Case studies - sharing back office services

Case studies - sharing back office services

• West Yorkshire Community Accounting Service
• Bromley Voluntary Sector Trust - premises for the community
• CharITyshare - a new IT company
• Charities Buying Group - buying in bulk for good deals
• Community Action Network - shared services in high quality office space
• Carr-Gomm & Alcohol Recovery Project - contracting to a voluntary organisation
• Association of Voluntary Organisations Wrexham - payroll services

 

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West Yorkshire Community Accounting Service

West Yorkshire Community Accounting Service (WYCAS) is a company limited by guarantee and a registered charity. It has five CVS (Council for Voluntary Service) members: Bradford Community & Voluntary Service, Voluntary Action Calderdale, Voluntary Action Kirklees, Voluntary Action Leeds and Voluntary Action Wakefield District. They are formally constituted as members in WYCAS's governing document. Each CVS can appoint a Director to the WYCAS Board and each district also has a user representative on the Board with the opportunity to co-opt others. The Board is responsible for the overall governance of the organisation.

WYCAS employs 8 members of staff, with one community accountant per district. Most work from home, using their local CVS as a base, perhaps for meetings or as a central point where organisations can safely drop off documents until collected by WYCAS staff. However, WYCAS also rents a small office space from Voluntary Action Leeds.

WYCAS grew from the separate community accountancy work being done by Bradford Community & Voluntary Service and Voluntary Action Leeds. Their work 'tested the waters' for a more formal joint project which has since expanded to take in other parts of West Yorkshire.

Services

WYCAS provides financial services for any voluntary or community organisation in West Yorkshire.

• One to one outreach training for finance staff & treasurers (free to organisations with a turnover of less than £100,000)
• Financial management training courses (charged)
• Preparation of annual accounts & independent examination of accounts in line with Charity Commission guidelines (charged)
• Financial health checks for the organisation (free)
• Good practice guides on financial management (free)
• Financial advice line (free)
• The Balanced Sheet newsletter (free)

More information

West Yorkshire Community Accounting Service - email West Yorkshire Community Accounting Service or telephone 0113 270 6291

The Community Accountancy National Network helps develop, promote and support community accountancy services throughout the UK
email Community Accountancy National Network or telephone 0115 947 0839

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Bromley Voluntary Sector Trust - premises for the community

Five Bromley organisations together formed Bromley Voluntary Sector Trust (BVST), established as a separate registered charity to manage Community House in Bromley town centre. The lead partner was Community Links Bromley (a Council for Voluntary Service or CVS) which applied for funding and managed the project before BVST was established. Age Concern Bromley, Citizens Advice Bureau, Relate and Deaf Access also had major input into its development. All five partners were previously in separate London Borough of Bromley buildings. The collaboration was initiated in 1998 by the organisations and the council in a 'meeting of minds'.

Community House

In 1999, work began on refurbishing an old council building, a magistrate's court, which reopened as Community House in October 2000. Almost £1.4m was spent on the building, funded by the Community Fund and Bromley Borough Council with £150,000 from the Bridge House Trust to support access for disabled people as well as numerous charitable and personal contributions. Community House now accommodates the five organisations, a community café, two meeting rooms for hire by voluntary organisations and 14 desks for daily hire.

Feasibility of desk hire

The 14 desks were planned for use by embryonic organisations run by one or two staff or volunteers. At planning stage, there was much enthusiasm for desk hire expressed informally by local groups, but there has been less demand for it than envisaged. In 2004, a survey funded by the Bridge House Trust confirmed this lack of demand: smaller groups tend to locate outside the centre of Bromley, closer to the client groups they support. With hindsight, the research should have been done earlier as part of feasibility studies. All 14 desks have now been let, some to larger organisations and a few to small groups so this facility is still generating income for BVST and supporting the local voluntary sector, albeit not as originally anticipated.

Governance & management

BVST's Board comprises five Trustees from each of the tenant organisations and six  independent Trustees. Community House is managed by a Business Manager supported by an assistant, both paid by BVST.

BVST provides the telephone system for the whole building, but tenants pay their own phone bills. BVST does not have the resources to provide central administrative services, although the reception desk is staffed by volunteers and BVST owns a photocopier which is available for use by small groups and the tenant organisations which do not have their own.

