si magazine autumn 2014

social, strategic and sustainable investment and innovation ISSUE 6 // OCTOBER 2014

InterviewRobin McAlpine,Jimmy Ried Foundation

Funding We talk to

Alastair Davis of SIS

Funding Celia Tennant tells us about

the work of Inspiring Scotland

Leading by ExampleWe look at the work of The Peek Project

The No voteWhat does it mean for your business and employees in the short term?

InnovationMorton Fraser is an

outstanding and innovative UK law firm. We work with

businesses, the public sector and non-profit organisations,

and we act for individuals and families.

Edinburgh Quartermile Two 2 Lister Square Edinburgh EH3 9GLTel: 0131 247 1000 Fax: 0131 247 1007

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Tel: 0141 274 1100 Fax: 0141 274 1129

London St Martin’s House 16 St Martin’s le Grand London EC1A 4ENTel: 020 7397 8621 Fax: 020 7397 8400 www.morton-fraser.com

Outstanding Lawyers

Business division of: Ecclesiastical Insurance Offi ce plc. Registered Offi ce: Beaufort House, Brunswick Road, Gloucester GL1 1JZ. Registered No. 24869 England All content © Ecclesiastical Insurance Offi ce plc 2013 Member of: Association of British Insurers, Financial Ombudsman Service. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

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2 Quarterly Roundup

4 Lead Feature Following on from Scotland’s no vote and with uncertainty as to what, if any, significantorpositivechangeisonthewayPwCtelluswhatyourbusiness needs to know in the short term

6 Cover Interview WetalktoRobinMcAlpineoftheJimmyReidFoundation

10 Funding AlastairDavistalkstousabouttheworkofSocialInvestmentScotland CeliaTennantgivesusaninsightintoInspiringScotland

18 Leading by Example TheChurchofScotland’sPEEKprojectshowsushowitishelpingchildrenin Glasgow’sEastEnd

23 Service Directory

24 Balancing the Books ElizabethRobertsonofMortonFrasertacklesthedifficultissueofexecutivepay

26 Annual report directory * all interviews were carried out prior to the referendum.

SUPPORTING PARTNERS:

page 14 page 18

SImagazineOctober 2014

PUBLISHED BY:

Published by Spectrum Solutions

Publisher Andy Crielly [email protected]

Registered office Spectrum Outsourced Solutions Ltd, Catchpell House, Carpet Lane, Edinburgh, EH6 6SP

Editorial Contential Pete Swift [email protected]

Editorial steering panel Social Enterprise Scotland, Scottish Community Foundation, SCFDG, ACOSVO, Scottish Financial Enterprise, Inspiring Scotland.

Advertising Lesley Fraser [email protected]

Graphic design TMC Graphics www.tmcgraphics.com

The views expressed in SI magazine are those of invited contributors and not necessarily those of Spectrum Solutions. Spectrum Solutions does not endorse any goods or services advertised or any claims or representations made in any advertisement in SI magagazine, and accepts no liability to any person for loss or damage suffered asa consequence of their responding to, or reliance on, any claim or representation made in advertisements appearing in SI magazine. By responding or placing reliance, readers accept that they do so at their own risk.

©2012 Spectrum Solutions. Reproduction in whole or part is forbidden without the written consent of the publisher.

www.simagazine.co.ukSI magazine is a quarterly digital publication designed to bring together original content which affects business within the third sector at a strategic level such as grant and loan funding, partnerships, social enterprise and efficiencies.

IN THIS ISSUE

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Welcome to the AutumnEditionofSIMagazineItissafetosayScotlandhashadahecticfewmonths,playinghosttotheCommonwealthGames,theRyderCupandtheIndependenceReferendum.AgainstthisexcitingbackdropSIhasbeenspeakingtokeyfigures,gaugingthereactiononthegroundanddiscussingprogressanddevelopmentinScotland’sThirdSector.

Thisissuetakesalookattheincreasingappetiteforenterpriseacross the sector, featuring discussionswithCeliaTennantfromInspiringScotlandandAlastairDavisfromSocialInvestmentScotland.Atatimewhenbudgetsare stretched and funding is limited, weexplorehowanenterprisingapproachcanhelporganisationstocreateopportunitiesandmaximisesocialimpact.

Whilethereareconflictingviewson the referendum outcome, there isabroadconsensusthatthedebatehasengagedpeopleonascalerarelyseeninrecentpoliticalhistory.Whilethedebatewasultimately hinged on the question of‘in’or‘out’,italsoinspiredpeopletoconsiderwhatwasmostfundamentallyimportanttothemascitizens.

ThissummertheJimmyReidFoundationreleasedtheirCommonWealpublication,abookwhichexploresanalternatevisionforScotlandbasedonaNordicstylesocialmodel.InthiseditionSIspeakstoRobinMcAlpine,DirectoroftheReidFoundationabouttheCommonWealmovementandaskshowtheThirdSectorcanhaveagreaterimpactonthelegislativeprocessgoingforward.

Welcome! Quarterly RoundupSI

Commonwealth GamesTheCommonwealthgameswereoneofthehighlightsofthesummerformany,withsuccessbothonandoffthepodium.TeamScotlandachieveditslargestmedalhauleverwithanimpressive53medals,19ofwhichweregold,landingafourthplacefinishonthemedalstable.Keentoleavealegacywhichtranscendedsport,theeventwasalsousedtofocusthespotlightoncharity;over£5mwasraisedforUniceffollowingaworld–wideappealduringtheopeningceremony.

Ice bucket challengeTheIceBucketChallengeexplodedinpopularityoverrecentmonths,withpeoplenominatingoneanothertodumpabucketoficewateroverthemselvesforcharity.Whilethelengthyprocessionofnominationsprovidedmanyhoursofentertainmentonsocialmedia,therehasalsobeenmassivedonationstotheleadcharityassociatedwiththescheme,withtheALSAssociationreportedtohavereceived$98.2mfrom29Julyto28August.

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Water rates exemption for small charitiesTheScottishGovernmenthaveannouncedthatcharitiesearninglessthan£200,000willgainexemptionfromwaterandseweragecharges.Therewillalsobeconcessionsfororganisationswithanincomeof£200k-300kwhowillreceivea50%discountonrates.ThechangeswilltakeeffectfromApril2015.

Parliament evidence session on social enterpriseAroundtableevidencesessionwasheldtodiscussthestateofthesocialenterprisesectorinScotland.ThesessionwasheldbytheEconomy,EnergyandTourismCommitteeandinvitedparticipantstohighlightareaswhichmightrequireareviewofpolicyorpracticefromTheScottishGovernment.Followingthesession,thecommitteepassedthesecommentsontoFergusEwingMSP,MinisterforEnergy,EnterpriseandTourism.

