Reducing Charity Expenses & Operating Costs
Despite growing financial pressures, the latest data from the UK Giving Report reveals Brits donated a remarkable £13.9 billion to charity in 2023 – a record high and a £1.2 billion increase from 2022. This is fantastic news for charities, yet it doesn’t change the reality that many organisations still face significant challenges keeping expenses and operating costs in check.
From hospitals and healthcare organisations to animal welfare and environmental groups, strategic cost management is essential for all charities aiming to maximise their impact. Whether your organisation is feeling the financial pinch or simply looking to proactively stretch resources, read on for practical strategies to help reduce charity expenses across the board.
Money well spent? A closer look at charity expenses
Many patrons assume that when they donate to charities their contributions go directly to the cause. However, this isn’t always the case. To operate effectively, charities must cover a wide range of expenses, including employee salaries, tech solutions, marketing and more. These types of expenses can chew through resources at an alarming rate. This is why most charities operate under tight budget constraints and are continuously on the hunt for new ways to pinch pennies.
A recent press release issued by the Charities Aid Foundation (CAF) revealed just how serious the charity operating costs issue is, with energy bills cited as one of the biggest, budget-draining expenses.
“The relentless financial pressure on charities is continuing. Many are unsure how they will survive from month to month. Tens of thousands of charities are at full capacity, and sadly this means many are having to turn people away, people who desperately need their support,” says Neil Heslop OBE, Chief Executive of the Charities Aid Foundation.
Tips for cutting charity expenses
There’s no getting around it – budgeting is a major headache for most charities, particularly in the face of soaring demand for services. So, what’s the solution? In a sector where every donation counts, even small changes can make a genuine difference. Here’s a closer look at some practical strategies to reduce charity operating costs.
Adopt smart tech
Smart tech solutions aren’t just for blue chips. For charities, they can drastically reduce operating costs. One example is Voice over Internet Protocol (VoIP), a technology that allows charities to make phone calls over the internet. Instead of being charged per call, VoIP systems adopt a plan-based model that standardises monthly phone bills while supercharging communication.
The savings are significant, with the average VS Group client saving 30% compared to traditional, landline-based systems. The bottom line? Innovations like VoIP can cut charity operating costs and leave you with more money to direct towards the causes you care about.
Improve energy efficiency
Making energy-saving changes can significantly cut costs for charities while boosting environmental credentials. Simple steps like installing energy-efficient lighting and adopting renewable energy sources not only reduce utility bills but shrink your charity’s carbon footprint.
The CAF recently confirmed adopting energy-saving measures is front of mind for British charities, with more than 30% of respondents planning to invest in long-term energy efficiency improvements moving forward.
Outsource non-core functions
Subcontracting charity expenses like IT support, payroll and accounting can be more cost-effective than hiring and maintaining in-house teams. Even better, many service providers offer packages tailored to the needs of charities. This means you can save on overheads and enjoy peace of mind that critical tasks are handled professionally.
Score free and discounted services
Brits love their charities, and this sentiment is echoed in the free or discounted services offered by numerous organisations. For example, high-profile software companies like Adobe, Canva and Hootsuite provide reduced rates or free versions of their products to non-profits. For cash-strapped charities it pays to actively seek out these opportunities.
Engage volunteers
Volunteers are the heart and soul of many charities and represent a valuable opportunity to reduce staffing costs. By developing robust volunteer programmes and providing hands-on training, you get the most out of your charity’s volunteers and empower them with the knowledge and skillsets to effectively support various organisational functions.
Go digital
Doorknocking isn’t the only way to drum up funds and raise awareness. In today’s internet-driven age, digital platforms can be used to streamline fundraising efforts and reduce charity expenses associated with traditional campaigns. From social media to email newsletters, leveraging digital tools can be a terrific way to reach a wider audience with minimal financial investment.
Negotiate better rates
If there’s one thing charities excel at, it’s stretching every pound like it’s an elastic band. This attitude should absolutely extend to bills. Don’t simply pay invoices without a second thought. Instead, consider negotiating with suppliers and service providers to secure better rates. This could involve long-term contracts for utilities, office supplies or other services that can be provided at a discount in exchange for regular custom.
