NFPs Should Not Be Business-Like: UK Expert

UK Not for Profit sector expert, Debra Allcock Tyler has slammed the argument that NFPs should act more like businesses saying it goes against all the reasons that NFPs exist.

Speaking at the Victorian Government’s Think Innovation Summit, Allcock Tyler says she finds it offensive how much is written about how NFPs need to be run better and behave more like the business world.

Debra Allcock Tyler addresses the 2010 Think Innovation Summit

She says the constant comparison between practices in the business and Not for Profit sectors is ironic, as it was the failure of corporate governance and banks that plunged the world into a recession.

Allcock Tyler rejects the notion that businesses are more transparent and accountable than NFPs – she says regulation and legislation, the scrutiny of funders, government and auditing bodies and mandatory reporting procedures mean that organisations are constantly being held to account.

Allcock Tyler says NFPs don’t need to be leaner and meaner, they need to focus on collaborating rather than competition as this is how social change happens.

The new UK Coalition Government is set to rapidly outsource services to Not for Profit organisations as part of Prime Minister, David Cameron’s Big Society policy.

Allcock Tyler says the move to competitive tendering for government contracts creates a view of NFPs as just another delivery vehicle for social services.

She says favouring tenders over grants creates a system where NFPs are forced to behave more ruthlessly like businesses, in a competitive manner.

She says competitive tendering creates a psychological shift about who the client is – with a contract the client is whoever is paying, instead of the grant system, where a NFP determines a solution to a problem and takes it to government for funding.

She says chasing money doesn’t benefit the sector – this means the big organisations get bigger, and the medium and small organisations are left behind.

She says she would rather see a million small organisations better than a thousand big ones.

Allcock Tyler says governments want the sector to speak with one voice – but the sector is full of hundreds of thousands of organisations with very different approaches to solving problems, and these organisations cannot be forced to homogenise.

She says one voice usually means the loudest voice.

Allcock Tyler NFPs aren’t here to win, to beat the competition, to make money or even to exist. They are here to push boundaries and to change the way things are done for the better.

Debra Allcock Tyler is the CEO of the Directory of Social Change, CEO and Director of Guidestar Data Services and Chair of the Small Charities Coalition.