Thepointsraisedincluded:• Supportforadiverseandactivesocialinvestmentmarketplace• Anenhancedroleforsocialenterprisenetworks• Increasedsupportforsocialenterprisestart-ups• Investmentintheroleofboardsintermsofleadershipandleadershipdevelopment• Supportavailabletosocialenterprisesfromtheenterprisenetworks• Publicprocurementprocedureswhichprovideopportunitiesforsocialenterprisesto

tender successfully• Specificsupportforfemalesocialentrepreneurs• Longer-termgrantfundingtoactasacatalystforinvestment

New legislation designed to help social enterprises and SME’sTheProcurementReformScotlandAct(2014)hasnowreceivedRoyalAssent.Theactintroducesageneralobligationforcontractingauthoritiestouseprocurementto“improvetheeconomic,social,andenvironmentalwellbeingoftheauthority’sarea,facilitatetheinvolvementofsmallandmediumenterprises,thirdsectorbodiesandsupportedbusinessesintheprocess”.Overrecentyearsthesizeofmanypubliccontractshasprohibitedsmallorganisationsfrombiddingforworkandhasthereforeexcludedmanycharitiesandsocialenterprisesfrombenefitingfromlocalprocurementspend.Itishopedthenewlegislationwillhelptheseorganisationstotenderforpubliccontractsandbenefitfromthe£9Billionspentannuallyonpublicprocurement.

POLICY NEWS

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Whilethereferendummaybeover,thedebateastothefuturedirectionofScotlandcontinues.OverthepasteighteenmonthsPwChasbeenengagingandworkingwithmanyorganisationsontheimplicationsofbothindependenceanddevolution,developinganunderstandingoftheissuesandtheirpotentialimpacts.ThisworkinvolvedexaminingthepotentialscenariosshouldScotlandremainpartoftheUK,butgaingreaterdevolutionandenhancedpowerstosetanddeliverfiscalpolicy. TheScotlandAct2012willcontinueitsprocessofimplementation,incorporatinganyamendmentsthatmayflowfromfurtherdevolvedpowers.TheScotlandAct2012itselfisthebiggestevertransferoffiscal

LEAD FEATURE

powerstoScotlandwithmeasuressuchasanewLandandBuildingsTransactionTaxandScottishLandfillTaxbeingintroducedfromApril2015andtheScottishRateofIncomeTaxbeingimplementedfromApril2016.ThesechangeswillhaveamajorimpactonallemployersandemployeesinScotland, including organisations within the SocialEnterprisesector,andthroughouttheUK. Inaddition,thethreemainUKpoliticalpartieshavecommittedtoafurtherpackageofmeasures,includingfurthertax-varyingpowers,controloverincometax,elementsofwelfareandbenefitspolicy.Theyjointlypledgedon16Septembertodeliver‘extensivepowers’totheScottish

Parliamentand,togetherwiththeSNPandScottishGreenparty,theyhavenowmadetheirsubmissionstotheSmithCommission,which is tasked with reaching Heads of Agreementonthedevolutionoffurtherpowersby30thNovemberwithaviewtohavingdraftlegislationinplacebytheendJanuary2015.

Akeyimplicationforthesocialenterprisesector,asforanyemployeeoremployer,willbetheintroductionoftheScottishrateofincometax.

Scotland has voted No

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How will the changes expected from April 2016 impact my employees?Broadly,anindividualwillbecomeaScottishtaxpayerfromApril2016iftheyareresidentintheUKforincometaxpurposesandmeetoneoftheconditionsbelow:

• TheyhaveacloseconnectionwithScotlandbasedonthelocationoftheirsoleormainplaceofresidence.

• TheyspendmoredaysinScotlandthaninanyotherpartoftheUK.

MSP’s,MP’srepresentingaScottishConstituency,andMEP’srepresentingScotlandwillautomaticallybetreatedasScottishtaxpayers.

How will HMRC determine if an employee is a Scottish taxpayer?HMRCwillbewritingtoindividualswhoappeartobeScottishtaxpayersbasedoninformationheldontheircomputersystem,initiallydeterminedbytheirregisteredhomeaddress.MoredetailedguidancewillbepublishedpriortotheintroductionoftheScottishRateofIncomeTax(‘SRIT’)toassistemployeestoidentifytheirmainplaceofresidence.

Thelegislationconfirmsthata‘place’includesaplaceonboardavesselorothermeansoftransport.Moredetailedguidancewillthereforeberequiredtoassistemployersandemployees,notablythoseintheoilandgasandtransportsectors,todeterminewhichpartoftheUKthoseplacesaredeemedtobelocated(forexample,avesseloperatinginUKwaters).WhatrateoftaxwillaScottishtaxpayerpay?

AlthoughtherearenofixedScottishtaxrates at the moment, we do know that the currentUKtaxrates(20%,40%and45%)willbereducedby10%andtheScottishParliamentwillsetanewSRIT.Forexample,iftheSRITis9%,thentheScottishtaxrateswillbe19%,39%and44%.

WealsoknowthattherewillbenochangetoincometaxallowanceswhichwillcontinuetobedeterminedbytheUKGovernment.

Asdiscussedbelow,changestotheseprovisionsmayariseiffurtherfiscaldevolution goes ahead.

What income will be subject to Scottish tax?

Non-savingsincomesuchasemploymentincome,profitsfromself-employment,pensionandpropertyincomewillbesubjecttoScottishincometax.

Savings and dividend income, together with capitalgains,willcontinuetobesubjecttotaxattheappropriateUKtaxrates.IncomefrompropertylocatedintheUKreceivedbyaScottishtaxpayerwillbesubjecttoSRITregardlessofwherethepropertyissituated.

How will the Scottish rate affect tax on pension contributions?Scottishtaxpayerswillcontinuetoreceivetaxreliefontheirpensioncontributions.FortheperiodbetweenApril2016andApril2018,currentplansareforschemeadministratorstocontinuetooperatereliefatsourceasnormali.e.usingUKrates,onthebasisthatHMRCwillidentifyScottishtaxpayersandmakeanynecessaryadjustmentsdirectlythroughself-assessmentorPAYEcoding.After2018,thepensionschemewillclaimtaxreliefattheScottishrateofincometax.

How will the Scottish tax rate affect tax on pension income?Pensionincome(i.e.annuities)willbetreatedthesameasincomefromemployment.IfanemployeeisaScottishtaxpayer,theywillpaytaxontheirpensionincomeattheScottishratesofincometax.

Although there are no fixed Scottish Tax rates at the moment, we do know that the current UK tax rates will be reduced by 10% and the Scottish Parliament will set the new SRIT.

These changes will have a major impact on all employers and employees in Scotland, including organisations within the social enterprise sector, and throughout the UK.


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InequalityisagrowingproblemintheUK:recentreportsfromTheScottishGovernment,TrussellTrust,OxfamandTheHighPayCentrehavehighlightedanincreaseinthenumberofchildreninpoverty,anincreaseonrelianceonfoodbanksandanincreaseinthepaygulfbetweenthehighestandlowestearningworkers.

Averagewageshavereducedinrealtermsoverthelast5years,whilethecostoffoodandenergyhaveincreased.Benefitshavealsoseenamarkedreduction,leavingmanypeoplewithsqueezedbudgetsandsomeofthemostvulnerablepushedintopoverty.DespiteclaimsbytheCoalitionthattheeconomicrecoveryplanhasbeenasuccess,manyofScotland’spoorestpeoplecontinuetostrugglewiththebasiccostofliving.

Thedisparitybetweentherichestandthepoorestinourcommunitieswasakeyareaofcontentionformanypeopleinvolvedintheindependencedebate.Whilediscussionwasalltoooftenconcernedwithcurrencymandatesandoilrevenues,therewasalsoalotofdebate,particularlyatagrassrootslevel,whichwascentredoncreatingafairernation.

