According to the Austrian fundraising associations “2012 Fundraising Report”, in 2012 for the first time the sum of half a billion Euro was donated. According to the Federal Ministry of Finance (BMF) 72 million Euro (now ~ 100 million Euro) were written off against tax at the time of the publication of the report.
One basic assumption is, that in non-profit organizations only 10% of the expenses are allotted to overhead-costs (office supplies, insurances, IT-hardware, electricity, gas, telephony etc.) instead of the usually used figure of 20%. This conservative estimation is based on the idea that a bigger part of the money is of benefit to people in need (flood victims, earthquake victims etc.) ABROAD before it causes overhead-costs in the country of the donations origin and the fact that labour costs have to be considered, too.
Depending on the concrete sum, the volume of overhead-costs would account for about ~ 50 million Euro even at a conservative estimate: A sum which has to be raised annually by NPOs and NGOs individually – without benefiting from B2B-price advantages because of old operational procurement structures. Not included are such services that are provided and adduced by above mentioned NPOs as “service providers” also with subsidies or budgets of extra-universitarian research. Caritas, for example, uses its own procurement-group for that purpose since ten years now.
The establishment of a special procurement-group for NPOs and NGOs by means of collective market power was logistically hard to realize due to the heterogeneity of the domestic NGO-community and the vast variety of organizations. However now, due to ongoing negotiations with various suppliers a co-operation to the benefit of almost all non-profit organizations and their umbrella organizations makes large cuts in cost possible, thus helping to save large amounts of (donated) money and membership fees without compromising on quality.
High potential of saving money
Based on the above mentioned overhead-costs and taking 20-50% as a feasible scenario for savings (depending on the product category and accumulated volumes), donations in the amount of up to 25 million Euro which are currently spent on office supplies, energy, insurances and telephony etc. can be saved and made additionally available for the very purposes of the member-organisation. For comparison: The campaign “Licht ins Dunkel” raised around 11 million Euro in donations the last business year. In individual cases about 63 % saving on printer-paper (chlorine-free, recycled) or about 65 % on Fairtrade-Organic-EZA-Coffee were already possible. The synergy effects for mobile tariffs, postal fees, newspaper ads, organic & sustainable catering etc. are adding up to hundreds of thousands of Euro and get more and more evident since the founding of the procurement group.
A 100 % win-win Situation
Such cooperation brings huge financial advantages for all members. Our combined business-volume has an enormous market-power that grows bigger and bigger the more NPOs are participating. Since we are strictly non-profit-oriented and demand according prices from our suppliers in support of our civil-socciety-engagement, all participating NGOs have high purchasing benefits right from the start. Even though a “bottom-up” self-founded NPO-purchasing-platform is in disadavantage over a “top-down”-procurement decision in a high-volume business, the widespread product portfolio and the actuality of offers does not have to fear comparison. We demand nothing less than a “positive discrimination” on the market when it comes to pricing – generating volume due to good conditions, not offering volume beforehand in order to GET these prices.
CSR: Doing well by doing good
The initiative at hand is actually becoming a lighthouse-project in regard to Corporate Social Responsibility and thus a spur for other initiatives alike. Due to the special requirements of participating NGOs in terms of product portfolio (sustainability, certification such as FSC, Fairtrade etc.) a feedback loop for the ecologization of our suppliers is created, which in turn does not just intensify the access to such exemplary products for everyone. In return, prices for exemplary products are going down, the learning curve of our members is shortened recognizably by the direct feedback of the frontrunners in the group regarding sustainability requirements. That of course enables and opens the whole eco-portfolio to the entire sector, since now “greener” and “fair-trade” does not necessarily mean “more expensive” anymore.
More efficient handling of donations
From the NPOs point of view not only the financial benefit would be an argument. Such a great initiative would certainly increase people’s wish to donate and would also contribute to donators’ confidence in the long run. The extra-universitarian research institutions will also benefit seriously especially in times of increasingly strict accounting rules and limited hourly rates at increasing cost of operation. We make sure your donation lands were you wanted it to go, and isn`t “eaten up” in internal friction.
Very easy to use
Step by step we are enlarging our portfolio to cover all areas of constant cost, first working on “quick wins” and the big chunks of overhead-cost, getting more and more down “the bucket-list” of our members, trying to cover an ever growing field of options.
The business model
There is no Minimum business-volume for membership or the mentioned services: The procurement-group arranges frame contracts with B2B-vendors, ensuring that the “big spenders” will create the over-all volume for our “Little ones” alike. Membership can be dismissed annually, so participation thus comes as a low-threshold service, easier than an average cell-phone contract that usually lasts for 1,5 years. Each NGO is individually billed so discretion is constantly provided, as well as far-reaching independence from all other Organisations in terms of policies, budgets, eco-standards and delivery. An exemplary list of goods and services is already offered: eco-electricity, city-gas, telephony, office supplies and printer paper, investment goods as notebooks, printers, telephone-systems, (organic) food, repair-services, insurances, cleaning services etc.
If a cheaper solution for any service is available we will immediately communicate it to our members and explain how the very options are, completely freeing the members of all these hassles and needs to keep all that under control themselves. Of course we are also helping to outsource internal cost since we are offering advice and help when it comes to tender documents and specification-sheets.