Competing against the game
Competition has a lot to answer for
Competition, the theory goes, is good for consumers because it creates more choice and keeps prices down. The trouble with that for charities, is it’s a for-profit idea in a not-for-profit world: it doesn’t really make sense.
The equivalent would be for a homelessness charity to ask all of its rough sleeping clients to pitch a proposal for support; and then the homelessness charity chooses the winners based on how efficiently they used tents, or how much money they raised from street begging to leverage the charity support, or whether they seemed to be spending too much money on dog food, or sleeping bags.
See? A for-profit idea in a not-for-profit world: it’s the answer to a different question.
And yet, that is where we seem to have ended up: in a world where charities are responsible to the givers more than the receivers.
In our through-the-looking-glass world, we seem to have made charities accountable to the money, rather than vice versa. And because there is never enough money, the game of rationing is played using competition.
How on earth did we get here?
Charity, as an idea, has its imperfections.
Its positioning (including in the way charity law is written) is tilted not towards prevention, or systems change, but towards ‘relief’.
It positions charity as the best of us, saving us from the worst of us.
For charity, fixing the fallout of injustices we’ve built into economics and society is an uncomfortable place to be. The way economics is designed for companies to compete for customers, and profit, pushes as many costs as possible onto others: outside their responsibility.
And guess where those costs land? On society (and the environment).
Economics, of course, doesn’t want companies to re-absorb the costs they’ve just jettisoned, by making big contributions to charity or the state. That would undermine their competitive advantage. So charities never, and will never, have enough resources to repair everything.
And the solution to fix the fallout of economic competition? Competition of course: to ration the resources that will never be enough.
As soon as you frame something as a competition of course, then you need some criteria and some judges. And therein lies a power dynamic that is loaded with problems.
In this system, your incentive as a charity is to be polite, cautious, humble, even sycophantic, so you can win according to the rules of the competition. It seems unlikely to improve your case if you tell the judges that the competition, the system they’re part of, is broken.
“His generous impulse freezes within him if his power is challenged or his generosities are accepted without suitable humility.”
Reinhold Niebuhr, Moral Man and Immoral Society, 1932
Competition keeps charities, literally and metaphorically, compliant. It creates an ego-system, not an eco-system.
A competitive system doesn’t just incentivise self-censorship amongst charities, it can incentivise actual censorship:
The 2017 Tampon Tax Fund made grants available to (historically underfunded) women’s charities through a competition, on the condition they didn’t use it to campaign. So if you wanted to win a grant, you had to sign up to the ‘no campaigning’ clause
In 2020 the National Trust produced a report examining the relationship of its properties to the slave trade and colonialism. It explored how the proceeds of conquest and slavery built and furnished many country houses. After some spiky complaints from some right-of-centre politicians, it was investigated by the Charity Commission for breaching charity law. After rather a lot of culture-war yelling, and a year later, the Commission confirmed that the National Trust would face no regulatory action, having acted legally and responsibly throughout and, therefore, in charity law terms, and with no irony intended, was compliant.
In 2023, it was the turn of the Royal Society for the Protection of Birds (RSPB): accused of straying into politics after tweeting an angry response to plans to scrap water pollution restrictions for housing developments. Some MPs from the party of government called for the RSPB to be stripped of its charitable status for straying into politics. Remember, charity law frames charity as ‘relief’ and conspicuously states that politics is off-limits: relieve the system, don’t change it. The RSPBs chief executive apologised, interestingly keeping the apology to the manner of the response, not the substance of it
It's been the same story with the Runnymede Trust, Barnardo’s, Citizen’s Advice, myriad charities involved in probation contracts, and so many others.
Competition for money looks like it’s shrinking charities’ freedom to speak, and freedom to act; culture wars are weaponising legitimate scrutiny as a form of charity mute button. This is a system operating in failure mode.
What would you do if you were a charity leader? Would you turn down money to build solidarity? Would you temper your advocacy and campaigning to keep your competitive edge? Would you collaborate with competitors, or compete with your collaborators?
Would you be compliant, in order to be compliant?
Competition (mis)rule
Apart from the power dynamics, the censoring, and the relieve the system, don’t change it problems, what else makes competition the wrong idea for charity?
Burn-out is one of the most visible.
Competition tends to burn-out organisations and people.
It burns-out organisations because, in a competitive frame, charities are in an arms-race of promises to please the judging panels. The bigger the change you promise, and the more eye-catching, the more likely you might win. Got something transformational? Innovative? Scalable? Lots of points on offer there. It’s all about the points.
Funders make it sound like simple maths with criteria and points. The most points, wins. And yet, the process is almost always conducted in a black box: in the dark. Which is also how the feedback leaves you feeling. Even if the competition is a win on points, when the contract arrives to sign for your grant, there’s often little in it for your organisation: all the money is for delivering the project the funder wants to see. Overheads? Organisational costs? Sensible levels of pay? They’ll look inefficient. You’ll lose points.
Competition has incentivised over-promising and the hollowing-out of your organisation. And your funder, without a hint of irony or self-awareness, will maybe later offer support for you work out how to be more resilient.
Competition can burn-out people too.
In the not-for-profit sector, where people’s motivations are more human than financial, competition has a direct line-of-sight to poor pay and exhaustion.
The charity sector is not a manufacturing industry and most of its costs are people, so keeping costs down because of competition means under-paying people. And they’ll tolerate it because their motivations are to do good. They are not-for-money people, in a not-for-profit world. Competition makes martyrs of them. No wonder they burn out.
Competitive advantage, as a mental model, also creates conflict with the default-settings of charity people: things like collaboration, solidarity, relationships, giving. Competitive framing corrodes those things; stops them sharing. Competition implies differentiation. Unique Selling Propositions. Secret recipes. Information as power.
Competition drives a wedge between networks, relationships, and communities of practice. Going to work every day and behaving like someone you’re not, can burn you out pretty fast.
Competition is even starting to burn-out funders.
It’s just logical. If you’re a charity and the likelihood of winning the competition for money goes down, when the demand for your work hasn’t, the logical rational response is to enter more competitions. And, of course, your competitors do the same. And that buries funders under an avalanche of competition entries.
It’s become popular for some of them to check-out of the process altogether: call a time-out, before they burn-out. And, guess what? When a funder calls a time-out, and the pool of funders and funding goes down, competition for the rest of the money goes up. Sometimes, in a competitive frame, you reap what you sow.
Funders calling a time-out in a time of peak demand is hard to understand, some might say self-indulgent. What happened during Covid was the opposite. Demand went up, funding went up too, and competition was dismantled for a while. How quickly we forget.
Maybe the Covid analogy helps in another way: funders calling a time-out is a little like a hospital declaring a major incident because the demand levels are going to cause its functioning to collapse. Except it’s different in one significant respect: the hospital doesn’t take time off to think about how to meet the challenge, precisely because demand levels are high, and because people will go to other hospitals (and they might need to declare a major incident too), and because some people will die. The parallel with charities and funders is clear enough.
Maybe, if the system is perfectly designed to produce the results we see, we are simply getting the competitive world we’ve designed but don’t deserve:
democracy reduced to a periodic competition for votes;
collective purpose replaced by competitive, trickle-up economics;
our common humanity possessed by trying, and failing, to balance competing private interests;
charity masquerading as a competitor in a game it can’t win and doesn’t want to play.
Competition has a lot to answer for.
