Dan Corry took on the role of chief executive of New Philanthropy Capital (NPC) in October 2011, following a varied career in public policy and economics. His previous roles have included head of the Number 10 policy unit, senior adviser to the prime minister on the economy and head of the New Local Government Network.

Will this background affect future directions at NPC, Caroline Hartnell asked him. One thing he wants to do is broaden the definition of impact that NPC uses, moving beyond NPC’s original emphasis on analysis of non-profits in an attempt to replicate the analysis of companies available to private sector investors.

As a new CEO coming in to an organization, people are always going to ask what’s going to change. You’ve got much stronger connections with government than previous CEOs of NPC, who tended to be more linked to the financial sector – will this affect the directions you want to go in?

Everyone comes with their own baggage, so I’m bound to do things differently. I’m probably more interested than my predecessors in policy, as I’ve worked more on that than anything else. I ran a local government network for three years, and know that sector very well. A lot of what I’ve done has been closely related to the NPC aim for evaluation: is something cost-effective? Could it be more productive? Can you make sure funding flows to places where you get the best return?

One thing I’d like to do is to broaden the definition of impact that NPC uses. I’m interested in anything that affects the flow of money into the sector – whether it’s from government commissioning, philanthropists or charitable foundations. Money comes into the sector, flows through the charities or social enterprises, and ends up helping beneficiaries. Anything in that value chain that reduces the work the money is doing should be a focus of our mission. A very big part of that is what NPC has always done, which is trying to understand, and help charities to understand, what they are trying to achieve and what they are actually achieving. Not all funders are interested, but for those who are, we want to guide their grantmaking or social investment into the areas where there is a social need and where there is a good organization.

That remains key, but we’re also doing a lot of work under the term ‘shared measurement’. We’ve got a big project being put together which we’re involved in with the Office of  Civil Society [the relevant part of UK government for the third sector] and various foundations to see if we can all agree a bit more on measurement. If charities within a sector could agree to some extent on the outcomes to measure, one could do a bit more comparative work. Equally, if four foundations are funding one charity and all asking for measurement to be done in a different way, it’s a bit ridiculous. So I think you’ll be seeing a slight change in emphasis and a broader outlook at NPC.

The emphasis of SIAA [Social Impact Analysts Association] seems to be more in line with NPC’s original focus on the analysis of charities, so that foundations and philanthropists could have the same sort of knowledge base available that private investors would have for companies. Is SIAA now moving away to do that on its own and leaving NPC to look at the broader picture?

When NPC set up SIAA as an independent organization, it was always our plan to incubate it and then help it to  go off on its own to build the profession of impact analysis. SIAA is going to have more of an international flavour than NPC.

I think part of NPC’s mission will always be to help funders to guide their money to good charities that are achieving something – although we’re not a matching service. It will never be the way it is in the City: you can’t judge charities with the same easy metrics that you can with private companies, but you can certainly highlight good organizations, and we work with charities and foundations to help them understand how to measure that in a sensible way.

But I think you kid yourself if you say that you maximize impact simply by making sure that funders have got information on who the good and the bad are and that they invest in the best. That would be a great step forward and we will continue to work on that, but there are lots of other factors.

In a way, going back ten years, that’s where NPC came in.

That’s right, NPC started with an aim of finding out how close you could get to what the City does: how much could you rank charities? How could your sector research reports guide investment decisions? How much, when you’ve done all that, would that influence decisions that funders made? They gave it a good go, but frankly it didn’t quite work. Elements of that exist at NPC still: we do sector reports and hope that they influence things; we guide philanthropists through, or towards, sectors and charities they are interested in. But we don’t give them a list of, say, every charity in the mental health sector with a precise ranking, and nor could we, in my view.

It is also worth mentioning the new beast in the game, which is social investment. Social investors look for a mix of financial return and social return. They can assess financial risk, but they will be much more demanding on social return, I suspect, than grantgivers. I think this will worry some people. I think some will say, ‘we will only invest if you hit these outcomes’, and the reply will be ‘that’s not what we do’. The minute you measure too tightly you get perverse incentives. But there will have to be some metrics because these investors are looking to get returns.

It seems quite a damning thing to say about grantgivers that they’re not so concerned about social impact. Are you saying that with social investors, because they are consciously trading in some of their tangible financial return, they will be more insistent on getting a social return?

Well, there is massive variability in this sector: some grantmakers care a lot about social return and a few don’t care at all about measuring it, they just know what they’re doing is a good thing to do.

There are lots of reasons why trying to impose models from the private sector on the charitable sector doesn’t work. It’s very interesting what has happened in the UK government’s Work Programme: charities that are mission-driven have become subcontractors, and some of them feel that they are being driven to ‘cream and park’ as a private sector organization would do – this means that if your contract rewards certain outcomes, you try to work with the people with whom it’s easiest to achieve the outcomes with rather than the most in need. A mission-based organization would just say no, I don’t feel that’s right. So it’s complicated, but that’s no excuse for not going down these routes a bit more.

