Gillian Donald advises charities to take a brave step back and decide whether or not they could be more efficient

“Progress isn't made by early risers. It's made by men trying to find easier ways to do something," said Robert A. Heinlein - this is good advice for charities today.

Charities have gone through a hard time of late, with the recession biting at both ends – firstly in terms of falling or unpredictable donation levels, and secondly, with continuing public sector funding cuts. The net result is a sector under real pressure to maintain the crucial services and support it offers to an often vulnerable or remote client base, whilst at the same time keeping its costs to a minimum.

Taking a large step back can benefit a charity enormously, even in the simplest of areas, and progress really can be made.

Gillian Donald

Unfortunately, it looks like this pressure won’t be releasing anytime soon. So, it’s down to charities to shine the spotlight inwards, and see, if by increasing efficiency and identifying innovative ways of making savings, they can continue to function and grow. In many cases, there is much that can be achieved by simply unlocking the hidden resource within.

Organisations in the third sector have always been open to new ideas, and now it’s no different. Many are working smarter, not harder and as a result are enjoying a whole new lease of life. These are the organisations that have implemented good practice to make themselves more efficient, and have consequently maximised the resources available for their charitable purposes.

Innovation comes in many guises, and can revolutionise operations, service offerings or internal ways of working – all with an eye on the bottom line. After all, the more charities can save, the more resources can be used for front-line service delivery.

However, it’s not all about cutting back – there are many ways to improve the efficiency of organisations, and many have successfully saved money as a result. There are some key questions that charities should ask themselves. These include how do we do things, what steps are involved, can we remove some of these steps but still achieve the same outcome? By taking this approach, some charities have been able to recruit more staff, yet save money.

A childcare charity we worked with was looking to implement a new finance system, however, before doing so they wanted to ensure they were making the most effective use of their current resources. A review identified unnecessary activities that were being carried out by staff, such as producing spreadsheets in addition to the existing finance system. This meant that data was entered twice; not a very effective use of staff time, nor the charity’s resources.

A Scottish higher education institution reviewed its entire student recruitment process, from the first look at its website to the candidate’s first day on campus. This review allowed the institute to understand what potential students were ultimately looking for and how they could meet these needs. For example, the institute was investing money sending staff around the world to interview potential candidates and to sell the institute to them. However, it turned out that they were failing to send the correct staff. Students stated that they chose the institution based on who they would work with, and the reputation of its lecturers, yet the institute was sending support staff to meet students - not those who students ultimately wanted to meet and work with. Following a review, the institute now sends out more high profile staff who are more likely to attract students.

Another charity developed its procurement functions so that its arrangements were alighted to best practice across every area. However, on closer inspection, it turned out that by constantly striving for best practice more akin to a far larger organisation, it was actually detracting attention away from its service delivery. Gold standard isn’t necessarily appropriate in every case – especially for a five-person function.

A review resulted in new staff being taken on to replace a reliance on temps, tightening of spending controls and a move away from costly wastage. As a result, the charity procurement function is far more efficient, appropriately staffed and run, and better placed to deliver its services.

Stepping back, some would say it’s only a brave organisation that instigates a comprehensive review of its functions. However, this is not true, it is also one that is committed to making sure the organisation is run in the most efficient and effective manner, and is delivering the best possible outcomes. Taking a large step back can benefit a charity enormously, even in the simplest of areas, and progress really can be made.

Gillian Donald is a partner at Scott-Moncreiff