Surviving mission drift: How charities can turn dependence on government contract funding to their own advantage

NONPROFIT MANAGEMENT & LEADERSHIP, vol. 22, no. 2, Winter 2011 © 2011 Wiley Periodicals, Inc. 217Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/nml.20050

CASE STUDY

Surviving Mission DriftHow Charities Can Turn Dependenceon Government Contract Funding to

Their Own Advantage

Roger Bennett, Sharmila SavaniLondon Metropolitan University

The widespread contracting out to British charities of welfareservices previously furnished by the state has resulted in manycharities operating in fields well outside those specified by theiroriginal missions. Challenges connected with charity missiondrift have received a great deal of (mainly negative and critical)attention in the nonprofit practitioner literature in recent years,yet no academic research has been completed into exactly howcharities respond managerially and operationally to govern-ment-induced mission drift. This empirical study attempted tofill this important gap in knowledge about charity managementthrough in-depth case studies of three charities known to haveexperienced substantial mission drift during the last decade,focusing on the styles and types of approach the organizationshad adopted in their dealings with government funding agen-cies. It emerged that the three charities accepted mission driftas a fact of life. Rather than simply supplying contract servicesto government bodies, the charities were highly proactive inseeking to initiate, direct, control, and assume overall strategicresponsibility for state-funded activities.

Keywords: charity, mission drift, contract funding, relationshipmanagement

Correspondence to: Roger Bennett, London Metropolitan University, BusinessSchool, 84 Moorgate, London EC2M 6SQ, United Kingdom. E-mail: [email protected]

MISSION DRIFT ARISES WHEN A CHARITY’S priorities and activi-ties are determined in part by external funders and, inconsequence, the organization’s operations then deviate

significantly from its original mission. Typically, the driving forcebehind mission drift is an outside funding body’s desire that acharity alter the scope or contents of its services to match moreclosely the funder’s requirements. The largest single external fund-er of British charities is the state; for that reason, concerns aboutmission drift are inexorably linked to the nature and extent of gov-ernment funding of the charity sector.

State Funding of British CharitiesIn 2007, the United Kingdom’s 170,000 fundraising charities had atotal income of £33.2 billion (National Council for Voluntary Organisations [NCVO], 2009). Thirty-eight percent of this incomewas derived from governmental sources. According to Seddon(2007), “certain charities are today all but dependent on the gov-ernment” (p. 1). By 2009, over 25,000 British charities were re-ceiving more than 75 percent of their revenues from a governmentbody (NCVO, 2009). This situation arose from the practice of gov-ernments outsourcing, under contract, welfare services to charities(Essex, 1998). Motives for governmental decisions to contract outsocial welfare have included charities’ expertise in specialist areas(Bottery, 2005; Grønbjerg, 1993); lower costs as a consequence ofthe presence of large numbers of unpaid volunteers (Cunningham,2001; Smith and Lipsky, 1993); and the “innovation and passion”of charitable organizations (Chau and Huysentruyt, 2006, p. 1909). The supply of welfare services through government con-tracts can have negative implications for beneficiaries, however, inthat the lower wages and other costs of charities may be associatedwith inadequate resourcing and poor administrative infrastructure(Brown and Kalegaonker, 2002) and the lack of professionallyqualified staff (Smith and Lipsky, 1993).

The growth of government financing of British charities has beenremarkable, rising from £1.85 billion in 1982 to (in constant prices)£4.2 billion in 1992 (Home Office, 2001). In 1985, 27 percent of thecombined income of British charities came from statutory sources; by1999, the figure was a third, rising to 39 percent in 2006 (Chew andOsborne, 2009). By 2006, 65 percent of British charities with annualincomes above £500,000 were delivering public services (Thomas,2007), mostly under contract. Grants (as opposed to contract pay-ments) fell from 52 percent of government funding of charities in2001–2002 to 38 percent in 2004–2005, while contract financing rosefrom 48 percent to 62 percent (NCVO, 2007). Grants fell further in2006–2007 to a level (£4.2 billion) that in real terms was lower than

218 BE N N E T T, SAVA N I

Nonprofit Management & Leadership DOI: 10.1002/nml

in 1999–2000 (Plummer, 2009). Conversely, contracts rose by 9.8 per-cent in 2006/7 (to £7.8 billion) (NCVO, 2009). In 2007–2008, the lat-est year for which data was available at the time of writing, contractsprovided 71 percent (£9.1 billion) of all statutory income to charities;grants provided just 29 percent (£3.7 billion) (NCVO, 2010).

