Share

VSO to slash overheads by a third

VSO in Cambodia
News

VSO to slash overheads by a third2

Finance | Tania Mason | 1 Sep 2011

VSO is preparing to reduce its administrative costs by 30 per cent as it seeks ways to mitigate the effects of a drop in funding from the Department for International Development of 12 per cent over the next three years.

In the three years to April 2011, VSO was funded by DfID to the tune of £89m. But despite claims from the government that international development funding would be safe from the public spending cuts, VSO’s new three-year grant will total just £78m: £30m this year, £26m in 2012/13 and £22m in 2013/14.

The charity’s chief executive, Marg Mayne, explained that although development funding had been ringfenced, DfID was keen to reduce the size of VSO’s grant so that other organisations could share the pot more evenly.

“We are still a strategic partner and the NGO with the largest grant of this type from DfID,” she told civilsociety.co.uk.  "But they want the grant to reduce as a proportion of our total income over the years ahead, that’s why they have reduced it in absolute terms.”

Mayne said that VSO shared that goal. “No organisation wants to be dependent on one donor so for a while now VSO has been reducing its dependence on DfID.  In the early part of the 2000s we were 80 or 90 per cent dependent on DfID, now it’s more or less 50 per cent.  So getting down to 25 per cent over the next three or four years is part of the trajectory that we want to be on anyway.”

Four-year strategic plan

The charity is one year into a new four-year strategic plan called People First that aims to strengthen its development programmes and impact in tackling poverty.  It has already been increasing its income from other sources – almost doubling this over the last three years – and has plans in place to continue this diversification.  Fundraising efforts will focus on individual giving, major donors and institutional and statutory funders both here and abroad.

At the same time efforts are under way to cut overheads by 30 per cent, a target Mayne described as “challenging, but one we really need to step up to in order to demonstrate value for money”.

“At the time the Budget was set a lot of public sector services were being asked to reduce their costs by around a third, therefore we thought it wasn’t unreasonable for us to set a similar target.”

New IT systems

VSO plans to invest in IT systems in a bid to achieve the necessary savings.  Mayne said: “Like all charities we’ve been extremely cost-conscious over the last decade and now reached the point where we’ve recognised that we really need to invest in our IT to rapidly transform the way we do our business. That way we can make a step-change instead of constant salami-slicing.”

New systems will mainly focus on communications technology but also workflow management.

Mayne admitted there may be some redundancies amongst VSO’s 800 staff (250 of whom are based in the UK) but she hoped that natural wastage and the effect of more of the charity’s income being devoted to programme work would minimise job losses.

“At the end of the day we are looking to increase our impact,” she said. “All the work we are doing around increasing income and reducing costs is in order to increase our impact.  Our objective as an organisation is to reach the same number of people we are currently reaching, but to really improve the quality of their lives. It’s about quality, not quantity.”

Geoff Baker
Executive Director
Aid-4-Africa
18 Oct 2012

There is something wrong here. If VSO are able to consider making a reduction in "over-heads" by 30% then they can't possibly be managing their finances in a robust and efficient manner. VSO has simply sat back and relied on "soft funding" from DfiD far too long. It's time for VSO to get a proper professional fund raiser and raise "actual" funds rather than expecting funds to come to them.

Suresh Lalvani
Consultant
Consultant
2 Sep 2011

NGOs need to look more closely at expense claims from their staff, in particular from UK staff based overseas as expatriates, and from staff who travel from the UK to field offices and projects overseas.

There could be opportunities for significant cost savings here.

Comments

[Cancel] | Reply to:

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Free eNews

No evidence of criminality at Tower Hamlets, say police

17 Apr 2014

The Metropolitan Police has said that there is “no credible evidence of criminality” following an...

Donations double in one day following Marathon runner’s death

16 Apr 2014

The amount donated to the National Osteoporosis Society, the charity 42-year-old Robert Berry was running...

Sector 'extraordinarily disconnected' from public, CFG chair says

15 Apr 2014

Charities are becoming “extraordinarily disconnected” from donors and supporters who do not understand...

Paula Sussex to be the next Charity Commission chief executive

17 Apr 2014

Paula Sussex, senior vice president, public sector of CGI, has been appointed the new chief executive...

Impact of welfare reforms felt by 95 per cent of Yorkshire charities

17 Apr 2014

A report published today which looks at the impact of welfare reforms in the region of Yorkshire and Humber...

Trussell Trust sees use of its foodbanks 'almost triple' in a year

16 Apr 2014

The number of people using the Trussell Trust’s foodbanks rose from 347,000 to 913,000 in a single year,...

'Technology can offer charities more than just online donations'

10 Apr 2014

Charities are focusing too much on using digital tools for fundraising instead of how technology can be...

Amnesty calls for 'full and frank disclosure' on alleged US surveillance

9 Apr 2014

Amnesty International has warned that alleged mass surveillance by the American intelligence agency NSA...

Virgin Money Giving launches app following year of growth

1 Apr 2014

Virgin Money Giving has launched an app for users after reporting that 30 per cent of traffic to its platform...

Join the discussion

 Twitter button

@CSFinance