Charities are learning how to become more businesslike

Do charity workers need business training? It was Eva Peron who said that keeping books on charity was capitalist nonsense - she just used money for the poor, and didn't stop to count it. But that's an attitude that wouldn't cut much ice now, as charities become big business.

They are highly competitive, and the calibre of people running large organisations across international boundaries matters. It's increasingly accepted that voluntary and community organisations, VCOs as they are now known, need to do more to attract and keep top-quality managers.

And some are even putting employees through MBA programmes to ensure that VCO workers, traditionally wary of business techniques, are up there with the best when it comes to knowledge and efficiency.

Paul Mylrea, head of media at one of the biggest players, Oxfam, is one of the new breed of VCO workers who appreciate that while the charity and business worlds may seem superficially at odds, cross-fertilisation benefits both. He recently graduated from the Open University MBA course with a distinction, and is now a keen advocate of business courses, travelling to give seminars for the OU on how charity and business can, and should, be made to match.

Previously sceptical, he became a convert when he was asked to make a career change in his previous job, at Reuters news agency. "I'd been a foreign correspondent, then a lobby correspondent. But I was asked to take on an additional challenge. A web service for disaster relief charities - intended to help them use Reuters' expertise in communications to get their message across - needed sorting out. Instead of being just a journalist, I suddenly became a technical project manager, a fundraiser, PR consultant, strategist and designer," he says.

"I decided that people must have faced the challenge of keeping all these balls in the air before, and if I could learn from them my life would be easier. I looked around, found the Open University MBA which gave me an approach I liked and meant I could continue working. The course did help. I was much more confident in speaking to the Reuters board and external investors . They were also more comfortable talking to someone with the right sort of knowledge."

The website - - became an online community of more than 180 global charities and won the Association of MBA's Business Ethics prize. But after 20 years at Reuters, Paul decided to move on, and now runs the media for Oxfam in Britain. His OU course allowed him to study development management as a final module, giving him, he says, invaluable insights into managing in the public and not-for-profit sectors.

He's keen that the commercial and voluntary worlds overlap more. Voluntary work increases potential by broadening experience, he points out. That is increasingly the case as top jobs require not only breadth, but international experience, something that it may be possible to pick up in the charity sector. Oxfam has been running a scheme to attract senior HR managers to work for the agency either in permanent or temporary postings.

It has been so popular over the last couple of years that hundreds have applied - including senior managers from FTSE 100 companies. It is now setting up a database of senior managers to do interim assignments. They are now looking for someone to work in Angola, overseeing a change management programme. "In the past, people used to have a successful career, then move to voluntary work," says Mylrea. "That needn't be the pattern now."

In the VCO world, there aren't enough good applicants for jobs and where there are, skills aren't always developed. In a recent National Employers Survey, 8 per cent of organisations said they had vacancies that were hard to fill. In the voluntary sector, that rose to nearly 50 per cent.

Professor Ian Bruce, director of the Centre for Charity Effectiveness at Cass Business School in London, says that charities have to improve their record of offering opportunities and developing talent, rather than relying on other sectors to do it for them. "It can be difficult in smaller organisations with less money. Yet, in fact, we find that a lot of small charities are spending money to educate and train. Of those attending our MA courses, half are from organisations with less than £500,000 turnover a year. But there are a lot of larger charities spending a pittance on training."

VCO workers can of course find the business world off-putting. "In business, it is assumed the more you sell, the more profit you make," says Bruce. "In our world, of course, the more services you deliver, the more money you lose."

The apparent mismatch has led to Cass to developing its own courses tailored specifically for the VCO market.

Other business schools are adapting. Jane Hatfield , head of development at the National Council for Voluntary Organisations (NCVO), has just become one of two VCO managers to be awarded Cranfield Trust scholarships to study part-time at Cranfield School of Management.

"We've just started operational management and that's been very interesting for me in trying to work out whether we in the voluntary sector are being efficient, and using the best processes, in the same way as the manufacturing sector," Hatfield says. "But sometimes, the course takes a bit of translating to make it relevant. Cranfield is realising the need to adapt some materials."

"One of the differences in the voluntary sector is that values are the primary drivers," says Mylrea. "Each person cares passionately about what they are doing, but you can only make improvements in the lives of poor people if different organisations with different aims come together for a purpose. That's harder than business partners working together to win a bigger market share."