Are You Perpetuating Your Irrelevance?

With several major retailers going under in the last few years, charities should be learning a thing or two about how they do business, writes Community Council for Australia CEO David Crosbie.

“The big challenge to charities is not whether they become more corporate or not, but whether they stay relevant,” Julia Unwin, chair of the Civil Societies Future inquiry in the United Kingdom.    

Some say that to be a good charity manager you need good business skills.  I am not so sure, but I do know charities can learn a few things from business failures, particularly when it come to relevance.

Here is a list to think about: Masters, Dick Smith, Roger David, ToysRus, Angus and Robertson, Esprit, Payless Shoes, Maggie T. Most of us have shopped at one or more of these retailers.  Not anymore. All have recently closed. And others are close to closing, including iconic stores like Myer – currently trading with a share price of 40 cents – less than a tenth what it was ten years ago and over 50% down in the last twelve months.

There is a narrative that ‘the success of Amazon spells the death of retail’.  On-line competition, increasing globalisation of companies and retail outlets, increased competition generally, various forms of digital disruption, changing consumer markets, growing costs and diminishing returns, are all playing a role in destabilising the retail market in Australia.

There is also a more nuanced narrative about the decline in retailing that focuses on the distinction between purchasing and shopping.  When we know what we want to buy, online is often a good way to purchase it. But shopping can be so much more than buying. It is increasingly about the experience, relationships, values.

The first narrative explains the failure of traditional large-scale bricks and mortar stores, but we need to consider the second narrative to understand the growth of new retail outlets and services that are starting to emerge in consumer markets around the world.

The Forbes Oracles writer Ashley Alderson recently attributed her remarkable success as founding CEO of The Boutique Hub to five core principles:

1. It’s all about the experience
2. Social media creates community
3. We do business with people
4. No-one knows your business like you
5. When you find your tribe, don’t compete with them

For most charities, these are important principles to think about.  What is the experience of the communities you serve? What values does that experience demonstrate?  How do you communicate and build community? Are you focused on your business or the people you serve?  Are you focused on competing with others trying to achieve the same outcomes? Why?

These same themes are reflected in the findings of the Civil Society Futures project published in the United Kingdom this week.  The report concludes if civil society is to respond to the massive social challenges of the next decades it must learn to devolve and share power and control, earning public trust by “speaking up to politicians and corporations”. Accountability should be refocused on the people that charities serve rather than putting the government and funders first. “Too often in civil society, size, turnover and short-term measures of impact are seen as the best measures of success. But we have heard loud and clear that real, long-lasting success comes from the depth and breadth of connections with people and communities, and the opportunity for everyone to have power.”  

There is a resonance between the changing face of retail and what it means to be an effective charity.  Both are about emphasising the experience, relationships, values.

The days of relying on an unknown retail customer to walk through the door of a shop, or hoping for a new government contract to underwrite improvements in local communities, are numbered.

As Polley Neate, CEO of Shelter in the UK said recently: “There’s a growing sense in the voluntary sector that the obsession with Westminster and Whitehall (government), and a corporate approach to scale and brand, is not driving the changes we need.  We can’t do it anymore, because it is not working.”

She is right – we know in Australia that the capacity of governments to be transformative has been depleted.

The response from Shelter in the UK has been to commit to employing more community organisers, opening local store fronts for individual advocacy and campaigning stronger on local issues – all to better address their core mission of providing better access to housing in the UK.

In Australia, some of our largest charities have taken on this message and are reforming the way they serve their communities.  We can see it in the commitment of the Australian Conservation Foundation to empower thousands of people in activism to protect our environment.  Their approach is not about growing the organisation or building their brand, but growing a movement.

It is reflected in the work of some of our leading charities that have backed themselves and their capacity to deliver real outcomes through different forms of impact investment and impact bonds.

The stronger engagement of communities and clients is at the core of these initiatives, just as the stronger engagement with potential customers is what is driving the rise of the specialist experience-based retail outlet.

We live in times of accelerating change, declining trust, digital disruption and growing uncertainty.  Within these challenges there are new opportunities for charities to be facilitators of power shifting to our communities, building trust and connection and reshaping the kind of Australia we live in.

As Julia Unwin points out in the Civil Societies Future report; “Civil society has never just stood on the side lines and watched. There is a golden thread throughout our history: civil society renewing, reshaping, reinventing and making a difference.  Neither the market nor the state alone can rethread our social fabric, rebuild our democracy and respond to the challenges of a rapidly changing age. We must be at the heart of it. We must lead the way. But civil society can’t do it in its current form. We must change to be fit for the future.”

Just as the ‘stand and deliver’ retailer with little or no unique value must now redefine itself or fail, charities need to be able to demonstrate engagement, their value and their values.  If charities do not reshape themselves and their relationships with their communities, they will almost certainly perpetuate their future irrelevance.

About the author: David Crosbie is CEO of the Community Council for Australia. He has spent more than 20 years as CEO of significant charities including five years in his current role, four years as CEO of the Mental Health Council of Australia, seven years as CEO of the Alcohol and other Drugs Council of Australia, and seven years as CEO of Odyssey House Victoria.

David Crosbie writes exclusively for Pro Bono News on a fortnightly basis, covering issues of importance to the broader not-for-profit sector.