Sustainable funding for the Welsh rural voluntary sector: issues of networks, legitimacy and power

Abstract

Although the global economic downturn lends urgency to issues of financial sustainability in the voluntary sector, the issue is not new. There is an emerging consensus that voluntary organisations need to pursue financial sustainability through trading and social enterprise activities, government contracts, and a wider grants base. There have been some prominent success stories emerging over the last decade (e.g. Shore 2001, NCVO 2009, Age Concern 2009). This paper however, questions the extent to which these funding strategies may be pursued successfully by rural organisations. There are some significant barriers that remain unacknowledged by those who advocate such approaches. The authors undertook evaluation work for Sustainable Funding Cymru a project sponsored by the Wales Council for Voluntary Action that aimed to develop the funding capacity of voluntary organisations in Wales. Data for this paper derives from case studies, interviews and a focus group of participants in the project who came from voluntary sector charities, nonprofit organisations and social enterprises that deliver a wide range of social and community services. A substantial number of these serve rural communities. A Unique Context The sustainable funding of the Welsh voluntary sector (and especially its rural areas) is set within three important aspects of its contemporary policy context. Firstly, Wales achieved a degree of independence from the centralised UK state in 1997 and established a separate legislature. The enabling legislation required the new government to partner representatives of the voluntary sector to design and implement policy (OPSI 1998). What has emerged, however, is a set of institutional arrangements that focuses more on representative governance than on service delivery partnerships (Entwistle, 2006). Local public authorities remain the primary service providers for local communities although there is a certain amount of contracting out as in England (Bahle 2003). Secondly, whilst traditional funding sources for the voluntary sector have come from donations and individual giving (NCVO 2009), the current trend is toward public sector funding, which is administered centrally. Additionally, Wales has received some £3 billion in development funding from the European Union (EU), which is set to expire in 2013. This that helping voluntary organisations to prepare for post-EU funding is a priority. There are indications that the sector in Wales fares less well compared to other parts of the UK and that it is more dependent on government sources (local, national or EU). These account for nearly 45% of the current funding of the Welsh voluntary sector (National Assembly for Wales, 2008compared with 36% for the entire UK (including Wales) (NCVO, 2009). Thirdly, rural policy in Wales must be viewed in the context of a changing rural economic landscape. Much of Wales is relatively isolated and poorly served by public transport. It has suffered the devastation of its traditional industries. The decline of the coal and steel industries in particular has brought severe hardship to many communities (Chaney 2002). Thus emerging from the evaluation data and a review of the institutional arrangements derived from political-historical context, is a picture of critical challenges and issues for Welsh rural organisations related to the organisation and their representative actors. Developing Theoretical Linkages In order to gain resources, rural voluntary organisations must engage with some highly complex network relationships. They need to interact both vertically within a mandated set of institutional relations and cultivate horizontal relationships both within their own sector and the public sector to be financially sustainable (Entwistle, 2006). Benson (1975) suggests that ways in which organisations manage relationships both this internal network and with their external linkages will impact on their ability to achieve legitimacy and obtain resources. In Wales these partnerships are proving difficult to implement. Negotiating the fierce competition for public service contracts and strong institutional arrangements for local partnerships make it difficult for rural organisations to achieve the legitimacy and power needed to move beyond the established funding resources (Benson 1975). The paper suggests that in the competition for funding, rural organisations in Wales encounter a number of difficulties. Being embedded in their communities means they are constrained by geography. They are unable to compete with larger UK-wide agencies who have more freedom about where they operate. Also their networks become blocked as they are unable to overcome particularistic local power politics. They lack the people, the organisational capacity and infrastructure to identify, mobilise and secure funding. We suggest that national policies often ignore these rural realities and therefore urge strategies for funding sustainability that are very difficult to achieve for the majority of organisations. References Age Concern (2009) Products and Services website http://www.ageconcern.org.uk/AgeConcern/all_products.asp Bahle, T. (2003). The changing institutionalization of social services in England and Wales, France and Germany: Is the welfare state on the retreat? Journal of European Social Policy, 13 (1), 5-20. Benson, J.K (1975), "The interorganizational network as a political economy", Administrative Science Quarterly, 20, 229-49. Chaney, P. (2002). 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