Extent and Possible Consequences of Mission Drift

Half the respondents to a Charity Commission (2007) survey of3,800 British charities undertaking government contract work re-ported the existence of mission drift. The managements of just 26 percent of the organizations stated that they were not underpressure to conform to state funders’ wishes (Thomas, 2007). Fif-teen percent of the participants claimed that their charities en-gaged in operations outside their constitutional objectives. Onethird of the organizations relied on government contracts for morethan 80 percent of their incomes. For charities with annual in-comes exceeding £10 million, the figure rose to 67 percent. Criti-cally, only 12 percent of the respondents believed that contractpayments recovered all their charities’ costs; the commission as-cribed this situation in part to charities’ poor accounting practices,to their not accurately identifying the full costs of providing a ser-vice, and inadequate negotiating skills. A possible explanation ofthe willingness of charities to subsidize government contracts wasnoted in a North American study completed by Grønbjerg (1993):organizations can undercut bids submitted by rival charities andhence acquire more work.

On the positive side, contract work allows a charity to expandand to provide fresh ways of serving beneficiaries. Ramrayka (2010)noted how a charity that modified its mission was able to demon-strate its contributions to the country, to establish its credibility as aprovider of public services and to move closer to the attainment ofits wider vision, over and above its mission statement. Charitiesundertaking tasks outside their original missions keep abreast of newdevelopments in public policy (Grønbjerg, 1993) and sometimesgain access to political decision making (Smith and Lipsky, 1993).Nevertheless, the (mainly practitioner) literature in the field typi-cally argues that the effects of state-induced mission drift are unde-sirable. Three problems have received particular comment.

1. Possible distortion of a charity’s activities. Heavy reliance on gov-ernment contract funding might “undermine the ethos, auton-omy and character” of a charity, implying a “market basedapproach” that threatens preexisting internal cultures as an orga-nization “loses sight of its purely philanthropic role and refocuses

SU RV I V I N G MI S S I O N DR I F T 219


Contract workallows a charityto expand and to

provide freshways of servingbeneficiaries.

on making money” (Benjamin, 2007, p. 1). Priorities might bedistorted (Grønbjerg, 1993), and the specific services requiredcould result in a failure to assist the organization’s original andmost needy clients (Bruce, 2006).

2. Difficulties with donor relations. For government, a major bene-fit of the contracting out of social welfare services is that char-ities raise money from members of the public that can be usedto subsidize government contracts (Davy, 2007). Hencefundraising charities can offer their services at very low prices(LeRoux, 2005). Unfortunately, donors who realize that theirgifts are being used to subsidize government contracts might“think twice before giving to an organisation that seems to haveother ways of raising money” (Jones, 2007, p. 300). Accordingto Ramrayka (2002), members of the public are generallyunwilling to donate to organizations they regard as quasi-statebodies.

3. Possible financial destabilization. Failure to cover the full costs ofcontracts means that charities have to reallocate resources tosubsidize statutory work (Seddon, 2007), which leads, accord-ing to Fearn (2007), to excessive use of unpaid voluntary labor.Contract funding is often unpredictable (Grønbjerg, 1993), and,according to Smith and Lipsky (1993), “fickle government pol-icy” encourages charities, inappropriately and unprofitably, toundercut their rivals when bidding for contracts (p. 163).Uneven income flows from government sources could result ingreat financial instability (Benjamin, 2007). In a survey of 311charities completed in 2005, 16 percent of respondents allegedthat their charities would collapse if government contract fund-ing ceased (Gupta, 2005).

