Martin Brookes - Chief Executive

As an economist with 15 years experience working in the public and private sectors, NPC represents a fascinating challenge. Analysis of charities is seldom the domain of economics, but I have rapidly learned that my background serves two valuable purposes. First, the world of charities can be analysed as a market like any other. This has helped in two large projects. NPC developed a template for charities to allocate their costs and price their services more accurately. Several concepts from microeconomics were relevant in this work and the result has become the standard across the charitable sector, been endorsed by government and accepted by the largest funders of charities. A similar project involved thinking about risk in contracts signed by charities, which introduced to the analysis notions of efficiency and risk sharing. The result has been a new policy framework introduced by the Home Office to improve funding of charities. These projects are aimed at ‘fixing the plumbing’ of the charitable sector, to help the market work more effectively.

NPC’s work can be seen in just this way – as trying to develop a better market for charitable funding. A market needs information about prices and returns to function well. NPC’s analysis of individual charities and sectors is helping develop these. In such work, the second aspect of being an economist is relevant. Economists are trained to peel away complexities to get to the heart of analytical problems. This discipline provides a powerful tool to the complicated and sometimes irrational world of charities. Such skills are enormously valuable when trying to understand the work of charities and the ‘returns’ from their work.

NPC’s approach to researching charities and sectors will be familiar to any economist from a commercial or public sector background; it is also easily grasped by academics. The work has similarities with that of economists or analysts in investment banks. A mass of confusing and imperfect data needs to be corralled into a coherent analysis and argument, requiring an honest input of judgement to hold it together. The key difference is that, rather than making inferences about economies of commercial markets using our skills, we make inferences about charities. We then present our findings to clients, much as analysts and economists in banks present to investors. At NPC we do this in order to help effective charities get better funding. This simple goal provides a wealth of fascinating questions and challenges which is enough to keep any economist or analyst fully occupied and engaged.

mbrookes@philanthropycapital.org

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