What’s Your Endgame? The 1% conundrum for the non-profit sector

Posted on by Michael Ambjorn

1.2% of UK charities turn over 68.9% of the cash cycling through the sector. So never mind Oxfam’s predictions for individuals – it is already true for the sector that often says it is out to change the world for the better. Are they doing enough though?

A recent Stanford Social Innovation Review webinar grappled with the way organisations think about scaling (specifically to achieve wide-ranging and lasting change) – the authors, Alice Gugelev & Andrew Stern, focus on non-profits, but the thinking is useful for any organisation trying to change the world.

Having an end in mind is essential for aligning your board – and other stakeholders – yet, many organisations omit this from their planning.

One example cited is the formation of new charities – and whilst the authors focus on North America, it is relevant elsewhere too. Quoted in The Independent, Sam Younger (recent Chief Executive of the UK’s Charity Commission) sets this out in stark numbers:

In the 2013/14 financial year, the Charity Commission received 6,661 applications for new charities in England and Wales, a 16 per cent rise on the previous year. “There are more people coming forward to establish charities than is really desirable, in the sense that I think some of those people might operate better not by establishing a new charity but by collaborating with, working with and associating with existing charities,” Mr Younger said.

Let’s connect that to the bigger picture for the UK:

Charity Register as of 30 September 2014

Annual income bracket Number of charities % Annual income £bn %
£0 to £10,000 67,972 41.4 0.227 0.4
£10,001 to £100,000 55,207 33.6 1.945 3.0
£100,001 to £500,000 20,940 12.8 4.618 7.2
£500,001 to £5,000,000 8,358 5.1 12.580 19.6
£5,000,000 plus 1,990 1.2 44.680 69.8
SUB-TOTAL 154,467 94.1 64.050 100.00
Not yet known 9,630 5.9 0.000 0.0
TOTAL 164,097 100.0 64.050 100.0

Do you serve on the board of one of the start-up non-profits mentioned above? Or perhaps on one of the minority large-scale players (only 1.2% of UK charities turn over more than £5m). Either way, you owe it to yourself and those you serve to seek clarity.

And let’s be direct: it is perfectly valid for a small charity to serve a niche need and never seek to scale. Just be clear about it.

My main concern is in fact the 1.2% who sit on 69.8% of the income. Especially if we’re to take the figures in this table as transferable to settings beyond North America (heckles welcome):

The Stages of Organisational Growth and Social Capital Chasm
Figure by Alice Gugelev & Andrew Stern from What’s Your Endgame? – Winter 2015 issue of the Stanford Social Innovation Review

What to do?

With apologies to Voltaire: ‘with great resources come great responsibility’ – so whether a charity turning over just a few thousand, or one of the 1%ers:

  1. See the top five take-aways from the webinar in the Tweets below (RT as relevant).
  2. Look at the Stanford Social Innovation Review brief survey (in the last embedded tweet).
  3. Review “Plotting an Endgame” in the last visual and ask the “What is our Endgame?” strategic question at your next board meeting.

The six options laid out by the authors may help – and don’t forget to think through the resource implications.

Need help aligning your thinking on this issue for your organisation? Get in touch.

Michael Ambjorn is founder of @alignyourorg. You can follow him @michaelambjorn

Full SSIR article: What’s Your Endgame

Plotting an Endgame: Six Options - Winter 2015 issue of the Stanford Social Innovation Review
Figure by Alice Gugelev & Andrew Stern from What’s Your Endgame? – Winter 2015 issue of the Stanford Social Innovation Review

Published by Michael Ambjorn

Founder of Align Your Org