BVST has to pay rent and repairs on the building and the Trustees have to ensure there is income for this. Tenants have had to learn to be realistic in their expectations: they are paying a subsidised rent as BVST makes no profit from them. The income BVST generates from hiring its rooms and desks gives them the reserves to run the building.

Sharing a building has made it a lot easier for the tenant organisations to network and, because Community House houses Bromley's CVS, it is becoming the focus for the local voluntary sector with many of the facilities they need found under the same roof.

More information

Bromley Borough Council information on Community House

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CharITyshare - a new IT company

"Both charities have benefited by mining the best practice of each." - Charles Nall, The Children's Society Finance Director on sharing IT with NSPCC

CharITyshare is a limited company set up in January 2005 to manage the IT services of NSPCC and The Children's Society. The two charities' Finance Directors form its Board of Directors and the charities have signed a management agreement. CharITyshare charges each charity per PC for the services it provides, with additional charges for work specific to one charity.

Which functions are shared?

The organisations are sharing most of their IT functions: helpdesk, training, purchasing, technical infrastructure and national and local technical support. Confidential databases remain separate. Technical services and the main servers for both charities are housed in NSPCC's London headquarters as it is larger. The helpdesk and training staff are based at The Children's Society's London headquarters with regionally based field officers providing local technical support.

CharITyshare has made savings by upgrading to broadband and by eliminating duplication. With more clout in purchasing, they get better deals, giving both organisations a higher standard of IT.

Staffing

As the IT staff of the two organisations combined, advance planning minimised the need for redundancies to just one. In total, over 20% of relevant jobs were cut, with 12 staff moving office. The two head offices are three miles apart, easing staff relocation. Combining two sets of staff has led to a bigger brainpool with each set of staff contributing new ideas.

The CharITyshare helpdesk was staffed by 13 to begin with. This will decrease to nine staff as the benefits of an upgraded IT system lessen the pressure on the helpdesk and as staff throughout both organisations get used to new systems of support. Temporary staff provided the extra helpdesk support.

The planning process

"Their IT support would have a guy going up the road and we'd have one going the other way." - John Graham, NSPCC Finance Director

Discussions about combining IT services began at the regular networking meetings of several children's charity finance directors where an awareness of the growing economies of scale in IT triggered a benchmarking exercise. The exercise confirmed that sharing services can mean savings and revealed similarities in the systems of The Children's Society and NSPCC. Their data and support needs, nationally and in offices UK wide, were also similar, with similar costs per PC. Both organisations had similar plans for upgrading their IT. Having a similar timetable for this upgrade was another helpful condition for collaboration, although not essential. They accelerated the upgrade to bring CharITyshare into being.

The two charities are a good cultural match with complementary aims as children's charities, although both are aware that there are also potential cultural matches outside the children's sector. Before setting up the company, both followed the same technical due diligence exercise as well as full analysis of cultural compatibility, financial situation and the likely costs, benefits and risks involved. A business feasibility study identified considerable savings if IT was merged. The outline business case and the implementation plan were approved in turn by the finance committee of each organisation.

With hindsight, the organisations think they should have recruited a joint head of services from the start to project manage delivery of the implementation plan. The Head of Services could have worked very closely with the existing two Heads of IT as they continued to service internal users. The familiarity of current staff with existing systems is key in a time of transition.

Why they didn't outsource

• Outsourcing would incur irrecoverable VAT, meaning 17.5% extra on the bill
• IT is core to any organisation so it is a major step to hand it over to a third party. Due diligence would have been a greater task if each organisation were separately investigating an unknown company without the prior relationship of trust and the common culture of the two charities.
• Transition costs are lower to known partners than to a company that wins a contract.

Tips

• Choose your partner with care - it helped that the two Finance Directors already got on well together
• Allow plenty of time for planning, particularly on technical infrastructure - CharITyshare was the result of an 18 month planning process
• Pre-empt hiccups in the quality of IT service by warning staff - CharITyshare kept staff informed, asking them for their patience in the meantime
• Don't do everything at once - CharITyshare planned to implement more complex techncial changes later, when staff expertise had reached full strength
• Be clear where accountability lies in different areas - the development of CharITyshare was supported by cross-departmental joint working, but NSPCC led on HR and The Children's Society on finance

Win-win

Win for The Children's Society: working with a larger organisation with a wider range of expertise
Win for NSPCC: working with an organisation that had raised its IT services to commercial benchmarks and standards on slimmer resources

• High quality service maintained through transition
• Potential to improve further
• Greater depth & breadth of expertise
• Cheaper than outsourcing - at a lower risk
• Cost savings of 25% per annum over three years -The Children's Society's set up costs were £150,000, but CharITyshare is due to save the Society £800,000 over three years
• Money freed up to pursue each organisation's core mission

Could you do this?

