Charities have golden opportunity to increase their use of shared services, says Annodata

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Announcing its 400th customer in the Scottish charity sector thanks to the strength of its collaboration with the Scottish Council for Voluntary Organisations (SCVO), Annodata says persistent budget cuts and more competition for donations have given rise to new forms of collaboration in the back-office.

PwC conducted an extensive review of charities following the economic downturn in 2008 and has charted progress each year since. The latest 2015 research report shows that 34 per cent of charities collaborate in some way on service delivery, while five per cent report sharing back office functions. For Annodata, this growing trend towards greater collaboration between not-for-profit organisations and the sharing of back-office functions holds the key towards creating a more efficient and sustainable Third Sector, and should therefore be encouraged.

Commenting on the opportunity, Joe Doyle, Marketing Director at Annodata, said: "Our partnership with the SCVO means that we have seen first hand some of the challenges that the Third Sector has had to adapt to in recent years. Reductions in public sector funding, squeezed income from donors, and an increased demand for their services have radically changed the landscape in which they operate and necessitated the development of new operational structures. Many charity leaders have prioritised raising money and getting the best value in service delivery, so, to-date, collaboration has mostly occurred in these two areas. But, encouragingly, we are starting to see more charities sharing back-office services and infrastructure and, with levels of funding unlikely to improve any time soon, we expect this trend to continue.

"Back office services tend to have a uniformity between organisations – they all need print services, IT and other similar support – so it makes sense to combine these functions where possible. Working with managed service providers can make it easier for organisations to collaborate and secure better economies of scale. Without these additional and largely unnecessary overheads, not-for-profits can spend money where it's needed most" he added.

SCVO has played a critical role supporting Scottish charities by providing services ranging from litigation, payroll services, procurement, HR to consulting on improving charity performance. Its partnership with Annodata is a key relationship to improve efficiency in managed services across all types of charity.

John Ferguson, Director of Development at the SCVO, added: "Establishing preferred suppliers is an important part of our work to support organisational change in the charity sector, so that they can focus on what they do best - whether that's supporting the most vulnerable people in communities across the country or conducting cutting-edge research. Increasing the use of shared services in the charity sector in Scotland is an important objective for us."