We’ve all donated to charities at some point, but do we know where our donation is being spent? How effectively are third sector organisations able to leverage their procurement?
This article was originally written for, and published on, Novo-K.
A bucket in the street. A bake sale or coffee morning. A fun run. A phone call. We’ve all donated to charity at some point in our lives, and we frequently put our money down without thinking about where it goes to. But do you know how your donation is being spent?
With an ever-increasing number of charities in existence around the world, organisations need to be seen to be spending money wisely, or else donors could take their money elsewhere.
It’s not something that immediately springs to mind when you make a charitable donation, but charities and not-for-profit organisations rely on procurement teams in the same way as the public and private sectors. And the role that procurement plays for them is just as valuable.
Despite my experience working in procurement, and the countless conversations I have had with procurement professionals, I will admit to a lack of extensive knowledge on procurement in the third sector. I had also (mistakenly) thought that procurement might be less complex than in other industries such as manufacturing.
However, following some conversations, and giving the subject more consideration, it’s clear that there is just as much complexity as in any other organisation. It’s not just indirect procurement activities as people might think.
In many cases charitable organisations are looking at procurement of a range of services, highly complex machinery, chemicals and drugs, and even construction services for new buildings.
Fighting the Same Battles
I asked the Procurious community whether they thought that got the most from their procurement activities. What struck me was that these organisations face the same issues the wider procurement community, one in particular being maverick spending.
In charitable and non-profit organisations, as with procurement across the world, there is still the need to convince business stakeholders, end users and other functions of the value procurement brings to the organisations.
Traditional mind-sets of, “But we’ve always done it that way”, and “We’ve used that supplier for years”, exist in these organisations. You might think that convincing stakeholders might be easier for a charity – more procurement involvement means better deals, means more money to go on research or helping people.
All of this brings me back round to my original question. In truth, as a donor, I don’t really mind what my money is spent on, just that it is being used to support the charity’s cause. As a procurement professional, however, I feel that there is more that could be done to make this more transparent, and also to support these organisations when procurement is less mature or experienced.
There are a number of ways that procurement in charitable and non-profit organisations can be supported. In the UK, the Charities Aid Foundation provides various services on a pooled basis for smaller charities.
There are also opportunities for procurement professionals to work with charities and social enterprises on a pro bono basis. This is a great way for the organisations to access procurement skills, without having to pay for a full-time staff member.
Another option is to expand our procurement networks, getting as many people involved as possible. By creating global networks, procurement professionals can access a wide range of knowledge and experience.
If you have a procurement issue, the chances are high that someone else has dealt with it before. By creating networks, we can help create real value.
All this can help to raise the profile of procurement within charities, educate stakeholders to procurement’s role and value, and make a major difference to how (and how effectively) money is being used.