ThissummertheJimmyReidFoundationreleasedaCommonWealpublication;thiswasdesignedasa‘startingpointfordiscussion’andexploresanalternatevisionforthetransformationofScotlandbasedonaNordicstylesocialmodel.SIspokewiththeDirectoroftheReidFoundation,RobinMcAlpineaboutthedevelopmentoftheCommonWealmovementandtheirvisionforafairersociety.

The Common Weal Project

INTERVIEW

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Who was involved in the development of the Common Weal project?TheprojectwasinitiatedbytheJimmyReidFoundationbutgrewtoinvolveawiderangeofcontributorsincluding:academics,economists,writers,campaignersandmembersofthepublic.

Thecontenthasbeenalmostwhollyproducedexternally,soanacademiccameforwardandsaid“Iwanttowriteonenergy”oragroupofcampaignerscameforwardandsaid“Iwanttowriteaboutthefutureofcreditunions”.Ourjobwastotakeit,shapeitandputitinastructuredpublication.

Weweresimplyknockedbackbythelevelofinterestwereceived;theReidFoundationhadinitiallyplannedtohave6papers,butthisquicklygrewinto50papersandwe’vereallyhadtosaythatwejustcouldn’tacceptanymoregivenourresources.Butit’sbrillianttoknowthatthereisthatlevelofinterestandexpertiseinScotland.Wereallydo have great human resources.

What was the thinking behind the establishment of the common weal project ?WewantedtoprovideaspaceforpeopletocontributetothediscussiononwhatthefutureofScotlandcouldbe.WehadbeenworkingonapaperwhichexaminedtheNordicmodel,specificallythepotentialforScotlandtomakeatransitiontoaNordicstylesociety.Theideawastotakethisconceptandaskhowwewouldreallylikesocietytobe.

What’smadetheprojectpossibleisadesirebornefromtheopportunitytotalkaboutadifferentfuture.Theissuehasbeenopenedwidebythereferendum,andwewantedtoencouragepeopletomovefromneutralitytopluralityandcontributetothediscussion.Neutralitysoundsfartoomuchlike‘wedon’tknow’.Bettertoallowabalanceofdifferentargumentsfromone

sectorthantodonothingmorethanposequestions.Ithinkneutralityhasprobablydoneharmbecauseorganisationshavechosentostandback,andIunderstandthereasonsandthepressuresforthis,butithasdetractedfromthedebate.Weneededamoreparticipatorydiscussionandthatiswhatwehopedtoprovideaspacefor.

What does the alternative vision for Scotland look like, how would it influence society?We have lived throughout my entire life with fourorfiveflavoursofthesamepoliticalphilosophywhichispredicatedontheideaofconflict.Thatsameneo-liberalphilosophydominatesabsolutelyeveryaspectofpoliticsinBritain.Createawarofallagainstallandbackthewinners.Itismadness.

Thealternativevisionisbasedonmutualism;tocreatethecircumstanceswhichallowthelargestpossiblenumberofpeopletosucceed.Andwe’renottalkingaboutblanketequalityorestablishing

communismoranythinglikethat,butnorarewesayingbigsupermarketsarethestrongestmodelsolet’sallowthemtokeepshutting down our high streets. We need to findawayofallowingbothtosucceed-andthrough mutualism all of us can thrive.

What affect would you expect a Common Weal vision to have on Scotland’s Third Sector and the people they serve?TheThirdSectorissolargeanddiversethat it isn’t easy to give a single answer tothat.IfwereallydidcreatesomethingthatlookslikeaNordic-styleeconomyandsocietythentherereallywon’tbetheneedforsomeoftheemergencypovertyrelief services from the third sector and in timetherewouldprobablybelessneedforsomeofwhatmightbecalledtheremedialorganisationsaseverythingfromdiabetestochildabuseoughttodecline.


Pete Swift talks to Robin McAlpine, Director, Jimmy Reid Foundation

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Ontheotherhand,theNordicmodelisheavilybasedaroundmuchmoreself-organisation,muchmorecommunity-levelactivity and much less centralised control. Theideathatpeopleshouldbeactiveandtake much more control of their community andsociety,theideaofrealparticipationandrealparticipatorydemocracyandthehopeforfloweringincivicandcreativeactivity is a real vision for a future for the thirdsector.I’veheardpeopletalkingaboutthethirdsectorasa‘stickingplaster’whichisusedtopatchovertheproblemsinsociety.Thatsurelycan’tbethewayforward.

The publication states that common weal politics are for everyone, how will you engage with people that are apathetic and disillusioned with politics? Everybodyisinterestedinpolitics-whethertheyknowitornot.Theymaynotbeinterestedinpartypoliticsorparliamentarypolitics,butthey’reinterestedintheprocessin how the society in which they live is run.

Idon’tthinkthequestioniswhenarewegoingtoengagepeople,Ithinkitiswhenarewegoingtostoppushingthemaway.Ifyoulookatthecomplexityofpolicydocumentsandthewaywerunpolitics,itmightaswell

INTERVIEW

bewritteninLatinforallthesenseitmakestoalayperson.We’vegota17thcenturypoliticalsystemina21stcenturyworldandthat’stheproblembecauseourcurrentmodelofpoliticsisdesignedtoexclude.

We’ve got to have a great reforming moment, startspeakinginsimplelanguage,havingmechanismswherepeoplecanreallyinfluencepolicy,ratherthanwhicheverlobbyisthasthemostcash.Ifyouwantpeopletocareaboutpoliticsthengivethemapoliticstheycancareabout.

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We’ve got to have a great reforming moment, start speaking in simple language, having mechanisms where people really influence policy, rather than whichever lobbyist has the most cash.


You mentioned the influence of lobbying and wealth on the political system; how do you propose to counter this adverse influence to enable the transition to a more equal society?Quitesimply,weneedtobebetter.Peoplehavetobebetteraboutengagingandinfluencing.IfirstpointedthisoutwhenIwasinthevoluntarysector;Ihighlightedthatwithexceptionsweweregenerallyprettybadatthestraightforwardpracticesofpoliticalinfluence-wedidn’tdoitallthatwell.Ifwewanttokeeppace,wehavetodothestuffthatgoodlobbyistsdo,creatingtheright environment, evidencing arguments

properly,producinggooddata.Weneedreal engagement and effective media communication so that we are actually puttingourpointforwardproperly.Effectiveinfluencedoesn’tjusttryandgetindividualdecisionsmadeinyourfavourbuttriestochange the environment so that you have a betterchanceofwinningeverytime.

PeopleacrosstheThirdSectoraresometimesnotgoodatthisbecausetheyseem scared of taking risks and they’re scaredofpullingstunts,sotheyareeffectively scared of the most effective tactics.Ialwayssaythatifyoukeeplosingthenlooktoyouropponentsandtryandwork out why they are winning.

How can the Third Sector have a greater voice and a greater influence on policy and politics?AlotofcivicScotlandisnotverygoodatgeneratinggoodinterestandpublicity.TheaveragecharityinScotland–andsomearebetterthanothers-buttheaveragecharity in Scotland hasn’t really managed to get their message across in a way that fundamentallychangespublicperception.

Ifyoulookatthebusinesslobby,theyhavemanagedtoturn‘capitalists’into‘wealthcreators’andthereisnowanexpectationthatsocietyshouldbegratefulforthem.Theydidthisinthespaceofabout15yearsbycreatingthenecessarylanguage,andtheychangedtheperceptionbecausetheydidwhatworks.Thisdoesnotmeanthatweallhavetoturnintocorporatelobbyists,butwehavetolearnthelessonsofcorporatelobbyingandPR.

