Building donor trust with procurement decisions
At various times of the year, e.g. the "giving season" of Christmas, charities gear up to spend their advertising and marketing budgets and achieve their goals. But with the latest Charities Aid Foundation (CAF) report showing that donations and sponsorship levels are dropping with four million fewer donors, and six million fewer people sponsoring in 2024 compared to 2019, are charities being transparent enough to break through the trust barrier put up by increasingly jaded donors?
Is visibility in their sourcing and supply chain efficiently supporting engagement with their donors?
Worryingly, the CAF report also highlights an important generational trend: only 36% of 16-24-year-olds say they donated or sponsored in 2024, a figure that has been in steady decline since 2017. In addition to fewer opportunities to attend or organise fundraising events, due to a rise in remote learning and a decline in the use of cash, it seems young people are less inclined to engage with charities and to spend their squeezed discretionary cash on donations.
Underlying reasons
While across all age groups, affordability was the main reason not to give more, the underlying reasons for not prioritising giving are deeper, with lack of trust topping the chart especially for older givers. As this group is the most likely to give and is the most affluent, it's clear that charities need to address this lack of trust rapidly and incisively.
In addition to this, the new UK Procurement Act which came into force in February 2025 also has implications for charities. The Act was designed to "improve and streamline the way procurement is done and benefit prospective suppliers of all sizes, particularly small businesses, start-ups and social enterprises", by altering the principles on which public bodies select which goods and services to buy.
The Act shifts traditional supplier assessment models, once based on the MEAT (Most Economically Advantageous Tender) principle, to selection on the MAT (Most Advantageous Tender) model, which includes other value-enhancing factors such as carbon footprint, diversity, contribution to local communities and overall social value, in addition to affordability.
A focus on transparency will derive from the more open and inclusive procurement process and includes greater reporting of results to the Cabinet Office as well as making underlying performance data public. For social enterprises, this drive for greater accountability aligns neatly with the need for greater transparency to overcome donor hesitation and lack of trust.
Supply chain
In particular, one key area where charities need to ensure their actions are transparent is the supply chain, particularly the selection of tier 1 and tier 2 suppliers. Charities typically procure a mix of operational supplies and mission-specific resources to keep their services running smoothly.
On the administrative side, they often need office essentials like stationery, printers, computers, phones and software licences, along with furniture and utilities such as internet and insurance. Many also rely on digital tools, including donor management platforms, email services, and website hosting. Maintaining facilities may involve spending on cleaning services, building maintenance, security systems and repairs.
For delivering their programmes, charities procure items tied directly to their cause. This could include food, hygiene products, medical supplies, clothing and educational materials. Some need equipment for workshops, transportation such as vehicles or transit passes, or materials for shelters and community services. Supporting staff and volunteers can require uniforms, safety gear, training materials, certifications, and travel arrangements.
The exact mix varies based on the charity's focus, but most juggle both operational necessities and resources tied to their frontline work. Charities delivering aid abroad may have significant procurement costs that cover high-ticket items such as construction, building supplies, medical equipment and more.
Rigorous standards
Rigorous supplier selection standards for charities are called for from both a regulatory and compliance standpoint and by public opinion. From modern slavery and human trafficking exposure through to ensuring that suppliers are aligned to the ESG priorities of the charity and not, for example, sourcing construction timber from areas protected from deforestation, the standards suppliers must meet are high. When delving into tier 2 and 3 suppliers, further back in the supply chain, however, it becomes increasingly complex to vet and monitor whether all these conditions are being met.
In addition to this, humanitarian charities delivering aid across the world try to favour local organisations, to aid development, shorten delivery times and cut costs. Research shows that the procurement of products and services accounts for approximately 65% of the costs of relief operations.
The United Nations Children's Fund (UNICEF), for example, procured USD 3.5 billion in supplies and services for operations in 150 countries and regions out of its annual budget of USD 5.2 billion in 2018, accounting for 67% of its total budget that year. Similarly, the Danish Refugee Council (DRC) spent 82% of its budget in procurement that year.
