The big decision: in-house or outsource?
Howard Lake | 19 September 2011 | Blogs
The articles I write for UK Fundraising are mainly about charity consumerism – how charities harness the power of consumers to diversify their revenue stream. Today I look at whether charities should provide products and services in-house or look to outsource fulfilment and technology to specialised experts.
Being in the greeting card industry for nearly 12 years now, it caught my eye when I read an article in industry publication Greetings Today that UNICEF is to shut down its charity cards and gift operation in Gibraltar.
It is reported that this decision has been made purely due to the downturn in the greeting card global market.
A spokesperson at UNICEF said: “Changes in the global greeting cards market in recent years, including a considerable downturn in demand, have led to UNICEF reviewing and adapting its business model to meet these changes. The business rationalisation that has led to the development of the new model has focused on reducing operational costs associated with the cards and gifts business and consequently increasing the amount of resources allocated to programmes that assist children globally.”
I don’t agree with the apparent downturn in the global greeting cards market, as it is still worth £1.47 billion annually (more than tea and coffee put together) and a recent Mintel report on the greeting card industry shows that 21% of people try to send charity cards whenever they can.
Based on this, you could say that charity greeting cards are worth over £308 million to the sector (21% of £1.47 billion). However, I do agree that charities should look to outsource the technology and fulfilment of certain services aimed at consumers. It saves the charity money, time and resource; and of course the expertise of the specialist company.
UNICEF plan to do just that by outsourcing several activities that are currently performed in-house.
It would certainly not make any financial sense just shutting down operations as UNICEF’s cards and gift arm brought in some £25 million in 2009 and over £306 million over the last decade.
Will this be a future trend amongst charities as they try to cut back their expenditure?
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Craig Hartzel is CEO of Charity Greetings. Charity Greetings provides white labelled charity cards shop to charities. To open a free card shop visit www.joincharitygreetings.com
You can support charity by sending a greeting card, including birthday cards by going to www.charitygreetings.com.
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.