Charities overpaying for IT as ‘unscrupulous suppliers’ take advantage of Brexit confusion

Excessive mark-ups blamed on Brexit confusion and unscrupulous suppliers costing charities

Austin Clark | 11th Oct 17

A new study has found that charities could be paying over the odds for IT products thanks to excessive mark-ups blamed on Brexit.

According to the IT Margins Benchmarking Study, an annual report published by KnowledgeBus, charities are paying an average margin of 26%. However, in one case, a charity was charged a whopping 1,165% margin.

Best procurement practice, as guided by the Society of IT Managers, states buyers should not pay more than a 3% margin.

Commenting on the report’s findings, Al Nagar, head of benchmarking at KnowledgeBus, said: “Although there was a period of rapid inflation in the tech market not all prices increased. Some product prices stayed the same and some went down. But what we witnessed was unscrupulous suppliers taking advantage of the perception that price increases were going up across the board.

“Many organisations – without the tools to check what was really happening in the market – were caught out by these actions.”


The cheapest option

Many of the largest tech companies in the world donate software to UK registered charities through the tt-exchange donation programme run by Tech Trust. Charities can register to access software donations for free and only pay admin fees per licence received, which is usually around 96% under market costs.

Microsoft, Adobe, Symantec and a range of others all list products that they make available to charities. More than 30,000 charities have made use of the programme to date, but Richard Craig, CEO of Tech Trust, says this is not enough.

“We’ve been running the donation programme for over a decade and are constantly adding new partners and hitting new milestones, but there’s still a long way to go until we can say we’ve fulfilled our mission and can go home.”

“The donation programme really is a no-brainer for charities – it takes away the pressure of relying on old systems that aren’t fit for purpose and allows charities to focus on what’s really important. We’re happy that we get hundreds of new charities registering each month, but seeing as the programme would help the vast majority of the c.260,000 charities in the UK, you can tell that the majority still aren’t making the most of the resources available to them.”

Charities can register for the tt-exchange donation programme for free here.