It’s a tough time for charities – the regulations surrounding fundraising are being ramped up, all while prospective donors tighten their purse strings. The drive to ensure that charities achieve the best value for each pound donated is ever present, but inevitably there are unavoidable administrative costs associated with fundraising and donation processes. Over the years, many charities have turned to outsourcing to help keep costs down for these processes, and the press would have us believe that this road has been fraught with unscrupulous providers and that outsourcing has only resulted in damaging the charity's reputation.
As the years pass we are starting to see a more trusting relationship develop between outsourcers and charities but there is still much left to be desired. The National Outsourcing Association provided some uncomfortable reading earlier this year when their research suggested that 83% of failed outsourced projects were down to poorly managed relationships. This suggests a lack of experience between outsourcers and their newer audiences such as those in the Third Sector. The question is; to help both industries move forwards what obstacles need to be overcome?
Charities Positioning
All charities are born out of the desire to support a cause, and therefore as a business, each charity has a much stronger sense of its mission over other public and private sector firms. This is reflected in research which shows at a national level across all ranks and responsibilities charity employees are paid less that the average of all other industries. This would suggest those people working in the charities sector strongly support the cause they represent. Could this raise an issue however in attracting the best business minds to the industry? The kind of talent that would make every pound stretch further.
Unfortunately, they are the kind of questions the savviest donors among the public may ask, yet it’s safe to assume they would disagree to an increase in salaries also. Though for all involved in this industry there is little cause for concern, talent is rife, what is lacking is – back to the NOA research – an understanding of how relationships between charities and outsourcers should be and in many cases are.
The Offshore Argument
Companies from a range of industries have for many years enjoyed the benefits of allowing their outsourcing partners to send much of the work offshore, resulting in large cost savings. Even more beneficial is the hybrid approach using a mixture of both onshore and offshore processes. Yet Charities appear much slower in a move towards offshore processing, and it begs the question why? When every pound is so valuable why not make savings where possible? Is it a question of public perception or the sign of an industry moving slower than others? Charities often see themselves as different but fundamentally they are the same, especially when it comes to the endeavour of improving processes.
Finding the right outsourcer for the charity is key to solving this dilemma, trust needs to be in place between the two; trust that the outsourcer would advise which elements can or should be outsourced and which shouldn’t. If the task of improving relations and understanding between outsourcers and charities is completed, we may begin to see a shift towards offshore and hybrid outsourcing.
The Charity Perspective
The National Outsourcing Association recently ran a roundtable special interest group based on charities and their relationship with the outsourcing industry. Susan Monroe, Chief Executive of Freedom from Torture, passed comment on the event and outsourcing;
“The roundtable was a really useful thought provoking event in which I learned how other charities are maximising their impact by outsourcing. Freedom from Torture needs to find different ways to do things so that we can grow by 150% in order to be able to support every survivor of torture who needs our help. Outsourcing looks like a promising area to explore to allow us to achieve this growth and we are beginning to explore how this might work for us.”
This kind of reaction exemplifies the positive effect outsourcing can have especially with the support of organisations such as the NOA who are working to make it a more accessible industry.
Outsourcing Industry Comments
“When done properly, outsourcing works in every industry vertical and the Charity Sector is no different”
said Tom Quigley, Marketing Director for the NOA.
“Many outsourcing providers are experts at maximising efficiencies through obtaining economies of scale, mitigating risk, and leveraging technology and innovation to provide excellent service. What’s more, the best of them work hard to ensure that the needs of the end-customer are at heart of every process, transaction or interaction they undertake for their clients. Many also offer flexibility in contract terms, seasonal scalability to suit demand and genuine desire to partner for success. In an increasingly challenging economic and regulatory climate, outsourcing can be a seriously viable solution for charities.”
Conclusions
In what is a turbulent time for most given the general economic performance in recent years, add to that ‘Brexit’ and as ever we are all having to find new ways to adapt. Charities are aware of the difficulties they face in cutting costs and increasing donations, and to do that they may require the help of professional outsourcers. This will only happen with a continued effort between the two industries to improve relationships and awareness. The sun is rising on a new era for the Third Sector. Those charities that adapt to a new model will continue to add value to the millions of lives they currently support, hopefully for many years to come. Those that don’t may face an uncertain future, which would be disastrous for the communities that currently benefit from such worthy causes.
The National Outsourcing Association is holding its second Charity Special Interest Group (SIG) in association with DDC Charity Solutions on Weds 19th October in London. Click here to find out more information about the event.