A key challenge faced by charities delivering aid overseas and supporting overseas development concerns emergency procurement, which may involve lower than acceptable quality levels, and limited production and warehousing capacities. Favouring local suppliers benefits developmental and humanitarian objectives, but puts the charity at risk of dealing with corrupt entities. More importantly still, humanitarian charities report security challenges, armed conflicts and corruption as threatening their supply chain integrity.
Strategic role
It's clear therefore that procurement already plays a strategic role in the work carried out by charities and humanitarian missions, commanding a huge proportion of their budget, as well as supporting mission objectives and grounding values into real-life choices.
To manage the risks and potential, both large and small, associated with their procurement activities, more and more charities are deploying digital procurement solutions that systematically record spending and supplier data. These may prove to be a key tool for voluntary, community and social enterprises (VCSEs) wishing to compete in the awarding of public sector contracts in the UK.
Aside from supporting with UK Public Sector tender access, digital procurement platforms are helping charities more broadly with bringing visibility and accountability to even their smallest purchasing decisions. For day-to-day needs such as choosing utilities and stocking office supplies, many charities now use platforms that track the sustainability credentials of suppliers.
A small charity might, for instance, commit to only procuring green energy for its premises and use a digital marketplace that verifies renewable-only providers. Others might choose to opt for online catalogues that flag eco-labels or sustainability ratings, so that when they order items like stationery, they can choose products that meet their ESG standards and automatically record those choices for reporting and audits.
Mid-sized charities are using procurement platforms to centralise purchasing across teams and locations, which reduces off-contract buying and builds a consistent ethical standard. Instead of staff making ad-hoc purchases, they log into an approved portal where suppliers have been vetted for their labour practices, pricing transparency and environmental footprint. The platform keeps a digital paper trail showing who bought what, from whom, and why.
This not only improves value for money but also lets leadership demonstrate consistency in responsible spending without having to pull data from multiple spreadsheets or invoices.
Risk of bias
For charities commissioning construction, transport, catering or specialist services, digital procurement tools make both sourcing and evaluation more transparent. Tenders for these high-value services and costs can be issued, submitted and evaluated entirely within a platform, reducing the risk of bias or inconsistent criteria. Built-in audit logs help track decision-making, while automated alerts can flag when suppliers fall short of compliance standards around health and safety, environmental impact or modern slavery.
For example, a housing association responsible for maintaining and refurbishing hundreds of affordable homes may want to show donors that they are not overpaying contractors, that they are choosing suppliers based on value rather than convenience, and are thoroughly vetting subcontractors.
When replacing boilers or installing insulation, the platform will document that multiple vetted suppliers were invited to quote and that the selected contractor met the charity's standards on price, quality and environmental responsibility. This visibility reassures donors that every pound is accounted for and linked to an open, competitive and auditable decision. With a digital paper trail, the association can show exactly how each supplier was chosen, what criteria were used and how costs compare to benchmarks.
At the largest scale, international charities building schools, hospitals, or water systems overseas can benefit from digital procurement platforms to navigate the complexity of tier 1, 2 and 3 suppliers, especially in regions where corruption risks are higher. These platforms help them mandate due diligence checks, gather documentation about ownership and ethical practices, and perform real-time risk assessments before awarding contracts.
Mapped digitally
Tiered supply chains can be mapped digitally so if a primary contractor subcontracts work, the charity can still see which companies are involved and whether they appear on sanctions lists or have poor reputations. This reduces the likelihood of inadvertently working with corrupt or unethical businesses, while giving donors confidence that funds are being used as intended.
Finally, as generational change and mistrust threaten the generosity of donors in the UK, ensuring that charities are transparent and accountable for every penny can help tip the balance in their favour. Procurement is not a peripheral need, but a strategic activity that can help improve efficiency and grounds charities' values in the ecosystems of their supply chain, bolstering donor trust.
