Purchasing solutions for faith-based organizations: 101budgeting, FACILITIES, FINANCE, Latest News, Operations Monday, February 1st, 2016
By Glen Witsaman
Signing on with a procurement services company is an act of stewardship which can save your ministry money on the high-quality products you need.
Whether your staff or volunteers plan large dinner events, your day care center is struggling to achieve its budget, or your facilities need maintenance, outsourcing your purchasing for food, supplies and services frees up church resources to devote to your ministry.
What is a procurement services company?
Any company or group that provides a volume-based system of buying products and services is considered a procurement services company. They go by several names in the industry, including “procurement services group,” “group purchasing organization” and “procurement solutions provider.” These groups and companies work like large-box stores: Because a large number of clients purchase through them across multiple industries, they are able to negotiate deals with suppliers for deep discounts on quality products and services, which they pass on to their customers.
The traditional customer base of such groups has been largely multi-location businesses, such as hospital networks or school districts, which need everything from cafeteria food to grounds maintenance to kitchen equipment.
Over the past few years, however, church ministries — including their places of worship, day care centers, nursery schools, primary and secondary schools, camps, conference centers, universities and other community outreach programs — have also benefited from joining these procurement services groups, leveraging the larger customer base to achieve savings on quality products their ministries need.
What can be purchased through a procurement services company?
In general, these companies maintain a portfolio of agreements that cover anything a church ministry might want to buy for their place of worship, as well as their varied outlets. Examples include:
• Air filters
• Beverages (coffee, hot cocoa, soda, water)
• Candles and flowers
• Cleaning supplies
• Cleaning services
• Energy management services
• Facilities maintenance services (roofing, heating/cooling)
• Food products for cafés and large kitchens, camps, educational programs and other community outreach activities
• Floor mats
• Large kitchen equipment (refrigerators, stoves, grills)
• Office supplies
• Paper products (napkins, towels, toilet paper)
• Safety equipment (fire extinguishers, first-aid kits)
In addition, many name-brand contracted suppliers offer added-value programs if a church ministry buys the suppliers’ products through a procurement services company. Keurig might offer discounted serving station equipment with a certain volume of coffee purchases, or a snack company might offer counter displays and merchandising racks.
How do procurement services companies make money if their customers are saving due to discounts?
Some purchasing groups — including our own, entegra Procurement Services — are funded by the agreements with their contracted suppliers and the volume of products their clients purchase. In this model, a customer pays no fee to join; it simply signs on with the company and saves money on its purchases that are in alignment with the contracts. Some groups charge fees to the buying members. These fees can be set as a percentage of the purchase or as an annual flat rate. In addition, some groups require mandatory participation levels for their members, while others are completely voluntary.
Members participate based on the business needs of their ministry and their level of confidence in (what should be) competitive pricing negotiated by their purchasing group. When working with either model, customers benefit the most when they actively manage their buying practices, making sure they purchase through the contracted programs to realize the discounts and the associated added value.
How could a procurement services company support your church community and its ministry?
For a church organization, the main benefit of buying through a procurement services company is that it will save money, which can then be redirected into outreach and ministry. When signing on with a company like this, the church commits to a tested process that will provide local and national buying options, as well as the ease of consolidated delivery through an established, safe supply chain. The process should also include responsive service representatives to help the church customize its buying and maximize its savings through the programs. This type of company should also offer education on the ever-evolving needs of the church community, as well as information regarding industry trends and occurrences in the form of active websites, expertise from dietitians and chefs, informative webinars and recipes and menu guides.
Glen Witsaman is a National Director of Business Development, Leisure & Faith-Based segments at entegra Procurement Services, a non-fee-based purchasing company that provides customized procurement and distribution services for food and related supplies to many industries, including hospitals, schools, restaurants and church groups in the United States and Canada.