Share resources
In some cases, partnering with other charities or non-profits to share resources can help reduce costs. This could include anything from sharing office space to bulk purchasing supplies to take advantage of economies of scale.
Stretch your budget further with VS Group
Communication is the lifeblood of any charity, whether it’s coordinating volunteers, reaching out to donors or providing services to beneficiaries. Regardless of the sector, maintaining clear and cost-efficient communication channels is crucial for charitable organisations. One modern solution that can significantly aid in this area is Voice over Internet Protocol (VoIP).
The benefits of VoIP for charities
- Cost savings
Traditional phone systems often come with high charity operating costs, including line rental and long-distance charges. VoIP eliminates these expenses with fast, crystal-clear internet-enabled calls that don’t compromise on quality.
- Flexibility and scalability
VoIP systems are incredibly flexible and can be scaled up or down to fit your charity’s needs. This is especially useful for organisations that see seasonal fluctuations in demand. For instance, many charities receive a surge in donations during the Christmas period. With VoIP, you can easily upgrade your plan to handle the extra activity, without any hassle or disruptions.
- Next-gen features
Best-in-class VoIP packages come with additional features tailored to the needs of charities. Think call forwarding, voicemail to email and video conferencing, at no extra cost.
Finding the right connectivity deal
VoIP and internet connectivity go hand-in-hand, so it makes sense to shop around for a good internet service provider. Here are some things to consider when choosing a connectivity provider:
- Reliability and uptime
Every VoIP system should be underpinned by a reliable internet connection. Speed and processing power are essential for the smooth operation of VoIP systems and other online activities. Look for connectivity providers with a proven track record of uptime and service quality.
- Cost and value for money
Comparing different providers and their packages can help your charity lock in the most cost-effective solution.
- Customer support
Hands-on customer support is non-negotiable. Vet providers carefully and choose one with a reputation for responsive customer service.
Additional strategies for trimming costs
The savings don’t stop with VoIP. Here are some other ways to tackle charity expenses and operating costs head-on.
Migrate to the cloud
Cloud computing offers a flexible and budget-friendly way to handle your charity’s IT needs. Moving to cloud-based solutions can cut the expenses tied to maintaining physical servers and IT infrastructure. Just like VoIP, cloud services are scalable, so you only pay for what you use. This makes it a smart and cost-efficient choice for any charity.
Automate administration
Charities can save both time and money by automating administrative processes. Tools like customer relationship management (CRM) systems, accounting software and project management platforms are an investment but help to streamline operations, cut down on manual data entry and reduce overall operating costs. Automation also allows staff to focus on more strategic tasks, like developing impactful fundraising campaigns, building partnerships with other organisations, creating innovative programmes and engaging more deeply with donors and volunteers.
Launch green initiatives
Adopting green initiatives can unlock long-term cost savings, not to mention big-time environmental kudos for your charity. Simple measures like reducing paper usage, implementing recycling programmes and encouraging remote working can cut operational costs. Seeking out grants and incentives for sustainable practices can secure even more savings.
Plan and budget
Smart financial planning and budgeting can make all the difference when it comes to minimising charity operating costs. It pays to regularly review your charity’s budget to identify areas where costs can be reduced. The keyword here is ‘regularly’ as spending can be dynamic. Setting clear financial goals and monitoring progress can help you allocate resources more efficiently and keep your charity on track financially.
Focus on training and development
Investing in staff training and development can streamline operations and as a result, reduce charity expenses. Well-trained staff are more productive and better equipped to handle their responsibilities, which can reduce the need for external consultants or additional hires. Providing ongoing training opportunities also helps retain staff and minimise the costs associated with turnover.
Slash spending with VS Group solutions
No matter what your cause, whether it’s supporting mental health, providing education for underprivileged children, protecting the environment or helping the homeless, maximising your resources is key. VS Group can help slash your charity expenses and unlock genuine savings with technologies like VoIP. Reach out to the team today on 0330 094 0170, email us at info@vsgcomms.com or submit your details online to find out more about how VS Group can empower your charity to achieve more, with less.