The StudyFor this study, charity practitioner publications, leading nationalnewspapers, and online BBC archives were searched for storiesabout the state funding of charities and mission drift, leading to theidentification of fifteen organizations. All fifteen were approached,and three agreed to participate. Information was collected throughtaped face-to-face interviews with five people in Charity 1 and sixpeople in both Charity 2 and Charity 3. The chief executive was interviewed plus the heads of fundraising and finance in each charity.Remaining interviewees were involved with various aspects of theircharities’ operations. Hence, all the interviewees represented expertcommentators (see Flick, 2006) on relevant issues. On average, theinterviewees had been in their current jobs for nine years and hadworked in the charity sector for twelve years (range six to thirty).

Participants were asked straightforward questions, beginningwith a request to describe any significant changes in the organiza-tion’s activities that had occurred during their association with it or



that they were aware had taken place previously. Then the interview-ees were asked why these alterations had taken place and their consequences, especially in relation to fresh challenges created, ben-efits experienced, and how the organization had responded to exter-nal pressures for change. In all three organizations, the otherinterviewees generally reflected the views of the chief executive. Datawere collected from the charities over a period of eight months,beginning in January 2009. Interviews lasted between 50 and 120minutes. Each transcript was coded independently by one of theresearchers, and then the other researcher checked the coding allo-cations for consistency. The data generated from the three organiza-tions was subjected to open, axial, and selective coding followingthe guidelines suggested by Neuman (1997).

Outcomes of the InterviewsCharity 1. Founded in the 1970s, Charity 1 was set up to supple-ment the U.K. probation service by providing counseling and finan-cial help to people recently released from prison. Income from statecontracts grew from 20 percent of total revenue in 1985 to 50 per-cent in 1991. In return, the charity was required to build and ad-minister accommodation for discharged offenders, to devise andmanage education and training programs for prisoners still in cus-tody, and (critically) to organize crime prevention as well as prisonerrehabilitation programs. By 2002, nearly 80 percent of the charity’sincome was derived from state sources, predominantly from theHome Office. Today the organization has a turnover of around £50million and employs about 1,100 full-time-equivalent (FTE) work-ers. The charity has extended its activities into the provision of gen-eral social housing (not just for ex-offenders) and to theidentification of at-risk individuals with respect to their potential in-volvement in crime.

Contract work broadened the scope and nature of the charity’scompetitive landscape, which now includes about 50 organizationsconcerned with the rehabilitation of offenders, several hundrednational and local crime reduction charities, and about 250 housingcharities that offer offender resettlement facilities. Recent contractshave included several multimillion-pound awards for housing acqui-sition and maintenance, probation service liaison contracts wortharound £1.7 million, training program development and deliverycontracts valued at about £2 million, and contracts for between £0.2and £0.4 million with numerous local government authorities forschemes designed to steer young people away from crime.

The charity’s current chief executive had been with the organi-zation in various roles for twenty-one years and has witnessed thepercentage of the charity’s total income arising from statutory sourcesincreasing from about 40 percent in 1988 to a peak of 85 percent in2000. In the 1990s, a dedicated team comprising the chief executive



The datagenerated from

the threeorganizations

was subjected toopen, axial, andselective coding.

and the heads of finance, operations, and public communicationswas formed to manage dealings with the Home Office. Taking onlarge amounts of contract work had enabled the organization to“outstretch its competitors,” the chief executive stated, as the char-ity became able to complete tasks in specific fields beyond the capac-ities of its rivals. However, contract revenues were used entirely tofurnish services to statutory bodies rather than to build overallcapacity. Initially, the head of finance commented, the charity wasdisinclined to become overreliant on state funding. This had provenimpossible, however, given the fact that management (and the boardof trustees) wanted the charity to expand and to offer its services tomore and more beneficiaries. Unfortunately, the head of finance con-tinued, periodic and sudden withdrawals of state funding had led tomany staff redundancies and on occasion had threatened the orga-nization’s very survival. Consequently, the charity’s managementcame to recognize that dependence on state funding necessitated acomplete reconfiguration and expansion of the charity’s activities inorder to enhance its attractiveness to government agencies.

