Writing a business case for charities

When it comes to customer relationship management systems, charities have unique needs, stricter budgets and different IT challenges than other businesses. How then should a charity business case be written? What needs to be included as part of the content?


Charities primarily spend their income on achieving their stated objectives - their charitable vision, whether it be helping patients, researching a cure for cancer, or paying rents and wages.

Unlike commercial enterprises, charities are duty bound to their supporters to spend as minimum as they can on administration costs. According to the National Council of Voluntary Organisations (NCVO), "the public is worried and concerned by how much money actually gets to where it's needed, direct mail, high levels of salaries… the public wants constant and tangible evidence that an organisation is keeping its costs down and is not wasting money."

This makes it harder for a charity to justify its IT expenditure, even if it knows new investment, such as a supporter relationship management solution, is essential in delivering better service to their existing supporters and being able to attract new supporters and solicit donations.

A business case is the reason or justification for a project and can be used to justify the use of IT budgets.

However, the typical commercial business case may not cover the entirety of the requirements of a charity business case. This is because the targeted audience of the business case varies slightly. While commercial and charity business case are both targeted for senior stakeholders such as project sponsors and have the same aim, a charity business case differs from a commercial one in that it has no shareholders to account to.

One can argue that supporters can be viewed as the “shareholders” in such instances, since they provide the income. However supporters have very different agenda from that of shareholders.

While a shareholder is always looking out to maximise their individual dividends and share value gains, a supporter is concerned with maximising the use of their money on the stated cause of their nominated charities. Supporters do not expect to make any money out of their donations! A shareholder might understand that an IT investment is necessary to generate higher gains on their share value in the long run, a supporter may see IT investment in a different light, for instance as unnecessary administration costs.

Charities are, therefore, under increasing pressure to justify investment in IT initiatives and there needs to be a demonstration of the link between:

  1. Cost of the investment versus the business benefits of the investment. This is covered in a typical commercial business case. (See figure 1 for an example);
  2. An alignment of the project objectives to the charities vision and addressing its supporters concerns (not usually covered in a commercial business case);
  3. The justification to the general public on how these benefits will be tracked and measured (i.e. a good story on how the money will not be misspent on unnecessary expenditures. This is also usually not covered).

Figure 1. Example of a cost vs. benefits in a business case.

As mentioned before, for a charity, the use of a business case is not just to quantify the tangible benefits, but to be able to give an account of the money that has been given to the organisation through goodwill and kindness. An example could be that a software acquisition might improve business processes hence operating costs by 20% but the other aspects of the 'business case' must also justify the use of the supporters' money. Using the budget for this purpose will lead to higher supporter satisfaction by 20%. This can be tracked and measured by an online supporter survey.

How then should a charity business case be written? What needs to be included as part of the content? Below is an overview of the stages and tasks involved in writing a business case, based on my experience gained over multiple Atos Origin’s engagements with UK charities.

Figure 2. Typical cases of writing a charity business case.

Figure 2 summarises the typical stages, key tasks and deliverables that are involved in writing a charity business case.

The key message to remember is charities are not commercial enterprises and have very distinct requirements. The golden rule of 'knowing your audience and writing for your audience' needs to be applied to ensure success.

Dr. Samuel Chong is executive consultant at Atos Origin, within the customer relation management (CRM) Division. Chong has extensive experience in implementing CRM solutions and strategies for membership organisations such as trade unions and charities. Atos Origin is an international IT services company, specialising in equipping clients with a fully integrated membership management or CRM system, by building on best-of-breed CRM platforms.

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