Digital among services small charities could save on: survey

Survey suggests that combination of time lack and lax governance causes many small charities and charitable bodies to spend more than they need to by not shopping around for basic support services like telecoms.

Chloe Green | 5th Jun 18
Image of person finding money down the back of the sofa. A survey of small charities has found that because many do not shop around they are paying more than they need to for basic services, including digital services.

Some 40% of the UK’s small charities are losing around £1,200 a year in operational cost savings because they ‘lack the time’ to seek better deal alternatives to their incumbent suppliers of basic services such as digital support, insurers and energy companies.

The online Small Charity Health-Check Survey conducted among 125 small charities by financial advice website Back of the Sofa found that when it comes to switching to money-saving options across a range of service suppliers, inertia and resource constraints lead to charities paying out more than they might need to. It found that:

  • 40% pay ‘uncompetitive rates’ of 14p-25p per unit for electricity.
  • 19% don’t know if they are tied to a business or residential telecoms contract.
  • 75% allowed their insurance to digitally renew without shopping around for a new policy premium.

Other findings in the Back of the Sofa survey point towards a lack of time to deal with financial tasks:

“Small charities are often held back because they lack the resource to make informed money-related decisions,” said Nick Heath, Founder at Back of the Sofa.

“The time and effort perceived to research non-essential alternatives leads to a ‘better the devil you know’ attitude and misguided loyalty towards existing suppliers. Fortunately for those involved in the finances of charities, there are short-cuts that can be taken to tackle this and platforms – like Back of the Sofa’s – to signpost them.”

Heath added: “The irony of encouraging market competition is that customer longevity now simply dictates how much extra suppliers think they can get away with charging to subsidise their new customer offers – and the more that essential services become auto-renewing, the more important it is to question any price rises.”

“This isn’t just about traditional utilities anymore, but a widening range of digital subscription services, from mobile communications contracts to website hosting – and even how charities process online payments and donations.”