But the spirit of the basic things that NPC set out to do is still there. At the end of the day there is the danger that resources will not be used in the best way to help the beneficiaries, and you must never lose sight of that. You let them down if you’re not doing this, so it’s a kind of moral imperative as I see it. But you have to be realistic. As a philanthropist it’s your money; if you want to just dish it out, that’s your business. But why aren’t there more people who really do care about impact? As I said, it may well be that people will think about it differently when it comes to social investment.

I think it’s fair to say that NPC has always struggled with its funding model and that the founders have continued to partially support the organization. What’s your perspective on this in the long term?

You’re right, our trustees believe in our mission and give us donations but they don’t want to do that forever. So we need to find a business model that works! In the City you do quite a lot of work that you don’t get paid for – research reports and so on – but it brings in the clients, and that’s how you pay for it. What historically seems to have happened at NPC is that our reports are out in the public domain, and they are very much liked and used, but they haven’t brought in the work. And because we’re mission-driven, we don’t want to say no when people come to us for help. Meanwhile, the show has to be paid for [NPC has about 30 full-time equivalent staff].

The consultancy side is our key source of funding now, working with funders and charities and some quasi-governmental organizations. In the early days some of the sector research was funded by foundations, and that seems to have stopped, although I think there is room for them to fund some of it again. At the moment, a foundation may commission a piece of research, but it’s private to them so not so useful to the sector in terms of trying to direct funds more broadly.

Another side of this organization will be the think-tank side, and you’ll see a lot more of that with me – the issues fascinate me and I want us to be influencing the debate. We’ve already kicked off a piece of work which is a survey about commissioning, and that’s being funded by a private sector organization.

In terms of NPC as an organization, there is potential for fantastic synergies between the consultancy and research sides, and if I get them working together rather than as separate bits of the organization, then it will be really powerful. It’s difficult to achieve but everyone gets a buzz when it works well.

To say that the consultancy side is the ‘cash cow’ that funds the research side is exaggerating but there is a danger of that – I’ve seen it happen in other organizations and we must avoid it. I think it will help change this if I can get more of the think-tank work funded.

Another new avenue we’re exploring is social investment. From a consultancy perspective, we noted that charities and foundations were starting to ask us, for example, whether social impact bonds were something they should get involved in. We produced a report a few weeks ago which was a common-sense guide for charities and foundations interested in social investment. With Big Society Capital entering the market quite soon, an organization that understands the whole value chain may be useful.

So looking at the social investment space, do you see the different aspects in the same way: consultancy work, research reports, think-tank work?

Yes, we’ve run a seminar already with Nick O’Donohoe from Big Society Capital, and I’m also quite keen to do some action research on this. When I was running NLGN [New Local Government Network] it was a time when PFI [private finance initiative: a way of creating public–private partnerships by funding public infrastructure projects with private capital] was getting very big, and we did a lot of work on that, trying to establish what made a good or bad PFI, and how they worked over time. I’m interested in trying to encourage innovation and experimentation and good practice but I also want to guide people away from mad dead ends. Just because there’s some money around called social investment, it doesn’t mean you should have some of it, as people did with PFI. Local authorities – which on the whole had professional help, which the average charity won’t have – thought ,‘this is where the money is, we’ll have some of that’ and signed contracts without really knowing what they were doing. It turned out years later there were some very good contracts but also some very bad ones, and we don’t want that happening with social investment.

Martin Brookes, your predecessor, was quite given to controversy, and you’ve made it clear that you see yourself as just as likely to make waves and say what other people are afraid of saying. So what are the areas in which you think you’re likely to be doing that?

I think we should always make waves because we are, somewhat uniquely in this sector, totally independent. I have great admiration for organizations like NCVO and ACEVO and ACF, but at the end of the day they are representative organizations and there’s a limit to what they can say and do, so I feel we have a kind of duty to raise difficult issues. Also, unlike most of them, we work with everybody from the funders and intermediaries through to charities big and small, so we’re hearing all angles every day. I want what we’re saying to be rooted in what’s happening, and what people are experiencing, not the result of a few clever people sitting round a table one day and having some ideas.

There’s an interesting bit of work that we’re trying to get funding for at the moment, which looks at how foundations should be thinking about their funding in these difficult times: should they be helping to plug the short-term gaps left by government or is their job to fund long-term innovative stuff that nobody else will fund? I think that’s a really interesting debate, and if we do the work it may well cause a bit of controversy, partly because my experience of foundations is that they take quite different approaches to things – quite legitimate but very different.

I don’t think all foundations have to agree but I think we can stir it up a bit on the philanthropy side. We recently co-hosted the launch of a book by Tom Tierney and Joel Fleishman [Give Smart: Philanthropy that gets results]. They seemed to be describing a world of philanthropy in the US that just doesn’t exist here. They were very strong, for instance, on how much better spend-out foundations are, how much better accountability is for ‘giving while living’. They may be exaggerating, but it is frustrating that these issues aren’t being raised here.

So I think we will be controversial within the sector, and with government if we think policies are holding people back, or if we think charities are not using their resources in sensible ways. Although obviously we have to pick our battles!

For more information
DCorry@philanthropycapital.org
http://www.philanthropycapital.org