Nobody ever got fired for buying IBM
Published by Kieron James in Wonderful
It was a phrase heard frequently in the 70s, long before acronyms like 'ICT' became fashionable and at a time when those with responsibility for corporate computer budgets were understandably nervous. Buying from 'Big Blue' was the safe option.
Wind the clock forward forty years and we see charities routinely under fire about how much they spend on fundraising. It's easy to see why purchasing departments are keen to adopt the same approach as their Cortina-driving counterparts of yesteryear. After all, if endorsing the market leading ‘giving platform’ is good enough for Cancer Research UK, Oxfam and The Salvation Army, why do things differently?
In fact, there are several reasons why charities – large and small - should be doing things differently to ensure they're getting the loudest and most appropriate bang for their fundraising buck:
Thanks to IBM (and others) doing our homework is much easier than it used to be. Nobody would suggest we have 'perfect competition' - a situation where buyers and sellers are so numerous and well informed that monopoly is impossible - but the Internet allows us to compare features, benefits and costs, share and read reviews and interact with other buyers in our sector. From envelopes to event fundraising pages; paper-clips to public relations and telephony to TV advertising, charities should be supremely confident that the deals they have in place are the best for their supporters and recipients. There is no excuse for complacency and charities should be happy to stand behind each and every buying decision.
It's standard practice to review supplier contracts. For large tenders this will take the form of regular Requests for Proposals (RFPs) where procurement bids are formally invited, but smaller, routine purchases also warrant an annual diary reminder to check the competition. Don't assume the deal you struck five years ago stands up to scrutiny today.
The pace of everything has changed. Innovation is rapid and new fundraising ideas are adopted quickly. But simply copying the models of bigger charities is lazy and prevalence is not always a good indicator of success. Cold-calling has its place and has been extremely successful in some sectors. Love it or loathe it, a creative PPI industry grew out of nothing and returned £24bn to the UK economy - a number which would be much smaller had it not been for outbound sales calls. But that does not mean cold-calling is always appropriate for our sector.
- Follow the yellow brick road (but turn on the GPS and traffic news). Once you've chosen a supplier, work with them to maximise return on your investment. Listen to feedback from your supporters (fundraisers and donors). Check in with everybody - and do so regularly - to develop your charity's relationship with the vendor; to offer input on how the product or service can be improved and tailored to your specific needs. And let your supporters know how wisely you're spending their money to raise even more.
Yet, as we edge closer to perfect competition (or at least perfect knowledge) charities continue to support a very large monopoly in at least one area of fundraising activity. Around nine out of ten fundraising pages (for runs, swims, skydives, treks, cake bakes and so on) are created with just one company - more than a million pages this year alone. Of course, this is a tried and trusted supplier; one which created the market and whose innovation should be applauded. But the pace of web and app development has made its service pretty homogenous and, other than the obvious challenge of facing down an 800 pound gorilla, barriers to entry are low.
After the recent press furore about financial transparency in the charity sector, how appropriate is a model which claims to improve fundraising efficiency by generating profit from Gift Aid (a tax relief scheme designed to put additional cash in the hands of charities rather than fundraising agents). Or one which takes directly from sponsors when donations aren't eligible for Gift Aid? Not least when 80% of users are unaware that it is operated by a for-profit business.
Fifteen years on, is now not the time to consider alternatives? Several exist (both profit making and non-profit). We think with Wonderful we’ve created the best possible alternative, one in which 100% of the donation and Gift Aid goes to charity.
Now, it's in the hands of the charities themselves.