TaketheReidFoundationforexample;wegetinthemediaalotbecauseweknowwhatthepracticesare.It’saboutknowinghowto construct stories for the media in a way that creates interest and makes it worth writingabout.There’snotjustonemodel,butthere’sskillsandpracticesthatworkandyou’ve got to use them.

There has been a lot of coverage on the Common Weal following the publication and the recent festival. Did you think the project would reach this scale and generate so much interest?What’shappeningnowiscompletelybeyondmyexpectation,Ineverthoughtthiswaspossible.WhenwefirstdiscussedourambitionsfortheprojectIexpectedthatwewoulddogoodworkbutprobablyfailtoreally set an agenda in the timescales we had…butsometimesit’slovelybeingwrong.It’sbeenanabsolutehonourtobepartofit.

youcanfindfurtherinformationat

www.allofusfirst.org

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AspublicsectorbudgetsacrosstheUKhavetightened,theamountofpublicfundingavailabletoThirdSectororganisationshasdiminished.Additionally,withbanksimplementingmorestringentlendingrequirements,manyorganisationshaveexperienceddifficultygainingfinancefromtraditionallendingsources.Thislackofavailablecapitalhasnecessitatedthecreationofnewmodelsoffinancingforsocialbusinessesandcharities.

SocialInvestmentScotlandisasocialenterprisethatworkstoaddressthisissuebyprovidingloanfinancingtocharitiesandsocialenterprises.SIspokewithAlastairDavis,ChiefExecutiveofSIStodiscussthevitalroleoftheorganisationandthegrowingpopularityofsocial investment.

FUNDING

Alistair Davis, SIS

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What is the primary role of SIS within the sector?SISprovideloanfinanceandotherrepayableinvestmenttocharitiesandsocialenterprises,particularlywherethereisagapandorganisationsareunabletoaccess money from either a grant funder or alternativelendersuchasabank.

Ourcentralroleistoconnectcapitalwithcommunitiestodriverealmeasurableimprovement.Therearetwodifferentfunctionswithinthis,onebeingtoconnectorganisationstosocialinvestmentbyhelpingthemtoattractfunding.Thesecondfunctionistoprovidethisactioninreverse,byactingasanintermediaryandgivinginvestors a route into the social investment market.

How has the organisation changed & evolved since its initial conception in 2001?Theorganisationhaschangedquitedramatically,althoughthecorepurposeandmission of the organisation is still the same. In2001socialinvestmentwasaverynewconceptandconsequentlytheactivityofSISwaslowintermsofloansmadeperyear.Muchofoureffortsweredirectedtopolicyworkandoutreachinpromotingsocialinvestmentasaconcept.

Since2009,activityhasacceleratedintermsofthenumberofloansissued,withthe volume of investments more than doublinginthelast4years.InthepasttherehasbeenalotofscepticismaboutsocialinvestmentandSIS,whereaspeoplenowlooktoSISasbeingamajorfunderon the Scottish scene and someone that hasstartedtoplayaleadershiproleinthedevelopmentofthemarket.

The scepticism you mentioned, was that relating to whether social investment was viable as a concept or whether it would be lucrative for investors?Intheinitialdaysitismyunderstandingthat social investment was seen as a nice ideabutwasultimatelyconsideredasafad that would never last. Whilst some of thisscepticismdoesremain,organisationsnowacceptsocialinvestmentaspartofthefundinglandscape,whereastheywouldhaveresistedthat10yearsago.Thatsaid,westillhavearoletoplayinhelpingorganisations understand some of the morecomplexsocialinvestmenttoolsandlanguage,suchassocialimpactbondsandtheconceptofriskcapital.

SIS has investment from some of the UKs largest banks; do these investors receive above inflation returns on their investment in the same way they would if they invested elsewhere in the marketplace?OurcorporateinvestorsdoreceiveaninterestratefromSISandarealsoabletoclaimanadditionalamountbackthroughaCommunityInvestmentTaxRelief.Thisrelief is equivalent to their investment and increasestheirreturntoapproximately6or7%.

Has the willingness for enterprises to embrace social investment been born out of necessity due to the diminishing availability of funds from banks and traditional lenders?Thebankingmarketatthemomentisundoubtedlynotoperatingatthelevelsofthepastandmayneverreturntothoselevels,whichcreatesopportunitiesforsocialinvestors.Changesinthewiderlandscape,particularlyinpublicsectorspendingpatternshavealsomeantthatsocialinvestmenthasbecomesomething

organisationshavehadtoconsider.Andyouwould think that is something which is only goingtocontinueaspublicsectorspendingcontinues to change.

Last September SIS launched a five year ‘Framework for Growth’ strategy, what is the main focus of this strategy?ThemainfocusisincreasingtheamountofinvestmentthatSISholdsandinturnincreasing the amount of investment that weareabletomakeintocharitiesandsocialenterprises.We’renotattractinginvestment for the sake of it, it has to beinawaythatisrelevantandmatchestheneedsoforganisations.Afterall,aninvestmentwon’tmakeanysocialimpactifitjustsitsinourbankaccount.

What work will the recent funding from Big Society Capital & Scottish Government enable?OnonehanditenablesgrowthinthemarketplaceandcatersfortheincreasingdemandforSIScapital.But70%ofthefundisforanewriskcapitalproduct.Alltheresearch from the social investment market placesaysthatwhatorganisationsneedtoallowthemtogrowisriskcapital,andthenewinvestmenthasallowedustodevelopaproductspecificallyfortheScottishmarketplace.Italsoallowsustoofferloansofupto£1mforthefirsttime.

How does the process of taking a loan from SIS differ from lending from a bank?Ourapproachisamoreengagedoneandsimilartotheoldfashionedapproachofrelationshipbanking,sowehavenoapplicationformsandwewouldgoandmeetwithpeoplefacetoface–regardlessof the amount of money that an organisation islookingtoborrow.Wealsoworkwithorganisations from a very early stage, and eventosignpostthemtoothersourcesof


Pete Swift talks to Alastair Davis, Chief Executive, Social Investment Scotland

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financewheresocialinvestmentwouldnotbeappropriateforthem.Idoubtthisissomethingthemainstreambankswoulddo.We continue to engage with the organisation fortheentirelifespanoftheloanonaregularbasis.Wecanalsobeflexiblewithorganisationsthatmighthavedifficultymakingpaymentsandcanadjustloanstohelpovercomeperiodsoffinancialdifficulty.

What is the end goal for most of the organisations that approach you - why are they usually seeking a loan? Generally, they want to do more of what they aredoing,ordomoreonabiggerscale.Theyarepreparedtotakeariskanddosomethingentrepreneurialbecausetheycanseeaparticularneedandknowthattheycanmakeadifferencebytakingonadditional investment.

Upon completion of loan repayment are organisations usually in a stronger and more sustainable position? Ourindependentsocialimpactresearchshowsthatfromthepointoftakingouttheloan organisations would say they are more sustainable.Ingeneral,theygetmoreoftheirrevenuefromtrading,theybecomeless reliant on grants and would say they arebettermanagedbecauseintakingonthe risk of investment they have had to improvetheirownprocesses.

