THINKPIECE: Come together to save on core support costs

Despite the growth of the voluntary sector and substantial investment by the Government, many charities still struggle to fund their work.

The press has been full of stories of major charities having to close projects and make people redundant. The pressure is even greater for small- to medium-sized charities.

Part of the reason is that donors don't want to fund core management costs. They prefer to feel the warm glow of having helped someone in distress.

So if we can't find enough donors to fund core costs, we must find innovative ways of cutting our core expenditure.

CEOs and managers will doubtless say that they are doing all they can. There is a lot of talk about mergers, for instance. Unfortunately, the publicity surrounding a potential merger often puts off trustees, volunteers and staff. Their organisation is special, and has a unique ethos that must be protected. The result is wasted time, cost and eventual failure.

Crisis and Shelter, Help the Aged and Age Concern, and Marie Curie and Macmillan Cancer Care have all been there.

But there are alternatives to full merger. Support services such as finance, training, direct mail, IT, office space, print services and many others are rarely special to particular charities. They could be shared or combined.

Examples exist of consortia, where one charity services another. But what if a number of charities were to combine and invest their expenditure in a new venture, a not-for-profit business that serviced these support functions for its stakeholders?

It might feel like a revolution to charities, but major companies with large numbers of brands have been working this way for years. So what is stopping this move? I suspect it is the conservatism of charity trustees, who feel unwilling to "risk

their charity reserves, for which they have a legal responsibility, on such a venture.

However, a business plan from a consortium of charities sharing this vision would show that charities spend billions of pounds on these core support costs. "Charity Services Ltd" would have the best talent and a ready-made market. It would leave charities to do what they do best - make their part of the world a better place for those of us who need it.

MIKE WHITLAM, CEO of the International Agency for the Prevention of Blindness

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