The two charities' Finance Directors believe that the model they used is transferable. In entering uncharted territory for the voluntary sector, it was useful to have so much common ground. However, they feel that it would be unnecessary for two charities embarking on a similar course to be in the same sub-sector. Similar characteristics - in this case relatively large numbers of small sites, stable finances and beneficiary focused cultures - can be found in many charities. The key success factors in the CharITyshare co-sourcing venture were that the two charities were not dissimilar in size, had complementary business and IT skills, a relationship founded on trust, and the will to see it through.

More information

CharITyshare

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Charities Buying Group - buying in bulk for good deals

The Charities Buying Group (CBG) was set up by national charity, Leonard Cheshire, in 2003. It offers its members ways of cutting costs through a wide range of purchasing agreements, thereby releasing funds for members' charitable activities. Its deals with suppliers include cleaning products, utilities, IT, insurance services and agency staff. Membership saves organisations time spent tracking down deals and bargaining and reassures supporters that their donations are going to frontline work.

The CBG is a not-for-profit organisation operated and owned by Leonard Cheshire.

Membership is free to registered charities or not-for-profit organisations so that all can benefit from the economies of scale usually only available to larger organisations. The Group had over 600 members in April 2005. The more members, the higher the discounts that can be negotiated for all of them. Members must respect commercial confidentiality and be willing to share information with the CBG. Leonard Cheshire itself saves a million pounds a year through the scheme.

On top of savings, members can share experience on common procurement issues to improve ways of working by attending CBG events and using the Website Bulletin Board. The CBG uses online newsletters to keep members up to date with agreements and visits members to review their needs and offer advice on purchasing.

The CBG's running costs are funded from its supplier base. It is staffed by a Managing Director, Member Services Manager and Support Team.

Charities Buying Group telephone 0870 922 1290

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Community Action Network - shared services in high quality office space

Mezzanine 2 is a social enterprise created by Community Action Network (CAN). It provides premises and support services to a range of voluntary organisations by licensing space to them in modern office accommodation at London Bridge. At reasonable levels of occupancy, the enterprise is financially sustainable and does not need to rely on grants of any kind, although it received a generous grant from the London Development Agency (LDA) to cover its initial start-up costs.

Structure & management

CAN's main function is as a network for social entrepreneurs and the idea for shared offices grew from this culture of collaboration. Since CAN was founded in 1998, it has created several successful 'collaborative clusters', each time adding tenants. In 2000, CAN established a company limited by guarantee, Mezzanine Services Limited (MSL), to manage the shared office in its first 'Mezzanine' in London's Waterloo. Tenants became members of MSL but did not join its Board of Directors. They signed Deeds of Adherence that enabled them to vote on issues, but experience showed that tenants preferred to devote their time to their charitable aims rather than participate in management meetings. In effect, they preferred to leave the management of the office to CAN.

In 2004, CAN, many of the other tenants at Waterloo and a number of other social enterprises moved to Mezzanine 2 at London Bridge. There are now 43 organisations and, in July 2005, a further floor will be included in Mezzanine 2 with capacity for a further 15 to 20 social enterprises. Under the current structure, organisations hold an annual licence with Mezzanine 2. This meets the requirements of Mezzanine 2's leaseholder. MSL is being wound up and Mezzanine 2 Limited now runs the venture. Mezzanine 2 Limited is a company limited by guarantee and a registered charity. It has five Trustees, including a representative of one of the licensees. Three of the Trustees are independent members of the Board.

As part of the conditions attached to the LDA grant, targets were set for occupancy by groups representing women, disabled people and BME. These have been comfortably met and will be supported further by expansion onto the first floor.

Services for licensees

The cost of the licence includes office space, use of meeting and conference rooms, provision of kitchen and reception facilities, distribution of post and deliveries, cleaning and a full time Business Manager, Administrative Officer and Receptionist. Charges are made for photocopying, postage, telephone and optional broadband connection. Mezzanine 2 is keen to develop forms of support for its licensees such as studio quality radio interview lines and collaborative procurement to cut costs.