Alastair Davis with his team at Social Investment Scotland

FUNDING

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What criteria determines whether an SIS loan is suitable for an organisation?Weareultimatelylookingfortwothings:onebeingthedevelopmentofsustainableincome streams to demonstrate that the investmentcanberepaid,andalsothatthey can then sustain or increase the deliveryofsocialimpactalongsidethat. What is the most common reason organisations are turned down for funding? Themostcommonreasonisfinancialrobustness,whereanorganisation’sfinancesdemonstratethattheywouldbeunabletorepayaloannoworinthefuture.Wetryandrespondtoallenquiriesquickly,and let organisations know if an investment isunlikelytobeapproved,somuchsothatloanapplicationsareveryrarelyturneddownoutrightbyourcreditcommittee.

How can organisations improve their financial robustness? Thereareawiderangeofbusinesssupportandgrantfinanceroutesavailabletohelporganisationsbecomemoreenterprisinganddevelopsustainableincomestreams.That’sanareawheretheScottishGovernment’ssocialenterpriseprogrammesareveryimportant.YouwouldhopetheorganisationwouldbeabletoattractbusinesssupportformJustEnterpriseandthenperhapstheEnterpriseReadyFundorotherformsofcharitablesupportfocussedonhelpingthemtobecomemoreenterprising.

Do you think there is scope for all Third Sector organisations to become ‘more enterprising’ - or are there instances where this is not appropriate?Noteverythirdsectororganisationshouldbeaimingtobecomeasocialenterprise,it’saspecifictypeofbusinessmodelandtherewillalwaysbesomeactivitywhichisdeliveredonacharitablebasisdeliveringservicesthathavetobefreeatthepointofaccess.

However, what we do see is a growing numberoforganisationsthatcanbecome

moreenterprising,eitherbymovingfromgrants to contracts, selling services to the publicsectororthroughretailingdirectlytothegeneralpublic.Theeconomicclimatehas meant that for a lot of organisations tocontinuetoexisttheyhavetothinkaboutdoingthingsdifferently.Ithasmadesomeorganisationsre-evaluatethewaytheyoperateandreconsidertheirincomemix.Wehaveallsortsofexamplesof organisations that have made that transitionandarenowmoresustainableasa result.

What are the main barriers to further improvement?Ithinkthereneedstobeagreaterlevelofawarenessaboutwhatsocialenterpriseis.I’mnotsureyouraveragemaninthestreetwouldbeabletoexplainitorpointyouinthedirectionofasocialenterprisetheywereawareof.IthinkthatwouldalsobethecaseformanycorporatesandevensomeLocalAuthorities.Investmentremainsanissue,evenaftertherecentfunding:demandhasexceededourexpectationsandwewillneedto attract more investment if that continues.

Social Investment Scotland: Connecting Capital with Communities

Looking for investment?

• SISofferarangeofinvestmentoptionsdevelopedspecificallyfortheScottishmarketplace

• Will engage with organisations from an early stage to discuss and evaluate needs• SISofferanopendoorandaccessiblesourceofinformation,supportandfinance

Ifyouwouldliketogetintouchandreceivefurtherinformationcontact:

E: [email protected] T: 0131 558 7706


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Viv Sawyers of Street league, William Edgar, Celia Tennant of Inspiring Scotland,John Swinney, Cabinet Secretary for Finance and Sustainable Growth and Professor Niall Lothian

Inspiring Scotland marks five years of Social impact

FUNDING

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During my time with Street League, I felt as though I learned more than my whole time at school. I gained qualifications I never thought I’d do along with the confidence and support to go on to achieve my biggest dreams.”

William Edgar, one of the people who has benefited from Inspiring Scotland investment through 14:19 Fund Venture Street League

InspiringScotlandoperatesonanoutcome-focused,venturephilanthropybasis;raisingfundsfrominvestorsandusingittoprovidelongtermfinancialsupporttoacarefullytailoredportfolioofcharitablepartners.

Inadditiontofinancialassistance,organisations receive a range of ongoing supportthroughcontinuousengagementwithadesignatedPerformanceAdvisor.Thisequipscharitieswiththeskillsandcapabilitiesrequiredtodeveloptheiroperation,buildcapacity,improvesustainabilityandestablishaclearstrategicdirection.BycollaboratinginthiswayInspiringScotlandcanhelpensureperformanceishighandthatastronglevelofROIisachieved,maximisingthesocialimpactwhichisdeliveredfromfinancialinvestment.

TheInspiringScotlandmodelhasreceivedsubstantialacclaimfromGovernmentMinisters,academicsandmostimportantlythecharitiesandthepeopletheysupport.

“Inspiring Scotland is a unique vehicle for the public, private and voluntary sector to work together to achieve maximum impact for Scotland’s charities.” John Swinney MSP, Cabinet Secretary for Finance and Sustainable Growth

[The Inspiring Scotland model] “is proving to be an innovative and highly effective means of providing more and better social services by strengthening the capacity and networks of third sector organisations.”Noah Isserman, University of Cambridge

SI asks Inspiring Scotland’s Chief Executive, Celia Tennant about the success of the last 5 years and the organisations plans for the future.

Inspiring Scotland has established a very impressive track record, as evidenced in the recent independent Gates Scholar report. Why do you think the approach has been so effective at attaining positive outcomes? Ourmodelissimple:weraisefundingfromvarious sources and invest it in selected portfoliosofcharities,allworkingtotackleaparticularsocialissue.Alongsidethemoneyweprovideaccesstosignificantdevelopmentsupporttohelpunlockandmaximizepotential.Putsimply,wehelpsupportanorganisationtobethebesttheycanbesotheycandomoretohelpthosewho really need it.

How does the approach differ from other investment models?Ourapproachisveryengaged,wesitalongsideeachorganisationwesupportandtheresultofthisisconfidencethatmoneyisworkingashardaspossibleanddeliveringamaximumsocialreturn.Weusethebusinessprinciplesofventurecapitalto address social issues and that makes us different from the outset.

How does Inspiring Scotland determine the organisations and projects that will receive funding - what criteria or outcomes does the board prioritise?First of all we understand the issue we are trying to address alongside the difference that funding can make, and we assess anorganisation’sabilitytodeliveragainstthese. We look at lots of different criteria, butoneistheirambitionandtheirappetiteforaveryengagedventurephilanthropyapproach.Organisationsneedtounderstandthisandwanttobuildastrongstrategicrelationshipwithus.Thereisalsoaperiodofsignificantduediligence.

In Addition to financial support, in what other ways does Inspiring Scotland support the ambitions of organisations?Webelieveittakesmorethanmoneytorealiseambitions,itrequiressignificantsupportandaccesstotherightskills,attherighttime.EachorganisationreceivesthesupportofaPerformanceAdvisor,backedbythewiderInspiringScotlandteam.Thereisalsoaccesstotheskillsandsupport


Inspiring Scotland was established in 2009 to provide a new way of supporting charities in Scotland. Since inception the organisation has channelled £50m through 100 charitable bodies and has impacted the lives of an estimated 60,000 people.

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continuetoaddressinequalitybygrowingourassetsbasedwork,whichoverthepastthreeyearshasproventobeareallyeffectivemodelofsupportingcommunities.Inaddition,weareambitioustoseektohelpsupporttheearlyyearsandlookedafterchildren agendas.

