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The voice of Scotland’s vibrant voluntary sector

Published by Scottish Council for Voluntary Organisations

TFN is published by the Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh, EH3 6BB. The Scottish Council for Voluntary Organisations (SCVO) is a Scottish Charitable Incorporated Organisation. Registration number SC003558.

Nobody does it better - private sector v third sector governance

This opinion piece is almost 8 years old

Sandy Macdonald says there's good and bad practise whether an organisation's purpose is profit or people

Lately, it seems common to hear people talking about areas where the third sector could stand to learn from the private sector. Whether it’s governance, financial management, sales techniques, communication or branding, isolated examples of poor practice in the third sector have been amplified and held up as justification for a view that somehow the private sector does these things better.

It’s not true of course. At the very least, charity workers are unreasonably held to higher moral standards than others, because there are plenty of examples of poor practice in the private sector too. And it’s never right for poor practice and questionable values to be excused in the private sector because ‘that’s just business’.

Without wishing to respond to one generalisation with another, there are plenty of areas where business can learn from charities. When it comes to best practice, we can all learn from each other.

Sandy Macdonald

There’s a wide range of good and bad practice in every sector. In my experience, the best results often come from excellent partnerships between sectors

Sandy Macdonald

As well as being head of sustainability at Standard Life, I’m lucky enough to be a trustee with Children 1st. We begin every board meeting with a service presentation and a reminder of the people we exist to help. A colleague of mine who’s a board member at CHAS tells me they do the same. Throughout everything we do and our board discussions, the children and families we help are always at the front of our minds.

Charities are by their very nature purpose-driven and most are acutely aware of the role they play in society. I know there are businesses who begin meetings by reminding themselves of their customers, and their purpose, but I don’t believe for a minute it’s as commonplace and as embedded as it is with charities.

And let’s not forget that most trustees in the charity sector are acting on a voluntary basis. The discretionary effort and input is incredible, and the social impact of this gift of time and expertise is priceless. Again, the same selflessness is not always so pronounced elsewhere.

But really, my main issue is the unnecessary need for comparison between sectors. There’s a wide range of good and bad practice in every sector. In my experience, the best results often come from excellent partnerships between sectors.

To give just two examples, at Standard Life we rely on our partnerships with charities and local government to support effective transition from local schools to the workplace. We want to be an inclusive employer and to inspire the best talent to come to us, regardless of background. Charities help us do this, sharing expertise and insight that we lack. They also help us understand how to be more accessible for a range of customers with different needs, for mutual benefit. And similarly, the incredible growth of the living wage in Scotland has come about from outstanding collaboration across government, charity and employers of all sectors – to the benefit of thousands of individual workers and the community at large.

One of the most positive trends in recent years, to my mind, has been the convergence of business models. This is demonstrated by the growth of social enterprise and B-corps, the recognition from enlightened businesses that they benefit from focusing not just on profit but also on their social and environmental impact, and the increasing emphasis on sustainability and good governance in charities. Thankfully most people I meet across the sectors in Scotland recognise they can achieve better results from working together. There are inspirational young leaders emerging right across sectors and this is a time for opportunity and ambition built on collaboration, not for divisive comments across imaginary sectoral walls.

To borrow from the recent Scottish Charity Awards hashtag, I’m proud to say that #Ilovecharity. I’m grateful to all our partners in the sector and I look forward to ever greater collaboration to achieve shared aims that make our communities stronger and better off.

Sandy Macdonald is head of sustainability at Standard Life