Five tips to save small charities money

With rising costs, falling income, and increased demand on services, small charities are feeling the pinch. The aftermath of the pandemic and the cost-of-living crisis are squeezing small charities as they face making difficult decisions to safeguard their future. So, with that in mind, here are some tips to help small charities save money.

 

 

Review your existing contracts

 

Look at all the existing contracts you have with external suppliers to make sure you’re getting a good deal still. Do you still need all of them? If you don’t, then call the company to say you don’t need the service anymore. And if you do, call other companies to compare costs to see if you can get better deals elsewhere.

 

You should review your contracts on a rolling basis. Look at your most expensive first and any that haven’t been reviewed for a long time.

 

The Charity Excellence Framework says to put robust processes in place to make sure that what you buy meets your needs and is cost effective. “Even for small purchases, shop around, find discounts and bulk buy to save money. For major purchases, competitively tender these.”

 

 

Manage your suppliers and purchases

 

Make sure you’re paying for something you need and that you’re getting a fair price. Always ask companies questions before signing a contract.

 

Have a written agreement in place to make sure what you’re paying for is what you ordered and that it’s delivered on time.

 

The Civil Society says charities should always read the small print on contracts and agreements with suppliers to avoid paying unnecessary costs. Also, make sure managers have control of purchasing decisions to keep costs down.

 

The Charity Excellence Framework says that charities which use a lot of suppliers should think about consolidating them to get better prices.

 

 

Go paperless

 

As well as the environmental cost of using paper in your office, it’s also expensive. This is both the paper you buy and the costs to have the paper delivered to your office.

 

Consider moving away from paper and shifting to digital.  You can store all the information you need on cloud-based platforms and use communication software.

 

Going paperless will help you to best use the money you do spend. Using digital tools will help you to automate processes, which will reduce the amount of tedious jobs that staff do. This will give staff more time to work on creative tasks, which will give you a better return on the investment of employees.

 

You may also want to consider moving away from printed newsletters and magazines for supporters and switching to digital newsletters. This will save on printing costs and reduce your outgoings.

 

 

Know your financial position

 

Set a budget for your charity and follow it. This will make sure you have realistic plans in place based on how much money the organisation currently has, and what it plans to raise and spend each year. It will help you to identify problems before they happen and in good time, and then you can decide what do about them.

 

Financial management software can help managers to monitor expenditure against budgets and identify places to make savings.

 

For information and advice about how to prepare a budget, have a look on the NCVO website. The Charity Commission also produced a guide in January 2023 to help trustees tackle difficult decisions about their charity’s financial position.

 

 

Reduce your energy use

 

The Government set up an Energy Bill Discount Scheme for businesses and charities that gives them a discount on their gas and electricity bills this winter. This started on 01 April 2023 and will run to 31 March 2024.

 

But there’s more that small charities can do to reduce their energy use if they have an office space.

 

The first thing to do is carry out an energy audit. Some energy suppliers offer free audits to help charities understand their energy consumption. You should use the results to make changes.

 

This could include using devices and equipment with better efficiency ratings. You may want to consider upgrading printers and kitchen appliances. For example, a water machine that heats and cools water will save energy in comparison with using a kettle and fridge for the same purpose.

 

Other ways to save on energy include switching lights off in an area or room when the office isn’t in use and turning off laptops at the end of the day rather than using the power down mode. You should also only boil as much water as you need when making a cup of tea or coffee.

 

Do get all of your staff involved in, and committed to, reducing energy costs. Inspiring people to make small changes to their behaviour could have a real impact on your energy bills.