Noah Isserman’s independent academic report provided a unique insight into Inspiring Scotland’s strategic model, were there any lessons learned or anything that will be changed or adapted as a result of his examination?ThisstudyprovidedoneofthelargestsnapshotsofventurephilanthropyanditwasamazingtothinkthataScottishmodel,onlyfiveyearsoldwasabletoprovidethis. We learnt a huge amount and not justattheend,theAuthor,NoahIsserman,providedregularlearningopportunitiesthroughoutthewholeprocess.Whatwasreallyhelpfulwasthefacthewasabletohelpbringaglobalperspective,comparingand contrasting with other models across theglobe.

Thereportconfirmedthatourworkhelpscharitiestobemoreeffectivedeliveryorganisations with a clearer focus on impact;betterimpactmeasurement;betterservicedelivery;andimprovedmanagementcapacity.

fromapoolofprivatesectorvolunteersprovidingsupportinareassuchas,legal,businessplanning,financialmodelling,HR,IToranythingelseoneofourcharitiesneed.Wefocusonhelpingtoprovidelongtermchange,forexample,ifwecanhelpacharitywithnewBoardmemberswiththerightskillsforthenextthreetofiveyears,thatcanhaveamuchlongerlastingimpact.

What methods are used to monitor performance? ThedesignatedPerformanceAdvisorwillmonitorprogressandadviseonkeyissuesrelatingtohowtheinvestmentisspent.Thisincludeschallengingperformanceand delivery of outcomes, advising on operationalandstrategicissuesandsupportingorganisationaldevelopmentandgrowth.Inaddition,thePerformanceAdvisorcarriesoutdetailedquarterlyreviews.Weuseabalancedscorecardapproachtoreportonperformance.Thisrigorousapproachmeanswecandrivedeliveryofoutcomesacrosstheportfolio.Wealsoundertakeanannualperformancebenchmarkingexercisetohelpensuretheoverallshapeofeachfundisasgoodaspossible.

What steps are taken if performance is poor?Ifweidentifyanareaofweakness,ourfirstresponseisalwaystogetroundthatissueandlookathowwecanprovidesupportandimproveperformance.Improvementplanscanbeputinplaceifneededandultimatelywe can withhold or cease funding.

What are the ambitions for the future: how will Inspiring Scotland build on the work of the last 5 years? Wewanttocontinuetoinnovateandfindnewandbetterwaysoftacklingdifficultsocialissuesandwewouldliketobuildonthematureandstrategicrelationshipwehave with Government, other key investors andsupporters.

Wewouldliketobuildonourexistingwork;the14:19Fundisjustoverhalfwayintoits ten year life cycle, and we would like to

Wedidspecificallylearnabouthowourmodelisusedbycharitiesofvaryingsize.Whileitworkseffectivelysupportingorganisationsofallsizeswecanhelpdeliverquite transformative change in small to mediumsizedorganisationsspecifically.Thestudytoldusthatourcharitiesvaluethenon-financialsupportweprovideanditisjustasimportantasthemoney.Thenetworkswecreate,bothwithinfundsandacrossGovernmentandbusinesscanaccelerateopportunitiesforcollaboration,sharedlearning,informingpolicy.Ithinkthatishelpful,notjustforus,butforeveryone working to make change.

How will the role of Inspiring Scotland develop within the Third Sector, are there plans for further collaboration and partnerships?Weliketoformstrongpartnershipsandwewillalwaysexploreopportunitiestocollaborate.Agoodexampleofcrosssectorpartnershipisourworkwithcharity,DameKellyHolmesTrustandBP,indeliveringtheBPYoungleadersProgrammewhichfocusesaround the commonwealth Games.

We’veworkedwithover100charitiesacrossourfundsto-dateandwewouldliketocontinuetosupport,andworkinpartnershipwithScotland’stalentedandpassionatevoluntarysectortoimprovethelivesofthecountry’smostvulnerablepeople.

William Edgar with the Cabinet Secretary


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The PEEK Project

LEADING BY EXAMPLE

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T heprojectplacesastrongemphasisonplayandprovidingasafeenvironmentforyoungpeopleto

explorenewcreativeopportunities.ThebroadrangeofactivitiesPEEKofferaredesignedtodiscoverskills,developconfidenceandbuildself-esteem,whilebreakingdownbarriersofculture,religionandgender.Theprojectencouragesyoungpeopletoutilisetheseattributestobroadentheirhorizonsandtakeadvantageofnewfoundopportunities.Theprojectalsoprovidestrainingandsupportforpeoplewhoaspiretoworkwithchildrenandyoungpeople.

SinceitscreationPEEKhasexpandedsignificantly,growingfromasinglepaidmemberofstaffin2000to14workers

supportedby67volunteersandabankofseasonalstaff.Theprojectwasoriginallyfocussedonchildrenaged5-12,butnowworkswithyoungpeopleacrossamuchlargeragerangefrom5to25.Thegeographicalreachhasalsoextended,growingfromitsrootsintheEastEndtootherareasofGlasgowandtheCentralbelt.

SIspokewithMelodieCrumlinandMichaelaMunrofromthePEEKteamtolearnmoreabouttheirworkwiththeproject.

What has been the impact of the PEEK Project in the local community?MC:Theprojecthasmadeasignificantlocalimpact,withchildrenreclaimingtheir

spacesforplayandplayingoutsidemoreoften.Therehasalsobeenanoticeablechange in culture, with a reverse in the mind-setofnegativitytowardsyoungpeopleandagreaterappreciationthattheycanbevaluablecontributorstoourcommunities.Thishasbeenhelpedbyyoungpeoplefromtheareagivinguptheirtimetovolunteer;over40%ofourteamarelocalandtheyhaveestablishedthemselvesasrole models within the community, giving arealcommunityownership.Theirworkhascontinuedthecycleofbreakingdownbarriers,providingcreativeopportunitiesandencouragingpositivechoices,inturnthishascausedareductioninanti-socialbehaviourandcrime.

The PEEK Project was established by the Church of Scotland in 2000 in response to calls for greater provision for the local children of Glasgow’s East end. The project was created to combat the limited choices and opportunities which were available in the community and enrich the lives of those growing up in the area. By setting out to listen carefully to young people the PEEK team hoped to understand their aspirations so they could help them achieve their goals and increase their expectations in life.

Children at the PEEK Project


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When you mention that local children are reclaiming their spaces of play, who or what are they reclaiming it from?MM:Usuallythesearespacesthatareunused or areas which are utilised for a negative use. Sometimes it is land which is deemedtobedangerousbyparentsorthelocalauthority-itmightbeanareasuchasacarparkwhichhasbecomeaplacewherepeoplecongregatetodrinkalcoholorwheredrugaddictsareusingthatspace.Sowehelpthechildrentoreclaimtheareaforapositivepurpose.

How does the project team support young people to reclaim the space? MM:Wesupportthemthroughsupervisionandencouragement,soprimarilyit’saboutbeingthereandaboutbeingapositiverolemodel.Itisalsoaboutestablishingalinkwiththelocalcommunity:sometimeschildrenaregivenlessprioritywithinacommunitysoit’salsoaboutadvocatingforthemandgivingtheyoungpeopleavoice.

Additionally,thereisworkwithorganisationslikeGlasgowCommunitySafetyServices,LocalHousingAssociationsandthePolicetoreportcrimeandanti-socialbehaviour.Wealsohelptoorganiseclean-upsandgettheyoungpeopleandthewidercommunityinvolved.Thisbenefitseveryoneinthelocalareabytidyinguppublicspacesandgivestheyoungpeopleasafeplacetoplay.