In addition, management noted that government agencies werethemselves becoming increasingly dependent on the charity. As themagnitudes and complexity of the projects managed by the charityon behalf of the government had grown, so too had the strength ofthe charity’s influence on the planning and implementation of theseprojects. Often a state agency simply provided a basic idea, leavingthe charity to formulate detailed schedules and scenarios, preparebudgetary costings, determine employee skill requirements, and so on.In effect, the charity became responsible for implementing, main-taining, operating, and controlling a number of major state-fundedprojects with minimal input from the agency. A head of operationsin the charity commented on the intricacy of the typical governmentagency’s internal auditing and appraisal procedures. In his view, statefunders’ accountability controls were “so bureaucratic that they are unusable.” Officials in government agencies, he stated, were“more interested in ticking boxes than in the quality of services; theyspend so much time assessing each other and filling in forms thatthey haven’t the time to be creative and flexible and to come up withnew ideas.” As a result, the charity’s creativity was “very attractive” toagency employees.

According to the chief executive, the charity had substantiallyintegrated its operations with those of the Home Office (and associ-ated state agencies). Important long-term projects were jointly man-aged by the Home Office and the charity, with the latter making most ofthe crucial decisions. Moreover, people within the charity had acquireda deep knowledge of the funder’s organizational processes, preferences,and activities. The importance of maintaining good relations with gov-ernment bodies was transmitted and emphasized to everyone withinthe charity. Staff mixed socially with agency personnel, and theseinteractions were encouraged. All the comments of the interviewees



in the charity pointed toward the organization’s transition from sim-ply supplying services under contract toward it becoming a proac-tive solution provider and furnisher of total packages of servicesacross a wide range of fields outside its original mission. For exam-ple, the charity:

• Provided training to government agency staff• Decided overall budgets (rather than merely receiving and spend-

ing specified amounts)• Offered help in dealing with third parties• Provided specialist knowledge• Proffered advice on operations• Initiated proposals

The adoption of an assertive, proactive approach enabled the char-ity to help form the overall objectives of new projects commis-sioned by the government. Also, the charity was able to influencethe choice and definition of performance targets and evaluationcriteria before they were set in stone by state agencies.

The charity’s head of marketing noted that a problem withreceiving state funding was that, since crime-related issues were “notpopular with the public at the best of times,” any indication that thecharity worked “hand in glove” with the government (and hencewith the police, the courts, and so on) was likely to dissuade mem-bers of the public from making donations. Therefore, the head ofmarketing continued, fundraising advertisements did not mentionthe charity’s government associations.

Charity 2. Charity 2 commenced operations in 1988 with the mis-sion of furnishing support (e.g., counseling, recreational facilities)to the families of people (especially children) who had suffered acertain kind of brain damage. Soon the organization was beingawarded contracts by local government and the National HealthService (NHS), first in relation to the supply of patient amenitiesbut then in fields that extended the charity’s operations into theprovision of patient rehabilitation equipment and services, the ad-ministration of medical research, and the arrangement of assistanceto individuals with early symptoms of Alzheimer’s disease or withhearing difficulties caused by brain damage. None of these latter ac-tivities was covered by the organization’s original mission. Thecharity’s competitive environment currently includes a mixture ofgeneral disability charities that deal with brain damage and otherissues, general medical charities, and dedicated brain injury chari-ties. It now has about ninety FTE employees (including nurses andpediatric specialists) and an annual turnover of about £20 million.Two-thirds of the charity’s income comes from the NHS and associ-ated government bodies. Multimillion-pound contracts have beenprocured for the provision of occupational therapy, rehabilitation



The charity’scompetitiveenvironment

currently includesa mixture of

general disabilitycharities that

deal with braindamage and other

issues, generalmedical charities,

and dedicatedbrain injury

charities.

services, and outreach programs. Lower-valued contracts (usuallybetween £0.2 million and £0.8 million) are routinely obtained forthe training and support of carers.

