Charities need to use directorsí skills in new ways

Charities must find new ways of using directorsí business skills to avoid wasting their talent.

According to a survey of the UKís top directors, charities are struggling to use the voluntary business skills of directors. This is largely because of ëhand to mouthí funding, lack of project management capacity and the public perception that donations should go to a cause rather than on administration.

The survey was carried out by Directorbank among its register of 2,800 of the UKís top directors in conjunction with Impetus Trust, a charity set up by the private equity industry. Clearly a subject that directors feel strongly about, 500 directors took part in the survey.

Impetus was established by Nat Sloane and Stephen Dawson, chairman of ECI, and is now supported by many leading players in the private equity industry including Sir Ronald Cohen, Guy Hands and Jon Moulton.

More than half of those who responded are actively involved in or sit on the board of charitable trusts. Sixty two per cent of these say that a key motivation was to offer their specialist expertise.

Despite their involvement, directors said that the biggest issues facing charities are financial management (24 per cent), leadership (18 per cent), business acumen (17 per cent) and strategic direction (12 per cent).

Elizabeth Jackson, chief executive of Directorbank ñ Europeís leading provider of directors for private equity backed management buy-outs and buy-ins ñ believes that charities need to re-think how they use the business skills on offer.

She said: ìI am delighted that we had such an extraordinary response from directors for this survey and that so many want to help Impetus. There is a strong sense of frustration among business leaders. They want to help charities but few feel they are making a real difference ñ which is a wasted opportunity for charities. Clearly there are a lot of issues about how directors can make more of a contribution, which needs addressing.î

Over half of the directors surveyed (52 per cent) stated an interest in offering their skills to venture philanthropy charity Impetus. The Trust only invests in charities that have a clear sense of ambition and distinctive strategy and can show how the investment will achieve a significant step change.

Roger Flynn, director of SpringBoard Group and former director of BBC Ventures, is a founder director of Youth Culture Television. Even though he set up this charity, he has found it difficult to use his business skills in such a different environment. He admits that for all his experience and longer range ideas, board meetings often had to revolve around short term funding.

He said: ìBoth the people in charities and the directors helping them need to learn how to use each otherís skills better. Despite the best of intentions, it so often misfires perhaps because of mismatches between beliefs, expectations and understanding about each othersí motives.î

Francis Gugen, former UK chief executive of Amerada Hess and another Directorbank candidate who has sat on the boards of charitable trusts, believes directors have to look at how they are applying their skills to charities and whether they are putting as much effort into influencing and persuading others as they would in their business life.

He said: ìWhen I look in the mirror in the morning, I have to answer the question ëhave I been as useful to this charity as I would have been in one of my businesses?í Which means have I been as disciplined, organised, influential, practical and patient as I would have been in my businesses?î

A national charity that has made significant steps in using the skills of directors is Rathbone, which provides education and training for young people. Their chief executive, Richard Williams, has an education background and recruited specific business skills in both executive directors and trustees to complement his own skills. One of these, Barbara Rimmer, is former director of Focus Wickes Group and one of Directorbankís candidates.

Barbara Rimmer, director of finance at Rathbone, is using her expertise in corporate finance and change management to help the charity refocus and set clear goals. She said: ìWe have agreed a three year strategy and given all directors and trustees specific targets to help us achieve our objectives.

ìAlready this focus means we are seeing higher success rates in helping young people to achieve qualifications.î

Directorbank has agreed a partnership with Impetus to find directors and consultants who can make a step change in the charities the Trust supports. To date these include Naz Project London, life skills provider Keyfund Federation, Leap confronting conflict, Eating Disorders Association, homelessness agency St Giles Trust and Speaking Up, the charity that gives a voice to people with disabilities.

Daniela Barone Soares, chief executive of Impetus, said: ìThis research confirms that there is a huge need for business expertise in charities but it needs to be part of a wider strategy to have real impact. Itís not a big cheque for projects only, but business skills and investment in areas such as IT systems, employees and a focused strategy.

She continued: ìWe believe our disciplined approach to investment in charities, our hands-on support to their management and our evaluation and backing throughout the life of the investment will overcome many of the problems highlighted in this research. And working with directors, through Directorbank, we should be able to make more effective use of their skills.î