So, Caroline Mason has been appointed as the new Chief Executive of The Esmée Fairbairn Foundation. I think this is fantastic news for the sector. Let me explain why…
The charity and social enterprise sector is going through something of a crisis at the moment. Income has been falling dramatically and government spending (a promising source of funding for the sector) projected to fall by 20% between 2011 and 2018. At the same time, need in our communities and inequality are increasing. This only magnifies the impact of reduced resources. How can charities and social enterprises increase their impact to meet this growing need? I believe one important way to make this happen is to get more people with impact measurement experience into the most senior roles in the third sector. We need more impact directors, who should have the same level of clout and authority as finance directors and chief financial officers have in the private sector.
As our sector continues to develop and become more sustainable we need to mirror some aspects of the way in which the private sector has developed. Obviously not all of the practices of the private sector make appropriate models- I’m not advocating that we go out and create financial bubbles. However, we should focus on creating a sustainable sector with a focus on a strong business model, collaboration with other organisations and continuous improvement. Effective financial management in the private sector is absolutely vital. The executives of listed companies have a legal obligation to maximise shareholder financial return. As a result financial directors and chief financial officers in private companies have a lot of power and are hugely influential, normally second only to the CEO. So what about the social enterprise sector? Our focus is to maximise social return. In fact, if the organisation we work for has an asset lock then this is also a legal obligation. So where are all the impact directors? There are one or two examples but by and large social impact professionals do not have a seat at the highest table in social enterprises.
In a recent survey by recruitment firm Robert Half, 52% of the FTSE 100 CEOs have a finance background. This is great news for accountants and is completely logical given the focus of private companies on creating maximum shareholder return. What about the impact analysts? I would love to be proven wrong but I don’t know of many social enterprise chief executives who cut their teeth as monitoring and evaluation experts. Wouldn’t it be great if in our sector the people who focused on maximising, measuring and communicating social impact became the chief executives of the future? In the private sector, accountants can clearly progress to become FTSE 100 chief executives.In the social sector, I believe impact analysts and professionals should have the same clear progression routes. I was discussing this very point with the current cohort of OnPurpose associates while delivering a training session on impact measurement in September. These bright individuals will hopefully end up as sector leaders of the future. In an industry focused on impact this career progression route should be not only the expected, but the norm.
This brings me back to Caroline. Her role at Big Society Capital as Chief Operating Officer involved, among many other duties, creating the outcomes matrix through a consortium of sector partners including NPC, Investing for Good and The SROI Network. But this is just the public output of some of her work. Caroline has been focused on the social impact of BSC’s investments on the inside, ensuring they only back the funds which understand impact and are likely to create sustainable positive social change.
This is why Caroline’s appointment as the new Chief Executive of The Esmée Fairbairn Foundation is such an important development for the sector: she will hopefully be the first of many people appointed to high profile chief executive roles who have a background and commitment to focus on the impact of their funding.
Richard has just completed his role as Interim Director of Ventures at The Young Foundation and is now Managing Director of FINCA UK, the inclusive finance charity providing loans and other financial services to low income entrepreneurs in emerging markets.