Charities and increased overheads

We’re seeing the cost of electricity, postage, council rates and more going up, how will this impact on what charities are able to deliver? 

A recent newspaper article explained who a charity shop was set to face a 700% increase in council rates, how can anyone adjust to having such a sizeable increase without it impacting on their ‘bottom line’, they can’t and for a charity basing its income on earnings from a shop this can be crippling.

Now NZ Post has announced postal rate increases, the second sizeable increase in a about two years, taking the rate for a standard letter to 70 cents. Sure there are special rates for bulk items and there’s is a community post subsidy/grant charities can apply for, but age number who receive this are minimal compared to the number of nonprofit organisations in the country. 

Power companies have announced increases in supply charges due to take effect over the next few months, with some indicating that this could be an increase of as much as ten percent.

For some it mightn’t be unrealistic for them to face all three increases, how can the expect to be able to continue delivering their services at the same level?

Charities were affected by the recent recession and had to tighten their belts, now they’re having to do it again.

It’s accepted that business need to remain profitable, but major increases can have a negative impact on them as well as thier customer.

How can charities manage these increases? 

There could be ways to manage them, reduce postage items – recommend to supporters that they opt to receive communicating via email is one way, reducing the number of newsletters is another – but, this could have a detrimental effect, as supporters can be encouraged to support and support more often based on the number of communications they receive.  

It has to be remembered too that not all supporters of charities have access to internet even though it’s said that 70-80% of the population has internet access, older supporters may not. 

Could landlords be approached for rent reductions or rent holidays, possibly, but landlords need to eat too and not all of them are not in a position to reduce rents as they too are likely facing increases too. 

Rates relief can be applied for, but with added pressures on councils can they add to the growing list of organisations seeking assistance?

When it comes to electricity perhaps charities could switch to using a service such as Powershop to get the best rates for their electricity consumption, costs. 

These increases will likely result in more grant/funding applications to community organisations, gaming machine trusts but these themselves revealing funding issues and don’t have the capacity or reserves to meet current applicant requests let alone an increase in the numbers applying.

It  will take some careful planning, and perhaps some out of the box thinking for charities affected by increases to find solutions, but they will, in the mean time they should be looking at general ways to reduce overheads so as to not to effect the service les they offer. 

What can supporters, or for that matter the general public do, support more, give more – if able, but like charities these too will be facing increases in their outgoing. Next is to lobby local council to urge them to reconsider rate and other increases, local MPs should also be lobbied to urge them to stand up for organizations working in their electorate.

Is your nonprofit facing rent, rates, power or other increases – what will you do to lessen the impact these may have on your ability to deliver your services?