A set of licensee guidelines has been produced. They include health and safety procedures and various policies relating to co-location. A recent survey has shown that the cost per workstation is well under half the local commercial market rate. Recent audits of environmental practices and accessibility for disabled people have taken place with very good results. A number of good practices have been commended and further recommendations implemented.

Networking culture

The open plan layout and shared facilities encourage informal networking and sharing of ideas among the social enterprises. Formal consultation takes place through quarterly CEO meetings and communication is maintained daily through informal meetings and contact. An intranet developed by Gemini, one of the licensees, has been introduced to encourage networking amongst the organisations on all three floors.

"Joining the Mezzanine has done much more for us than just give us access to cost-effective space and shared resources. We've benefited from being part of the wider community, both professionally and socially. It has also helped us develop new partnerships with other voluntary organisations.- - Nigel Harris, New Philanthropy Capital Chief Executive

Based on the success of this model, CAN is planning to replicate the Mezzanine elsewhere and is supporting other organisations to develop similar concepts around the country.

CAN Guide: How to Mezzanine with accompanying Detailed Briefing Notes and Financial Information
CAN are happy to advise organisations considering sharing services - email CAN or telephone 0845 456 2537

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Carr-Gomm & Alcohol Recovery Project - contracting to a voluntary organisation

"This is a commercial contract, but, being a charity ourselves, we have a cultural compatibility with the Alcohol Recovery Project which adds value to the services we provide." - Michael Stock, Carr-Gomm Strategic Resources Director

Carr-Gomm has signed a legally binding contract to provide back office services to the London-based Alcohol Recovery Project (ARP) for at least five years. Carr-Gomm will provide finance, IT, HR and property maintenance services to ARP from its national office in London, replacing ARP's in-house services.

ARP put these services out to competitive tender. Carr-Gomm were approached by consultants acting on behalf of ARP and won the contract. Some ARP staff transferred to Carr-Gomm under TUPE while others requested voluntary redundancy.

ARP are in a strong position as a client with the protection of a legal contract under which they can expect a high standard of service. Carr-Gomm provide ARP with comparable services to their own which ensures that standards of service remain high for both organisations. The arrangement also benefits from economies of scale.

An expanding market

"This [partnership] is an important step for Carr-Gomm in expanding the services we offer to other charities as well as to individuals." - Gary Lashko, Carr-Gomm Chief Executive

Carr-Gomm are interested in developing their role as a provider of back office services to complement their existing consultancy arm which supports frontline work with vulnerable people. When considering taking on further contracts, Carr-Gomm will look at areas including:

• Office location of potential clients
• Ability to provide the services the client needs
• Are they generic services that Carr-Gomm already run in-house?
• Are they specialist services where Carr-Gomm already has expertise?

The HR service

Carr-Gomm provides finance, IT, HR and property maintenance services to ARP and is discussing marketing and health and safety consultancies.

Features of Carr-Gomm's HR service for ARP include:

• Detailed Service Level Agreements outlining the limits of Carr-Gomm's input, eg. Carr-Gomm will provide staff for an ARP grievance panel on request, as an additional chargeable service, at cost price.
• Case by case consideration of any confidentiality issues which are not covered by the principles of confidentiality that bind Carr-Gomm's HR staff.
• Carr-Gomm run in-house training relevant to ARP staff and which ARP can buy. Carr-Gomm can also arrange and pay for external training for ARP staff for which ARP later reimburse them.

More information

Carr-Gomm press release - telephone Michael Stock 020 7397 5300

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Association of Voluntary Organisations Wrexham - payroll services

The Association of Voluntary Organisations Wrexham (AVOW) runs a charged payroll service for 70 local organisations. Each month, AVOW calculates salaries, tax and National Insurance contributions for the organisations and sends out payslips.  AVOW can pay the salaries into individuals' accounts via the BACS system and then gets reimbursed. At the end of the year, AVOW organises P60s for employees.

Starting with the letter of introduction, AVOW maintains dialogue with client organisations on how they would like their payroll to be run. AVOW take a supportive, 'hand holding' role with organisations. It is important to them that they are seen as approachable so that organisations are happy to ask for any advice they need.

More information

Association of Voluntary Organisations Wrexham

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