As the state systematically withdrew from directly supplying ser-vices to children with brain damage, the charity developed a broadrange of capabilities and began to coordinate its work of a plethora ofthird-party external suppliers. Initially the organization had reliedalmost entirely on public donations, but by 1996 it was receiving 55percent of its income from statutory sources. The organization beganto make major purchases of medical equipment, typically to be usedonly on work contracted by the NHS. This led to rapid and sub-stantial growth, but the expansion was based almost entirely on gov-ernment contracts. The charity greatly improved its competitiveposition vis-à-vis other providers and became the “organization ofchoice” for state funders in the brain damage area. Accordingly, thecharity decided to “revisit its mission and to reposition its stated tra-jectory.” Role expansion had been welcomed and had been neitheraccidental nor haphazard. Rather it had resulted from consciousmanagement decisions. “We could assume total responsibility for theentire care process,” an operations manager noted, “and we soonacquired the necessary organizational skills.”

As the range of work expected from the charity under govern-ment contracts was extremely diverse, the organization respondedby deliberately engaging in as much joint planning and decisionmaking (including policy development) with the NHS as possible.The charity intermingled its service operations with those of theNHS and sought to pool its resources (infrastructure, staff, volun-teers) with those of relevant state agencies. Because the central government had increasingly required the NHS to adopt a “performance-based approach,” the charity began to employ thesame performance management metrics and reporting procedures asNHS departments.

The provision of consultancy advice to state funding bodies wasseen as a primary means for increasing the latter’s dependence onthe organization. The charity freely offered help and support on avariety of issues and services connected with the care of individualswith brain damage. Consultancy activities, according to the chiefexecutive, “develop our credibility, lead to deeper and better rela-tions, and draw us into projects that are very sophisticated.” Addi-tionally, the charity’s senior management routinely suggested newactivities to government agencies and possible improvements andalterations to existing projects. Employees of the NHS were invitedto “shadow” the charity’s medical and other operational staff as theycompleted their duties. The charity arranged training courses relat-ing to patient support in conjunction with government agencies.

As in the case of Charity 1, the head of marketing commentedon the difficulties for general fundraising created by the charity’sclose association with the NHS. Members of the public would not



want to give to an organization perceived as a department of theNHS, because the NHS itself was a part of the public sector and “peo-ple already support the public sector through paying their taxes.”Hence, the charity’s policy was to create and maintain an organiza-tional identity entirely different from those of state funders. Theorganization’s promotional materials did not mention that most ofthe charity’s work was completed under contract to the NHS andassociated agencies. Corporate donors were not informed of the sit-uation unless they specifically asked; if they did ask, they would betold that “contract work is a wonderful way of making the charity’sservices available to lots more people who desperately need the char-ity’s help.” The head of marketing noted that many companies hada policy of giving to charities favored by their employees and thusfeared “a backlash” were it to be revealed that gifts might be used tosubsidize state welfare provision.

Charity 3. Charity 3 began accepting government contracts shortlyafter its incorporation in the mid-1990s. At first, it provided adviceand counseling to young people who had been victims of sexualabuse and/or were drug users or were child prostitutes. In the earlyyears, between 10 and 15 percent of the organization’s incomecame from state sources. Statutory funding increased dramaticallybetween 1999 and 2004 as the charity executed contracts for pro-jects involving, among others, work and employment training foryoungsters with criminal records, work training for young peoplewith learning difficulties, provision of help to parents within dys-functional families, the management of sheltered accommodation,and the initiation of local authority community development programs. All these activities were well outside the organization’soriginal mission, which had been concerned solely with the provi-sion of advice and psychiatric counseling. The charity now com-petes for contracts against a number of large high-profile generalchildren’s charities that work in the child neglect and abuse area,certain healthcare charities, and numerous charities concernedwith juvenile delinquency.

By 2009, the charity employed 200 FTE workers and had aturnover in excess of £14 million, of which 65 percent came fromgovernment sources. Contracts obtained have varied substantially invalue ranging from, for example, a £13 million contract from theU.K. government’s Department of Children, Schools and Families tofund a three-year project involving the creation of access to traumatreatment facilities, through to a plethora of smaller contracts (typ-ically totaling £6 million to £7 million a year) for activities con-cerning healthcare, preparation of troubled young people foremployment, education programs (basic literacy and numeracy),therapeutic counseling, and housing support.

