Charity challenge

9 April 2013
In the grips of a recession where every penny counts, charities still lag behind the private sector when it comes to sourcing and managing suppliers. Despite the work of the Charities Sector Procurement Group promoting the benefits of cost savings and efficiency gains, the third sector is struggling to shake off legacy relationships and contracts that were negotiated without putting value front of mind. It’s not uncommon for people within the charity sector to equate the idea of procurement with the person 
who buys the stationery and uniforms. One challenge for procurement 
teams is their colleagues’ commendable, but sometimes misplaced loyalty to existing suppliers. A ‘suppliers know 
best’ culture prevails and there’s too much reliance on taking a vendor’s advice at face value and too little due diligence done to ensure the contract and relationship is working well for 
both parties. There’s a danger that for some charities the supplier holds all of the power and many assume that their relationships will roll-on indefinitely. Another reason charities may have lagged behind the private sector in embracing procurement is the lack of legislative and shareholder pressure. Charities are still very much focused on revenue and although the attitude to return on investment is changing, we are still driven by increasing funds rather than improving savings. Charity procurement teams often feel nervous about making changes for fear of alienating themselves internally. We often have to adopt a cautious approach, allowing our function to evolve and perhaps working with one department at a time to prove value. However, the sector 
is starting to make in-roads. At the RSPCA, we have successfully outsourced two functions: fleet vehicles to ARI Fleet UK and print to APS Group. These are considerable areas of spend, but were not previously treated strategically. There is no doubt that in charities, large and small, there is still a considerable amount of contract management rather than strategic procurement. The future of third sector procurement lies in harnessing bulk purchasing power. I’d like to see the appointment of a UK charity procurement leader to work with 
the heads of procurement across the 
sector to look at opportunities to save money and improve efficiency. This 
could deliver significant savings, helping 
to achieve everyone’s goal of ensuring 
as much money as possible goes 
towards charitable causes. ☛ Alethea Lavington is the marketing category manager at the RSPCA
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