Tim Josss Inspiration series draws in lessons from beyond the arts. Here he examines the importance of charting your progress, keeping everyone in the picture and reveals how one organisation does all of this brilliantly.
Lets talk about your annual report and accounts. A tedious publication that no one reads? A periodic task weighed down by greater Charity Commission demands, and hints of more to come in this era of accountability and transparency? Or do you see it more positively: as that once-a-year opportunity to capture the essence of your organisation, tell the real story of the year, celebrate successes, and reveal and share lessons? But then, are you tempted to gild the lily in the text of the report?
The only hard data, verified by an independent auditor, is financial. But for an arts organisation, or indeed any third sector organisation, that information alone will fail to capture its essence. Social values in the broad sense artistic, wider cultural, educational and other social values are just as important. And, I suspect, you are becoming increasingly concerned about environmental values too.
Wouldnt it be wonderful if you could say this to your funders, supporters, audiences and all others with an interest? Dont take our word for it, we have evidence, independently verified, that shows that, last year, we were true to our values and really delivered.
This is what the triple bottom line is about; reporting and auditing the social and environmental as well as financial performance of an organisation. Before introducing my example, I have two words of explanation and reassurance. Firstly, measuring social and environmental impact cannot be reduced to numbers. As Einstein said, Not everything that can be counted counts, and not everything that counts can be counted. Secondly, redressing the balance in favour of the social and environmental is a developing science. A visit to AccountAbilitys website (www.accountability21.net) will give you a flavour. This science opens up a new language. Talking about social return on investment and the environmental bottom line liberates you from looking through a narrow financial lens. However, adoption of this approach will only take off if small organisations, like many arts organisations, are not overburdened during the set-up or when doing their annual reporting.
Leading by example
The Ethical Property Company (http://www.ethicalproperty.co.uk) is getting a lot right. Its business is developing and running centres that are focal points for social change. There are 12 across the UK at present including Brighton, Bristol, Leeds, London, Manchester, Oxford and Sheffield. One hundred and thirty tenants benefit from favourable rents, flexible and sympathetic management and facilities designed to meet their needs. They also become part of a working community where they can exchange skills and ideas under one roof.
The companys annual report and accounts have an authentic feel: its social, environmental and financial values ring true. For example, social performance measures tenant satisfaction, using six indicators and ethical purchasing from cleaning and security to telephone and internet lines. In each case, honest comparisons numerical where possible are made with the previous year. The 2006 report acknowledges that tenants thought synergy had declined slightly that is, the extent to which their work benefited from the presence of other groups in their centre. Environmental performance covers energy, water and carbon use with targets set by the Building Research Establishment, carbon emissions, travel to work, company travel during work hours and waste and recycling. And this is not a large organisation. Its 2006 turnover was £1.7m.
How you can get it right
There are three big lessons for the arts here. The first is that, so far, the social element of the triple bottom line has been defined in broad terms of community benefit. This broad approach will not work in the arts. As we know from current debates about the intrinsic value of the arts, artistic benefit and community benefit are not the same thing. Otherwise we could not distinguish immediate audience impact from artists more profound contributions to our lives or, to put it starkly, public interest and artists interests.
The second lesson is about grants. A grant-seeker is a supplicant. This new language of investment is different. It can empower the arts organisation and make for a better balance of power with funders. If it can demonstrate that it is generating real social return on investment, it has done something the funder cannot do itself: transform money into social benefit. And over time, sustained investment in an arts organisation is wealth creation: artistic, wider cultural and social capital. Isnt that exactly why the arts have been effective engines for urban regeneration?
The final point is about legal structure. I am not the first to say that the arts world must loosen up on its attachment to one legal model: the company limited by guarantee with charitable status. Social, environmental and financial performance is what matters whatever the legal structure plc or voluntary association, company limited by guarantee or community interest company. The Ethical Property Company happens to be a plc. The main point is that it performs.
Tim Joss is Director of the Rayne Foundation. Previously he was Artistic Director and Chief Executive of Bath Festivals, Bournemouth Orchestras Senior Manager, and an Arts Council Music & Dance Officer.
e: tjoss@raynefoundation.org.uk;
w: http://www.raynefoundation.org.uk