws on their own websites. This is not done by other charities and may be an indication of the difference in transparency within a volunteer organisation. One charity has a standard membership agreement for all local branches but found that the quality framework is the more useful tool. Quality framework reviews are undertaken in local branches by a team of 3 peers: one from the national body; one from another local branch and one beneficiary. The charity had used the right to disaffiliate local branches which were not performing. The majority of the CEs were clear that tools were needed and needed to be seen to be used and that if a local branch was not meeting quality standards then they needed to be disaffiliated. One charity indicated that they had the power to disaffiliate but they had never used this right although they had encouraged a couple of local branches to resign. D.Fellows, Cass CCE (2012) 5
6 Other charities had experienced local branches who had left the federated structure, taking the name (if not protected) or leaving an empty organisation and setting up under another name in competition. Tools such as quality frameworks and bye-laws may provide some comfort that the CE can control behaviour and performance within local branches, but the reality is that these can only be used in some situations, and as a last resort. Influencing and negotiation skills are prerequisite. The final tool recommended was to have a policy to handle disputes, one which uses a peer group from the local branches to adjudicate and using social pressure to respond to the collective common good (Olson, 1965) cited by Young (1992). NUS (National Union of Students) is a voluntary membership organisation which makes a real difference to the lives of students and its member students' unions. They are a confederation of 600 students' unions, amounting to more than 95 per cent of all higher and further education unions in the UK. Through the member students' unions, they represent the interests of more than seven million students. As some organisations are moving toward a more centralised structure, others are celebrating their diversity. They are all moving in the right direction for them. Research from Widmer and Houchin (1999) indicates that bad processes are likely to be more damaging than bad structures and warns that any structure can be made to operate inefficiently by poor processes. The outstanding leadership research indicates that poor relationships will equally undermine good structures and good relationships will support those that are poor. Funding the interface and understanding finance There was a fundamental dichotomy between whether the services provided by the national body should be funded by the local branches or whether the national body was in a stronger position to negotiate with local branches if the funds from local branches were largely immaterial. One charity explained how they had been in a serious financial situation and the future of the national body was at risk. They were not able to sanction the behaviour of the local branches for fear of losing significant affiliation fees. They have now considerably reduced their reliance on affiliation fees and feel considerably more stable and sustainable as a result. They are also able to have a much more equal and productive relationship with their local branches. D.Fellows, Cass CCE (2012) 6
7 One charity spends about 2m a year on supporting their local branches which amounts to some 25% of their unrestricted funding. They receive about 100K in affiliation fees in return. A frustration expressed by CEs of charities is that they were not able to demonstrate the true turnover of their organisation (and therefore the complexity of their role) because the accounts did not reflect the turnover of the federation. This was exacerbated for those with a large number of volunteers as the true value of volunteers is not reflected on SORP. For example, Samaritan s (2012) website states (Volunteers) give us 56 million worth of their time, for free, so that people all over the UK and Ireland have space to talk. Making change The CEs were unanimous in finding the federated structure a hindrance to change. Sir Nick Young from British Red Cross relates the story of taking up the reins of the federated charity (Young, 2012). My Chair told me - if you want to make change quickly - it will take 3 years. If you want to make change very quickly, it will take 10 years. This was accepted and reinforced by all other CE s. The number of stakeholders needing to be involved with making the decision to change was at the heart of the sluggishness. National Mind is a mental health charity. They provide advice and support to empower anyone experiencing a mental health problem. They campaign to improve services, raise awareness and promote understanding. National Mind has a turnover of 29 million with 200 staff. The network of over 160 diverse local Minds provide direct support to almost 250,000 people each year. I cannot work tactically - will take 12 months minimum to make any change - major policy will take at least 3 years. it needs to go through the board and through another approval for (local branches) needs time and commitment, blood, sweat and tears. Don t think you can make changes quickly, because you have 300 opponents out there The process is further slowed as volunteers or local branch managers change on a regular basis, meaning that the whole process of standing and defending the change needs to be continually renewed and repeated. One CE described how an important bill needed to be D.Fellows, Cass CCE (2012) 7
8 voted in by a majority at the national conference and after two year s work had failed by fifteen votes. It had taken another two years to reshape and get through. Astute CE s recognised when they were trying to slay a sacred cow, to change something which was seen as embedded within the culture of the organisation but needed to change for the future health of the organisation. They recognised and planned elaborate communications strategies using the most appropriate voices to help lead the change through their membership. It was generally felt that decisions needed to be pushed through on a majority rather than waiting for a potentially impossible unanimity. However, there were a number of examples of the back lash from this which will be explored more under leadership decision making. D.Fellows, Cass CCE (2012) 8
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