Is the local community usually receptive to supporting these types of projects?MM:Theinitialreactionisoftenquitesceptical;wedon’tliveinasocietywherechildrenarealwaysoutsideplaying,it’salmostconsideredabnormalnow,sothefirstreactionisoftentowonderwhythekidsareoutsideplayinginthestreetandwhytheyaremakingnoise.Butwhenweengagewitholderresidentsandtheparentsinthecommunity,peopledorealisethatthisisapositivethingandthatitisimportanttogivechildrenanopportunitytoplay.Theycan see that kids should have the freedom toexploreandnotbestuckindoorsrelianton technology for entertainment. So it’s aboutengagingwiththecommunityasa

whole.Oncetherehasbeensomeinitialengagement,wedogetolderpeopleoutspeakingtothekidsabouthowtheyusedtoplaywhentheywereyounger.Playconnectspeopleatalllevels,inmanyrespectsit’sauniversal language.

Everythingwedointhecommunityisrelational,sothePlayRangersfocusongettingpeopleoutdoors,involvingtheparentsandencouragingthemtospeaktoeachotherandstarttotakeownershipandhelpout.Thereareclearbenefitsfortheparentsaswell,becausethekidscomehomeandsleepforthefullnightandthismakesiteasierforthemasparentsandimprovesthehomelifeforthewholefamily.Theythentalkaboutthesebenefitswithfriendsandotherparentsandthisextendsthereachoftheproject.Itdoestaketimebuteventuallypeoplegetonboardandtakefullownershipforcreatinglocalplayopportunities,thisthenleavesthePlayRangersabletomoveontoanotherspaceoranother area.

What benefits does involvement in the project have on the young people themselves?MC:Theprojectprovidesawiderangeofpersonalbenefits,offeringnewexperiencessuchastheirfirstyouthexchangeorfirsttasteofanewsportorartform,thishelpsbroadenhorizonsandbuildconfidence.Theseactivitiesarealsoanidealwayforthemtomakefriends,meetpositiverolemodelsandinspireone-another.Theycanalsogainqualificationsandrecognitionfortheircontributioni.e.Saltireawardsforvolunteering;artsaward,dynamicyouth,youthachievementandemployability.Wealsoseetheyoungpeopledevelopasenseofbelonging,takingprideinbeingpartofsomethinggoodthattreatsyoungpeopleforwho they are.

What are the main challenges and barriers you encounter in you role at peek?MC:Themainchallengeisalackofappropriatefundingwhichleavesuswith stretched resources. We have had considerableinvestmentbutitisneverenoughgiventhenumberofchildrenwe

are working with and the level of need thattheyhave.Manyofourfundersarehappytogivemoneyforprogrammecosts,howeverwehavealsogottorememberthatcharitiessuchasourselvesareanemployerofpeople,sowealsoneedfundsforbackofficetasksandadministrationandthat’sbecomingincreasinglydifficulttoget.Thepeopleonthegroundaredealingwithsomeverydifficultsituationsandtheyneedtobesupportedandequippedtobeabletocopewith that.

Overthelast12monthstherehavebeensignificantpotsofcapitalfundingavailableforfacilities,butwhatwedoismostly

LEADING BY EXAMPLE

21

outdoors so we are not really looking for facilitiescosts.Anewcommunitycentreisn’tgoingtosolveallthecomplexproblemsinalocalarea,infactquiteoftenbuildingscanpresentabarrierforpeople.Whereas,we go out into the community and engage withpeoplebecausethatiswhatworks.Wedon’t wait for them to come to us.

Ultimately,it’sthepeoplewhomakeit,wedon’tneedshinynewbuildings,thatmoneycouldbebetterusedinotherways.WehavealotofoutdoorspacehereintheEastEnd,andsomeofitisabitdilapidatedandrundownandifwecouldjusthaveasmallbitofinvestmenttocleanitupandthenget

peoplefromtheareaalongsideprojectslike ourselves to run things and organise activities.Thatwouldmakesomuchmoreofanimpactthanonenewbuildingandtheimpactwouldbemorelongterm.

Thelengthoffundingisalsoacommonissue, most of the time funding will only befor1or2years,whereasitiswhenyouhave a longer term investment that change andprogresscanreallybemade.Sowecouldreallybenefitfrommorelongterminvestment.

Do you think the importance of play is now more widely recognised?MC:Intermsofpolicyandfunding–yes.WehavethefirsteverNationalPlayStrategyandthereseemstobemorefundingthanthereoncewas.Intermsofwidersocialrecognition,Ithinkit’sgettingtherebutthereisstillsomeworktodo;peoplequiteoften like to see outcomes straight off when in fact we need to invest in the longer term ofplay.

WehavebeenworkinginpartnershipwithScottishSportsFutures,InspiringScotlandand the Scottish Government to do the ActivePlayInitiativepilot.Thisisfocussed

Kids at the PEEK Project benefitting from sport


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ontryingtodeterminehowwebuildphysicalliteracy in children at a grassroots level and inspirethemtohaveahealthylifestyle.Itisnotforthepurposeofcompetitivesportbutforencouraginganactiveandhealthymindset.SothroughprojectsliketheActivePlayPilotithasbeengoodthatwehavebeeninvolvedinacapacitytohelpinformandinfluencepolicy,andthesepartnershipshelpustopromotethemessageabouttheimportanceandimpactthatplaycanmake.

Why did you choose to come and work for PEEK and what do you find most rewarding about the role?MM:GrowingupasaparticipantinPEEKIknowthedifferencethataprojectlikePEEKcanmakeinayoungperson’slife,aswellasintheoverallcommunity.Ibelievethatwecan make a lasting difference in someone’s lifeandthatitcanhaveawiderimpactthrougharippleeffect.

MC:WhengrowingupinCastlemilkIwasinspiredbytwopeople,thefirstwasAgnesHoeyfounderoftheGlasgowYouthChoir.Shetookmanyyoungpeopleunderherwingandsharedhergreatpassionforthearts.Thesecondwasourlocalyouthworkerwhoencouragedmeandbroughtmeoutofmyshellthroughtheartsandplay.Ialwayswantedtogivethosetypesofexperiencestootherchildrenandyoungpeople,knowingthebenefitsthatitbroughtme.

MC:Themostrewardingpartformeisseeingthepositivechange-seeingachildexperiencesomethingforthefirsttimewhich then gives them a thirst for more andthisjustbuildsandbuildsandleadstoarippleeffectonthosearoundthem.Changingtheworldiseasywhenyoustartwithoneperson.

LEADING BY EXAMPLE

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C ontroversyoverexecutivepayisnothingnew;weareallusedtohearingseeminglyendlessdebates

abouttheremunerationofexecutivesinboththeprivateandpublicsectors.So,perhapsitisinevitablethatthespotlighthasnowswungroundtoexecutivesinthethirdsector.TheTelegraphputthesectorunderthemicroscopelatelastyearwhenitreportedthatthenumberofexecutivesreceivingsix-figuresalariesatBritain’s14leadingforeignaidcharitieshadrisenbynearly60percentoverathreeyearperiod.Now,SavetheChildrenInternationalhasbeencastigatedforpaying20ofitstopemployeessixfiguresalarieswhileMarieStopesInternationalhasbeencriticisedforpayingitshighestearner£290,000.

