Who Would Be A Charity Chief?

by Craig Dearden-Phillips 29/06/2016

Five years ago, I was a charity chief executive myself. But after a gutful of HR, sleepless nights and a second-time pregnant spouse, I decided enough was enough, at least until the kids got older.

"Work half the hours and earn twice the money," was my wife's plea, as she saw our family time and bank balance both going south. But this wasn't the only reason I quit. I could see the wheels coming off the sector and urged my board to find a tough-times chief executive to replace me, which they happily did.

So what's the chief executive role like now, five years into what one senior funder recently described as "no longer a recession but a depression"? To find out, I did my own survey of 20 chief executive in my SocialClub network, a diverse group ranging from the chief executives of traditional charities to founder-managers of trendy new digital social ventures. What surprised me was the level of consistency in the responses. The issues appear to be the same, whether you're leading a digital start-up in Cambridge or a family support charity in Leicester.

The ten stand-out findings

1. Happiness (or, rather, "contentment"). Pleasure in the job, despite its challenges is a consistent theme. Although almost all 20 chiefs have occasional sleepless nights (mostly about funding), all enjoy what they do immensely. They relish the autonomy and responsibility of the job, the sense of control. This is consistent with other sectors, where the most senior managers tend to be happier than people in the middle. Overall, a happy bunch.

2. Finance is their biggest worry. More than half cite future income as their main source of lost sleep. Many chief executives are transitioning their businesses away from both grants and statutory income into traded services. This brings uncertainty thanks to the long lead times on new offerings that have little surety of success. "Cash-flow is what keeps me awake at night," says one head of a youth employment charity. Several others say the same thing.

3. It's recession (not depression). All but one of the 20 people I speak to do not share the view that we are in a depression. Most describe the conditions as "recession", despite the fact that we long ago exceeded three months of consecutive decline. Others frame it as neither, simply as a transformed sector, a set of once-in-a-generation "tectonic" changes akin to those seen in the wider economy, such as digitisation and the sharing economy.

4. Acceptance of a permanently changed landscape. Most chief executives seem to concede that we're in a long winter with perhaps no spring at the other end. It's a permanently altered landscape as public trust falters, government income stagnates and a low-growth economy keeps a lid on donations. Nobody is basing their plans on a return to the good times. All are thinking about forms of social business, rather than ramping up donations or grants. One or two are actively exploring social investment, though caution is rife given worries about paying it back.

5. Chief executive pay is about right. All the chief executives I speak to see their pay as acceptable. None feels it should be ramped up. This tends to cut across two contrasting orthodoxies: the Acevo view that top charity salaries lag unacceptably behind other sectors and, of course, the Daily Mail view that charity chief executives should live on the wages of a postman. One chief executive describes it thus: "Big executive reward is counter-cultural to us. I would feel uncomfortable with a six-figure salary."

6. Worry about senior team capabilities. There is a widely perceived gulf in ability and ambition between third sector chief executives and the people around them. A particular concern is a shortage of people in charities with good enough commercial skills. Chief executives sweat over whether (and how) to develop the commercial skills of the senior people they already have, or to take the risk on bringing in new blood, given its scarcity.

7. Chief executives are increasingly commercial business leaders. According to one chief executive, "the job is much more about enterprise than it used to be - I never knew leadership would involve this many spreadsheets". Most charities and social enterprises are building new income streams while turning quite traditional organisations into more agile, devolved businesses. Managing this change is one of the biggest reported challenges.

8. Family time is under pressure. "My husband hates my job," says one. Nearly all the chief executives say the job impinges negatively on time with family and headspace for other pursuits. A personal hinterland beyond the job is something most of our chiefs don't get time for.

9. The job is getting harder. Most chief executives believe the job has become tougher in the past three years. The source of this, for many, is the need to sort out the legacy of a high cost-base, outdated offer and culture, while pushing hard on the new.

10. It's lonely at the top. Most chief executives report an element of loneliness, which many mitigate with a "personal boardroom" of allies, mentors, friends and fellow chief executives. The chief executive feels a unique kind of responsibility that is inherently isolating and isn't always addressed by having a decent chair. "This is why networks become important," says one.

More demanding

What are we to make of these admittedly unscientific findings? Perhaps the key observation here is that the task of leadership in the third sector has become more demanding over time. The chief executive of 20 years ago ran a type of organisation quite distinct on all levels from other sectors, but her equivalent today runs a more "hybridised" organisation that borrows heavily from both the private and the public sectors.

So today's charity chief executive follows not only a form of managerialism borrowed largely from the private sector, but also, increasingly, a more intensive degree of commercialism. Charities have always been businesses, but there has been a marked shift in emphasis in the past few years as chief executives have opened up all sorts of partnerships with the private sector, entered new business ventures and added large trading subsidiaries to their core operations. I see this in my work at Cass Business School, where I teach social business to ambitious third sector managers. These guys know what the future looks like.

Another dimension of "hybridity" is the enlarged interface with the public sector. The chief executives of today run billions of pounds of public services, from probation teams to libraries. Tens of thousands of former public sector staff are now part of the third sector, whether in housing associations, public service mutuals or traditional charities.

For chief executives, this introduces a new set of demands. They need to build teams that can deal effectively with the weird and wonderful variety of public sector commissioners. On top of this, they have to manage the risks that come with statutory responsibilities plus the more nebulous risks around the Tupe Regulations, culture-change, pensions and reputation that are part of the baggage of working with the public sector.

Interestingly, today's chief executive, from the small sample I spoke to, seem to have sucked this all up. Tellingly, most have been chief executives for less than five years. Few were leading during the sunshine years and know only hard times.

This brings the story back to where I started. Managing growth was my era. A decade ago, central government was spending money like it was going out of fashion. Philanthropy was hitting new highs as the City was going gangbusters. Then, in 2010, the music suddenly, sickeningly stopped. I for one wasn't suited to the new times: I could manage growth, but not complexity.

Since then a whole generation of chief executives have quietly left the scene. By contrast, this new generation knows nothing but hard times. Austerity and its hard choices are their normal.

And for this reason, they are pretty happy with their lot.

Craig Dearden-Phillips is founder of SocialClub, a business club for third sector leaders and founders

As published in Third Sector Magazine -

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