The chief executive of the charity readily acknowledged that theorganization had needed to move into areas not directly compatible



The charity’spolicy was to

create andmaintain an

organizationalidentity entirelydifferent fromthose of state

funders.

with its core mission. Undertaking contract work allowed the charityto expand into diverse areas but also led to its becoming highly sensi-tive to changes in state funding. A huge problem, the chief executivestated, was the short (one or two years) durations of most contracts.To cope with this, the charity had embarked on a series of measuresdesigned to deepen state funders’ dependencies on collaborative ven-tures with it, hence inducing state agencies to renew these one- or two-year contracts. “We had to engineer their dependence on us,” the chiefexecutive stated, because “that way we get more contracts.” Mecha-nisms adopted for achieving dependency included the extensive pro-vision (as in the case of Charity 2) of consultancy services togovernment funders, including consultancy advice vis-à-vis the con-struction and maintenance of quality assurance systems for programsconcerned with the management of vulnerable young people. Again inparallel with Charities 1 and 2, this charity took on the role of coordi-nating the activities of third parties that contributed to major projects.

A head of operations noted how the charity routinely proposedto state agencies new ways in which it could expand its role. Thesesuggestions were often accepted because of the “lack of strategicfocus” within government departments. The absence of long-termstrategies among state funders created many opportunities to per-suade senior people in contract-awarding bodies to change their fun-damental perceptions of the nature of child protection issues tomatch those of the charity’s managers. An important vehicle forachieving this aim was the organization and hosting at the charity’spremises of regular (that is, about once every two months) work-shops focused on particular child abuse and child protection mat-ters and to which government agency staff were invited free ofcharge. These events normally included an address by a well-knownperson (such as a show business celebrity or a senior governmentminister or opposition shadow minister), thus greatly enhancing thecharity’s status in the state agency’s eyes. In certain instances, the manager continued, the charity had succeeded in getting statefunders to change their productivity measures and their targets, evento modify their entire approaches to aspects of child protection work.

A senior management team met monthly to discuss fresh oppor-tunities for obtaining government contracts. Networking and social-izing with agency personnel was encouraged. The charity did notformally maintain files on key agency personnel, but, the head offinance noted, “we know all about them and take a keen interestwhenever there are staff changes, which happens a lot.” Queries fromstate funders received top priority and were dealt with immediately,even if this meant diverting resources from elsewhere. Funders’ pref-erences were constantly monitored; mechanisms for avoiding prob-lems in relationships with state agencies were applied (such as byproviding agency staff with lists of the personal home and mobiletelephone numbers of charity employees concerned with variousaspects of the organization’s operations).



The absence oflong-term

strategies amongstate funderscreated many

opportunities topersuade senior

people incontract-

awarding bodiesto change theirfundamental

perceptions of thenature of child

protection issuesto match those of

the charity’smanagers.

The charity’s head of fundraising shared with her counterpart inCharities 1 and 2 the concern that being seen to be “working for thegovernment” would damage the organization’s public fundraisingcampaigns. “We have to distance ourselves from that sort of image,”the manager stated. Promotional materials for fundraising campaignsdid not mention the extent of the organization’s government con-tract work.

ConclusionFigure 1 presents a summary of how the three charities dealt withundertaking roles and activities beyond the confines of their origi-nal missions. The managements of all three organizations recog-nized that mission drift was an inevitable consequence of acceptingsubstantial volumes of government contract work. They seem tohave adopted coping strategies involving four basic dimensions:

1. Proactive engagement with state agencies2. The provision of ancillary services to government funders3. Attempts at controlling the direction of projects4. The application of strategic account management



PROVIDE ANCILLARY SERVICES

PRO

AC

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ITY

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AT

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CC

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MA

NA

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ME

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TAKE PRIMARY CONTROL OF PROJECTS

