CCS is the largest public sector purchasing organisation and delivers market leading commercial vehicles to all areas of the public sector. Charities form an important customer base that can utilise the commercial arrangements put in place by CCS to generate savings and efficiencies. The commercial benefits delivered via CCS can then be used to fund the life changing work that charities deliver every day in the UK and across the globe.
Charitable organisations come in all shapes and sizes and this piece hopes to give the reader an insight into the commercial processes of a small to medium sized UK charity. Gaining customer insight is a key step to ensuring that CCS offers a customer journey that caters for the needs of all potential customers. Increasing CCS’s footprint in the charity sector will allow charities to focus on their core objectives and deliver more socially beneficial outcomes.
School of Hard Knocks (SOHK) is a UK charity that delivers education and training to adults and children most in need. The charity was featured on Sky Sports for a number of years in a show where former international rugby players mentored groups of adults that faced significant challenges. The mentoring was delivered through a mixture of on the pitch training and classroom activities. SOHK achieved significant success and has grown to deliver programmes across the UK to both adults and children with life changing results.
SOHK adult programmes deliver life and employability skills such as goal-setting, anger and fear management, CV-writing and interview preparation. The unique SOHK psychology, developed through a mix of gym or pitch based learning and classroom sessions, helps people overcome the barriers that stand in their way. It focuses on the 5 Cs of confidence, communication, commitment, cohesion and control.
The SOHK delivers courses to pupils aged between 13 and 16 that have been subject to exclusion in the past and demonstrate persistent disruptive behaviour. The courses look to embed positive behaviours and life skills by being introduced to the game of rugby and its values alongside group workshops and personal mentoring.
Operating a charity that delivers services across the UK is challenging. Running a charity requires focus on areas which are not related to the organisation’s core service delivery such as procurement and financial management. A charity’s underlying cost base is central to its ability to survive during difficult economic conditions and agile sourcing measures offer the opportunity to reduce the costs.
SOHK Chief Operating Officer, Jack Lewars, offers his insight on procurement and commercial practices of a charity in the UK. This insight into how charities operate in the UK in invaluable to CCS. It will aid the specification of commercial vehicles and the delivery of routes to market that feature a customer journey that is attractive to other similar charities.
Most charities and their staff are highly focussed on the charity’s mission. As a result, procurement and commercial processes are often an afterthought – but they are obviously incredibly important in running a successful organisation.
Once a charity grows beyond the ‘small’ stage (usually defined as reaching at least £100k in turnover), there will definitely be efficiencies from good procurement. These can help the charity’s bottom line, if they use procurement portals or employ regular suppliers. Most organisations are keen to move beyond the start-up phase when even the CEO has to fix the printer, after all.
Two key challenges present themselves though. First, staff responsible for the commercial side of a small charity may have multiple roles and so may only focus on commercial activities in short bursts. This means that they crave simple solutions – a ‘one-stop shop’ for a certain type of good or service; or a company which will do an end-to-end solution in one area for a reasonable price.
The second major challenge is cost. Charities are under enormous pressure to keep overheads as low as possible. They are required to publish their spending on overheads each year and many funders and individual donors want to know the ‘frontline spending rate’ of charities before supporting. This actively encourages charities to see overheads as a de facto evil.
This pressure is never applied to commercial organisations. They either make a profit or don’t – I have no idea what proportion of the cost of an iPad goes on staff salaries, renting the Apple store or buying raw materials. But it is a key consideration for charities when trying to win funding in a competitive market-place.
Charities, therefore, will constantly weigh the benefits of a service against its raw cost and can find it hard to justify spending because of its long-term return on investment. Commercial solutions for the charitable sector therefore need to offer highly competitive pricing – almost always at a discount that can’t be accessed on the open market. After all, if we could buy a laptop from Amazon as cheaply as on In Kind Direct, we would take the path of least resistance and all the advantages of Amazon’s gigantic scale and ultra-slick processes.
Everyone would love to create a highly efficient, incredibly competitive online marketplace, of course, and clearly it is easier said than done. However, my experience of procurement and commercial portals for charities has almost universally been that they miss one or both of these targets by a substantial distance. Many are incredibly convoluted to join, with clunky user interfaces and frequent bugs. Others offer negligible discounts against commercial competitors, with none of the advantages of a well-established online store.
Ultimately, therefore, what charities want is the same as any business – a quick and simple process and decent value. That way, we can be more efficient in our non-frontline functions and ultimately, deliver a better and more efficient service to our beneficiaries at the coal face.
For more information on the great work that SOHK deliver and how you can get involved please access their website here.
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