Five ways departmental siloes cost charities money – and what you can do about them

Janine Chasmer
Janine Chasmer

The funds and resources available to not for profits are scarce even at the best of times. Not only do charity COOs struggle to recruit willing and able staff, but they must also ensure that every penny counts when it comes to supporting their cause. Oftentimes, however, there’s one major obstacle standing in the way: departmental silos.

How silos are silently siphoning critical funds

It’s only natural that charitable workloads are split into specialisations. After all, having separate fundraising, marketing, administration and financing teams serves to ensure that organisations are making maximum use of the human skills and talents available to them. Nevertheless, this divided departmental approach could also be damaging operations, with charity leaders struggling to achieve cohesion in an environment where internal teams are all working separately, towards their own individual targets.

It all leads to losing sight of the bigger picture, potentially allowing duplicate efforts, missed opportunities and misaligned efforts to thwart any attempts to do good. Indeed, a lack of coordination between teams ultimately leads to monetary losses, potentially holding charities back.

Here’s how departmental siloes could actually be wasting funds and ramping up costs:

1) Departmental animosity

People get frustrated with one another, even when sticking to clearly defined roles. Problems get passed around, with claims that ‘this is a problem for the finance department’ being met with complaints that finance shouldn’t have to pick up the slack for those working in programme delivery, for example. The problem is only aggravated by the fact that different departments don’t talk to each other, making it difficult to access vital information.

When daily resentments, however small, creep into regular operations, people will leave. With the third sector already struggling for income to spend on training – with the average not for profit spending at most 50p in every £100 to upskill their teams according to experts, Clore Social Leadership – this is something that must be prevented to avoid further strain on an already tight budget. Skimping on training required for adequate replacement would only reduce the quality of work and, thus, the number of donors and volunteers willing to contribute, making retention the only viable answer.

2) Data poverty

Siloed systems means that only certain teams have access to certain information, it can be difficult to see the bigger picture – a picture that’s required to achieve wider organisational goals. This means that any efforts made by individual departments are haphazard at best.

Siloes furthermore limit the ability to analyse and utilise data to target specific sectors of the public to gain further, crucial support – ultimately limiting the efficacy of marketing campaigns that can prove costly to plan, launch and run.

3) Reputational damage

The issue of siloed information becomes even more problematic when data doesn’t match up across departmental records, as a result of old software or even private spreadsheets being used in place of a proper system. When payments, accounts and financial data are involved, this could lead to serious legal and financial implications, as well as a significant accountability problem. Donors and benefactors could lose faith in the implicated organisation – and, without their trust, reputations are of course left in tatters. This has significant impact on future revenue for charities.

4) Limited opportunities and perspectives

When people across departments aren’t sharing data, they’re not sharing ideas and perspectives. In other words, poor communication inhibits innovation and more creative approaches to solving problems, leading to innumerable missed funding and sponsorship opportunities.

5) Wasted time, money and resources

Finally, a siloed system is not just a case of resources getting pooled by specific departments, with staff from certain teams hoarding things for themselves. It’s also a case of shared resources not being allocated and maximised fairly, with duplicated efforts and misaligned goals sabotaging charitable efforts – scare money and time being spent without reason as a result.

From financial frustrations to flourishing funds

The solution starts with organisational culture, swapping traditional ways of working independently for more integrated thinking, operations and campaigns. It’s all about working towards a shared goal and vision, with maximum transparency, shared responsibility and mutual accountability taking precedence. Only in working together can not-for-profit organisations reduce their spending and successfully achieve their mission.

What keeps them from this much-needed change, however, is not knowing where or how to start. Many COOs furthermore worry about investing funds into new technologies and training without being sure of the payoff, struggling to bring other key stakeholders on board with their vision.

From missed opportunities to maximum impact

Migrating to a centralised system could change all this. Not only would storing all your data in one place allow for faster access to volunteer and membership information, which can be better leveraged to boost support and campaigns, but it also allows for a collaborative approach to solving charity problems. With a mix of skills come new perspectives and new ideas for reaching your goals. What’s more, maintaining and working towards one single vision ensures that everyone remains on track, never forgetting the organisation’s overarching purpose.

When people have a clear, shared path to follow, they are more likely to feel motivated and remain committed to the not-for-profit cause. Moreover, because they can work together, the organisation will benefit from faster, more effective processes for much more impressive results.

The higher level of trust across teams will reduce staff turnover, whilst improved data capabilities result in a better understanding of target audiences. It’s a win-win situation.

How it would work

In order to make this collaborative vision a reality, it’s important to establish a clear view of all internal processes and structures. This way, you can work out where communication channels are breaking down, then fix them.

Centralised customer management software is generally a good, centralised solution, with external change management specialists making the decision and implementation process simple. Such organisations, like the expert team at Equantiis, can also help with skills gap analyses and staff readiness assessments, too, giving insight into staff perspective and capability.

This, in turn, highlights the need for any training, not only on how to use new technologies and systems but also on improved collaboration and communication. Organisations in the third sector that opt for external assistance with their change processes should also consider documenting their shared business processes to ensure that everyone sticks to the new, centralised approach.

The results

By introducing centralised data management software and encouraging staff, volunteers and other key stakeholders to work together, not-for-profis will be better positioned to oversee charitable processes, finances and governance, further benefiting from greater creativity and innovation. The shared knowledge and resources that this solution will introduce ultimately results in more efficient, effective operations, that will reduce any previous redundancies and waste that were holding charities back.

When departments begin to work together, organisations can deliver much clearer messaging via a unified approach. This helps to foster public trust, likely causing donor engagement to increase as a result. Single-source data management also makes for a smoother, more compelling experience for donors, volunteers and major benefactors alike – translating into a higher budget that gives NFPs more money to reach their goals.

Ultimately, it’s time to stop data siloes from driving inefficient, costly and ineffective internal processes and implement money-saving, centralised systems that will enhance existing philanthropic efforts instead.

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More about the author

Janine Chasmer
Janine Chasmer - Principal Consultant

Janine’s career includes 10 years in the not-for-profit sector, specifically within membership, and she leverages her industry expertise and first-hand experience with a wider range of clients, including Membership and Charity, where she provides consultancy on a range of areas including Business Strategy, Customer Experience improvement and process optimisation. In recent years, Janine has applied these consulting skills to the Education sector, supporting HE and FE institutions to improve their applicant and student experience at key phases such as application, enrolment, Clearing and progression. Other projects include Digital and Data Strategy, process and automation, and Student Journey optimisation. She has also worked as a SRM Functional Consultant, using this unique insight of both sector knowledge, and enabling technology to achieve transformational outcomes. Janine is also a regular event speaker and creates and shares industry and sector insights with her network.