Consultancy Workshops Training

Convey images ofsuperior expertise

Coordinate the activities of third

parties

Specify targets andevaluation criteria

Proffer solutionsto problems

Impose schedulesand workingmethods

Provide strategicdirection

Dev

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new

capa

bilit

ies

Sugg

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ation

SUCCESSFULLYACCOMMODATE MISSION DRIFT

Develop a deep

understanding ofstate funding

bodies

Netw

ork andengage in social

interaction

Carefully planand m

anagerelation-

ships Direct the thinkingand outlook ofagency staff

Con

stan

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the

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role

Off

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sha

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arit

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Figure 1. Coping Strategies

The first three of these strategies systematically increased a statefunder’s dependence on a charity for innovation, for the executionof complex duties, and for the dissemination of knowledge aboutparticular matters. It is relevant to observe that the outcomes to thestudy are consistent with prior research that has concluded that“problem-focused coping” is a common way through which organi-zations deal with difficult and changing circumstances (see Zeidnerand Endler, 1996). Problem-focused coping involves the expendi-ture of effort and the adoption of proactive strategies intended toimprove and master taxing situations that exceed the resources of anorganization (Callan, 1993).

The managements of all three charities treated their state fund-ers as “critical” clients and applied the techniques of strategicaccount management to their relationships with them (see Bennett,2008). Charity managers sought to acquire a deep understanding ofgovernment funders’ needs and organization systems (compareMadill, Haines, and Riding, 2007), to communicate frequently andextensively with individuals in state funding bodies (compare Ivensand Pardo, 2007), to plan the conduct and development of relation-ships with people in government agencies, and to ensure that thecharity’s activities visibly satisfied a government agency’s require-ments.

Several important lessons for charity management arise from thestudy. First, it appears that mission drift can have positive conse-quences for a charity. By undertaking contract work well beyond thescope of its existing mission, an organization can develop its com-petence, extend its capabilities, and become adept at building activ-ities into a “total package” (possibly bringing in third parties) to offerto government funders. Indeed, in the words of a head of operationsin Charity 2, role expansion consequent to accepting governmentcontracts in “unexplored territory” can impel a management to“refresh, reinvent, and reinvigorate” the organization. Another pos-sible implication is the desirability of adopting bold, forceful, andassertive approaches when dealing with state agencies. Arguably,charities should market themselves to government funders notmerely as contract suppliers of services but as expert providers ofsolutions to major problems, effective coordinators and controllersof complex projects, strategists, and providers of training and con-sultancy services.

Two further propositions emanating from the study are thatcharity managements should (1) become skilled in the art of strate-gic account management and (2) take care not to overemphasize thecontributions of government funders when constructing generalfundraising campaigns. The second of these suggestions could giverise to accusations of misrepresentation in regard to advertisementsand other promotional materials. However, none of the intervieweesexpressed any desire to mislead the public, only to respond to a



Role expansionconsequent to

acceptinggovernmentcontracts in“unexplored

territory” canimpel a

management to“refresh,

reinvent, andreinvigorate” the

organization.

potentially damaging situation and to maximize revenues. The Char-ity Commission itself has recognized that a charity’s close relation-ship with public authorities carries “reputational risk” vis-à-vispublic perceptions of the worthiness of an organization (CharityCommission, 2007, p. 21). Contract funding, especially if it isknown to be subsidized from other sources, could, the commissioncontinued, have a negative impact on “public perception over time.”Public concerns might be allayed perhaps if British charities were tomake greater use of donation options whereby supporters couldspecify in advance how their individual gifts are to be used—forexample, to build a particular shelter for the homeless; to implementa particular service, such as day care for elderly persons; or to under-take a particular ad hoc activity. To date this has not been normalpractice among British fundraising charities.

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ROGER BENNETT is director of the Centre for Research in Marketing, London Metropolitan University.

SHARMILA SAVANI is a senior lecturer in marketing at London MetropolitanUniversity.



Documents

Surviving mission drift: How charities can turn dependence on government contract funding to their own advantage