Years ago, whenever Ford Foundation manager of travel
services Stephen Gheerow found himself at an industry event, he’d keep an eye
out for the Bill & Melinda Gates Foundation’s Pam Massey and Open Society
Institute global travel manager Chris Gremski. “We sought each other out
because we have such similarity—not only in what our organizations do but in
managing our travel,” said Gheerow.
Recognizing the benefits of the interactions they had at
conferences, over the phone and by email, the three nonprofit travel buyers
extended their loose networking group to about 10 nonprofits. In March 2013,
the coalition formalized, launching as Fore.
“We thought we were just a talk shop,” Massey said of the
early days. Yet, their mission to share information, best practices and
benchmarks has morphed into a collective travel buying organization comprising
17 dues-paying members and counting. Those include Habitat for Humanity
International, Lions Clubs International, Rotary International, World Vision
and the World Wildlife Fund.
Now, the group has its own board and bylaws, hosts a website
with a members-only area to share information, holds monthly conference calls
and meets face to face twice a year. Mentorship also factors in, as members new
to the industry have taken guidance from vets.
With more than $100 million in annual airline spend,
according to its website, Fore has struck collective agreements with major
suppliers. That includes two deals with non-U.S. airlines and a joint agreement
with InterContinental Hotels Group. Fore has formalized with committees and
supplier category leads and now looks to expand its consortium buying model.
Big Difference
So what makes nonprofit travel programs different from
corporate programs?
“On the travel side, we talk and compare because
structurally and politically, our organizations are very, very similar,” said
Rotary International global travel manager Robert Mintz.
Discussions with other members revealed common themes. These
organizations do not traverse typical city pairs: Members preserve wildlife in
the Mongolian grasslands, work to eradicate polio in remote areas of Africa and
bring education infrastructure to Bangladesh. New York-Los Angeles this is not.
“Star Alliance is in 150 countries, and I’m in 200,” joked Mintz. Far-flung,
often remote, locales open myriad travel management challenges: lodging
infrastructure, acceptable payment modes and heightened risk management, to
name a few.
To illustrate, Gheerow noted that the World Wildlife Fund
sent a scientist deep into Africa in search of a species of frog presumed
extinct. “To get there, it’s planes, trains and automobiles, along with canoes
and local African tribesmen to navigate through the bush. We’re
going to places where a banker with common modes of transportation wouldn’t be
able to get to—or even want to go to.”
Additionally, travelers often are not employees but
volunteers. Disaster relief and recovery touch many Fore organizations. “We’re
the folks that run in while everybody’s running out,” said Mintz.
Then there are the more mundane elements. “We have some
interesting tax laws that we have to adhere to,” Gheerow said of the nonprofit
sector. “We’ve got to make sure we’re compliant with special tax codes and IRS
laws. Even within our own organizations, there are certain bylaws that we have
to adhere to.”
Another tie that binds Fore members: “Every dollar is a
donated dollar,” said Mintz. Most organizations, whether beholden to public
shareholders or private owners, tout travel expense prudence. But, said Mintz,
“it’s a sacred trust to the generous people of the world that fund all of these
different organizations for us to operate in the most efficient, effective way
possible.”
That extends to managing travel.
Collective Buying
Hosted by the Ford Foundation, Fore’s first official meeting
was held in New York in 2013. The group identified pooled procurement as an
opportunity—but one members would build to.
It was a natural outgrowth of the cooperative organization
that had networked to solve travel management issues, said Gheerow, “because we
saw some similarities in what we were doing in terms of who we’re buying
products from. We knew if we could pool our spend we could probably get a
better deal.”
Open Society’s Gremski noted that multinational corporations
commonly have key destinations and frequently used city pairs that might not
fluctuate much year to year. Because his organization’s travel patterns are
erratic, it’s harder to get suppliers’ attention. “When I try to go to vendors,
especially with hotels, it’s nearly impossible to get anything,” he said.
“Although we spend so much on lodging, when I look at the number of nights in
any particular location, it’s not enough. Same thing with airlines. When I look
at destinations and city pairs, it’s everywhere.” Mintz said, “You have to go
about 150 city pairs deep in order to get to half my program.”
