Why a not-for-profit company needs to make a profit

In this vibrant voices podcast Fiona Philips talks to Chris Wright, Chief Executive of Catch22, the charity and social business. Chris explains Catch22’s distinctive approach to providing a variety of public services to improve the lives of 40,000 people every year.

In these excerpts Chris explains how Catch22 makes a real impact on the lives of those who use its services and running the charity as a business and making a profit means they can do more good.

Setting the agenda

Fiona: “How do you go about attracting funders to collaborate with you?”

Chris “The majority of our funding comes through us bidding for work.  There's a certain transactional element of that so we bid against tenders like any other business.  But also we try and shape opportunities by being seen as having a slightly provocative point of view, by trying to influence the agenda by writing about stuff, by demonstrating how we do things and how that might have an impact if it was done at scale. And then respond to opportunities as they come about and then try and retain the work we've got by being very good at delivery.”

The importance of partnerships

Fiona: “And what support do big companies offer to partners?”

Chris: “That's a really good question because we've built some really good partnerships with large corporates over the years.  We're currently involved in an interesting relationship with Barclays and clearly we've benefited from the support of Grant Thornton. I think we need to be encouraging greater social responsibility in our business community and I think we should be thinking more interestingly about how capital can be used and I think we've got too great a gap between the haves and have nots but that doesn't mean the system in itself is wrong, we just need to temper it slightly.”

Profits matter

Fiona: “What have you learned from running a social business as opposed to one for profit?”

Chris: “The idea that we're not for profit is a bit of a fallacy in itself, we can't run a business without generating a margin. And you know my chairman spends a lot of his time talking to me about how I need to be generating more margins, strengthen the balance sheet. The difference between us and for profit companies is any profit we make we can recycle and put back hopefully into doing more of the things that we want to do. No business will succeed if it doesn't work towards achieving that. In the charity world it's quaintly called surplus. I'm quite happy to call it profit.”

Learning how to run a business

Fiona: “What's the biggest lesson do you think you've learnt on your travels from public service as a probation officer to now running an organisation the size of Catch22? Where do you start? “

Chris: “12 years ago I hadn't got a clue about how to run a business. Before I joined Catch22 I was in a public body, I had a very large budget which was delegated to me on April the 1st and I was responsible for spending it. The biggest lesson I've learnt is that when you set a budget you have to achieve it and setting it doesn't mean you've got it. And I love all that actually because I think it changes the dynamic, it changes the emphasis, it makes you acutely aware of cost and I think it makes you realise that there's a relationship between input and output and it's much more real than in the public sector.”

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