InOctober,theHouseofCommonsPublicAdministrationSelectCommitteeissueda call for evidence regarding the salaries forchiefexecutivesinthecharitiessectorand has since received oral evidence from representativesfromacrossthesector.

TheCommitteedoesnotintendtoproduceareportorguidanceonitsfindings,asitsroleisonlytoscrutinizetheCharityCommissioninregulatingEnglishcharities.Nevertheless,thediscussionstheyhavehad give some insight into the sector’s approachtothismatter.Aclearmessagewasthedesirefortransparencyaboutpaylevels.MPRobertHalfon,whoisamemberoftheCommittee,haspubliclycalledfor“a requirement for charity chief executive salaries and perks to go on their website in an easy form, so people can make a decision if the charity is using the money carefully before they donate”.

NCVO,therepresentativebodyforthesectorsouthoftheborder,haslauncheditsownexecutivepayinquiry,whichwillseektoprovideguidelinesforcharitytrusteesto take into account when determining executives’remuneration“in order to stop pay being a media football”. While the resultsoftheinquirywillnotbepublisheduntilthespring,chairMartynLewishasalready said that it was likely to recommend increasedtransparency.Hesuggestedthatthiswouldincludemakingpublicnotjusttheamountspaidtoexecutivesbutalsowhathecalls“inheadlineterms,theargumentsbytheremunerationcommitteesontheboardsoftrusteeswhentheydecideontheseamounts”.Healsosuggestedthatthekeyinformationshouldbeeasilyaccessibleonacharity’swebsite“no more than two clicks away from the home page” butwentontosaythatacaponsalarieswasunlikelytoberecommended.TheAssociationofChiefExecutives’GoodPayGuideforCharitiesandSocialEnterprisealsoidentifiesoneofthekeyfactorsastheneedfortransparency,albeitaspartofacombinationoffactorswhichrequiretobeconsidered.

Itisclearthattherecentrevelationsinthemedia do not tell the whole story across the sector and, so far, the discussions have primarilyfocussedonEnglishcharities.Infact,researchbytheScottishCouncilof

VoluntaryOrganisationsfoundthattheaveragesalaryforchiefexecutiverolesadvertised on their Goodmoveswebsitehadfallenaround£5,000to£44,452forthefinancialyear2012/13.WhilethesefigurescomefromonlyasmallsampleofScottishcharities,theyarestillsignificantlylowerthanthehighsalariesbeingdecriedinthemedia.Nevertheless,thereputationofthesectorinScotlandhasnotescapedunblemished.Forinstance,TheHaloTrustwhich is a Scottish charity hit the headlines recentlywhenitwasreportedthatitfundeditschiefexecutive’sfourchildrenthroughsomeoftheUK’smostexpensiveprivateschools.Thecharityhassincestatedithasamendeditsremunerationpolicy.

Therecanbelittledoubtthatrevelationssuchastheseservetounderminepublicconfidenceincharities.RecentresearchbynfpSynergyfoundthatmorethanhalfofthepublicareopposedtopayingtrustees,thatathirdopposethepaymentofchiefexecutivesatallandthatthereiswidespreadconfusionaboutwhichcharitystaffarepaid.Inthisenvironmentofconfusion, the revelations of salaries which mostofuscanonlydreamofbeingpaidoutofcharitablefundsbecomeevenmoredamaging.Nodoubtmanycharitytrusteeswillbeleftlookingattheirsalarybillandworryingifitcouldbethecatalystforeitherapublicbacklashorsomescrutinyfromtheregulator.So,doesScottishcharitylawhelptrusteeshere?

Therearenolegalruleswhichdirectlygovernthepaymentofcharityexecutivesand only rarely will a charity’s constitution dealwiththis.Intheabsenceofanyrules,trusteeswillbe(relatively)freetoreach their own decisions as to the level ofremunerationofexecutives.However,as with any decision affecting a charity, trusteesmustbemindfuloftheirduties.ThismeanstrusteesofScottishcharitiesshould act with due care and diligence, in the interests of the charity, in a manner consistentwiththecharity’spurposes

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andtoensurecompliancewithlaw.It’salsoworthbearinginmindthatwhendetermining whether a Scottish charity providespublicbenefit,regardshouldbegiventotheextentofany‘privatebenefit’.Intheoryatleast,thiscouldincludeexcessiveremunerationorperkstoemployees.Asaminimumofgoodpractice,thetrusteesshouldmakesurethatdiscussions on staff remuneration levels areproperlyminutedandthatallrelevantfactorsaretakenintoaccount.Thismightincludeseekingguidancefromprofessionalassociations on levels of remuneration, benchmarkingremunerationagainstother

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Sadly,evendoingallthismaynotbeenoughtoavoidpubliccensure.Unfortunately,thepublictendonlytoseetheheadlinefiguresandnotthereasoningbehindthem.Atfirstglance,thefiguresmightseemsurprisingbuttheycouldbeentirelyjustifiableinthecontextofthefieldinwhichthecharityinquestionoperatesandthedecision-makingprocessofthetrustees.Itisthiswhichhasled much of the discussions south of the bordertofocusontransparencybecause,ifthepublicismadeawareofboththelevels

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INTERVIEWTIPS

ONE EASY PAYMENT AND THE JOB IS LIVE

I WISH I KNEW HOW TO FIND A GREAT JOB WITH A CHARITY

I WISH WE COULD RECRUIT GREAT NEW STAFF

Spectrum Events is proud to provide Social Investment conferences and seminars for

Scotland’s third sector. Our events focus on social investment, funding, preventative spend and other key strategic issues for the sector. We work with partners from across the third, public and private sectors to create genuine

and productive debate and real business development opportunities.

Details of our Social Investment 2014

conference, alongside further information on our scheduled events for January to

June 2014, will be available online soon.

You can register to be kept up to date on our upcoming events buy emailing

[email protected].

Spectrum Events is proud to provide Social Investment conferences and seminars for

Scotland’s third sector. Our events focus on social investment, funding, preventative spend and other key strategic issues for the sector. We work with partners from across the third, public and private sectors to create genuine

and productive debate and real business development opportunities.

You can register to be kept up to date on our upcoming events buy emailing

[email protected].

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About us Quarriers is a Scottish charity providing practical support and care for children, adults and families at any stage of their lives across Scotland and England.

Quarriers offers a diverse range of services which Transform Lives. Over the last 140 years, we’ve built on our expertise at providing a range of support to meet these challenges.

Quarriers is a registered Scottish Charity No SC001960

Our services Through more than 150 sites nationwide, our services impact on the lives of over 17,000 people. We aim to continuously improve the services we provide and want to tell you more about

We believe effective partnerships are the foundation of sustainable, value-added services.

www.quarriers.org.uk

Expert at providing quality education and residential services for children and young people.

I feel that you have done a great job for my son and I am so proud of him and that couldn’t have happened without the support of all the staff.

“ ”Maggie, parent

Without Quarriers, I don’t know where I’d be now.“ ”John, young person

Expert at providing the right support at the right time for young adults.

Kelly, mum

Everybody is treated the same here - no favourites. But you don’t get away with anything either. Staff don’t make assumptions about anything or anyone.

“”

Expert at supporting Children and Families to live

Quarriers, Quarriers Village, Bridge of Weir PA11 3SX

Tel: 01505 616000/612224 Fax: 01505 613906

si magazine autumn 2014

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