The group’s foray into joint procurement began informally,
with polls among Fore participants, some analysis of member travel patterns and
spending, and discussions to gauge supplier interest. Members also checked
executive support within their organizations.
Not all joint-buying initiatives apply to all members. In
other words, each bid could get participation from a different subset of Fore
members.
“As we go down and start investigating and building these
types of procurement relationships, we poll the membership: Are you interested?
Is it something you’re able to do?” said Gheerow. “Those that say yes, we
formalize it internally and ask for some specific data, and we go out and share
that information under the Fore banner with the vendor and say, ‘Here is what
we can bring to the table.’ “
Added Massey of the Bill & Melinda Gates Foundation,
“Some of us are bigger, some smaller. We’ve been able to balance that. We’re
not out to cannibalize anybody’s existing deals. Where are opportunities we all
can benefit from?”
If one member has a particularly strong relationship with a
supplier, they’ll pitch the concept and take the lead. If the supplier is
amenable, Fore hooks in the appropriate committee, such as hotel. The group
hasn’t relied on a formal request-for-proposals process to solicit suppliers.
“It’s a little looser at this stage,” Gheerow said. “We’re only about two years
into it. We all hold different relationships with different vendors, so in
essence we just capitalize on some of those existing relationships.”
Massey said the first successful joint deal was with
InterContinental Hotels. “It was trust based,” she said. “One of the members
had a relationship with them and talked about the potential of what we could
build on as a group. To the suppliers, these are organizations that they might
not know exist. I think they see potential of an untapped market.”
Massey said IHG was a good fit for Fore, as the hotel
company has a large reach and multiple brands at different prices points to
suit the travel needs of various Fore organizations.
Fore members declined to name participating airlines but
claimed two airline agreements and a third in the works. Members said foreign
carriers have been more receptive than U.S. airlines.
“The approaches were pretty different” in reaching
agreements with each, said Mintz, who serves on Fore’s airlines committee.
There is no set formula, but members cited the importance of “flexibility” and
“creativity.”
“We tend to sit there and talk to senior people [at the
airlines],” said Mintz. “We just say, ‘Forget everything you know about
contracting. Take a little stroll through the park here with us.’ ”
He said the first airline deal took “seven to eight months
before we actually had the agreement signed, open and active.”
And, of course, members went through all the rigmarole of
airline deal making: data-release authorizations via their respective TMCs for
contract monitoring, marketshare commitments and reviews by each member’s legal
department.
“Airline deals are airline deals, and there are a couple
things you can modify. But in reality, if you want to have a discount, you
pretty much have to sign the way it’s written,” said Mintz. “The business terms
you negotiate, obviously.”
Manager of travel and administrative services at Cooperative
for Assistance and Relief Everywhere Ellen Moens, who has been Fore president
since March, said suppliers “are quick to see the opportunity” of the group’s
business. But “they’re a little slower in figuring out internally how they’re
going to oversee this type of an agreement: the accounting side, setting it up,
loading discounts into GDSs—all of the technical and administrative oversight.
It’s the setup that takes some time, and once it’s in place and it’s working,
it’s really just a matter of capturing the data and making sure we’re
fulfilling our commitment.”
Fore members stressed the importance of avoiding the travel
management trap of overcommitting and then underdelivering. The members
recently began steering their individual organizations’ travelers to use Fore’s
preferred airline partners.
Going forward, not all travel supplier agreements will fall
under the Fore banner, members said, as they will focus on common
opportunities. “We have mature programs, and we have deals,” said Mintz. “It
was a matter of how could we enhance what we’re doing in a way to not threaten
our existing deals?”
Moens also said Fore is planning to grow its member base, but
“we have to be manageable so you don’t see 200 different organizations go into
one agreement,” she said. As such, Fore sees plenty of opportunities to expand
the boundaries of their cooperation. More supplier agreements? Definitely. A
shared TMC relationship? A singular booking tool? Shared service structure?
Maybe. Members see all sorts of potential.
This report originally appeared in the August 2015 issue
of Travel Procurement.