Evaluating the Sourcing Challenges Faced by Humanitarian Charities

Abstract

The COVID-19 outbreak has had a knock-on effect on the humanitarian supply chain. This research aims to identify the sourcing barriers in humanitarian charities’ supply chains and evaluate the interrelationships between the identified barriers. The agency theory and institutional theory are employed as the theoretical rationales to comprehend the value chain and operations of the humanitarian charity. To identify sourcing barriers related to humanitarian charities, a literature review and focus group discussion are conducted. Following the fuzzy Delphi method (FDM), 10 key barriers are chosen for further investigation. Finally, total interpretive structural Modeling (TISM) and matrix of cross-impact multiplications applied to a classification (MICMAC) are applied to further investigate the interrelationships among barriers and rank their priority. The findings are highly useful for the decision-makers to develop potential interventions based on the identified priorities.

1. Introduction

The rate of disasters is expanding year by year around the world. The rate of death because of disasters is predicted to be growing over the next 50 years [1]. Humanitarian aid operations have therefore emerged as a new area of interest to researchers. In parallel to this, the increasing complexity of humanitarian aid activity creates a vital need for an efficient humanitarian supply chain (HSC) [2]. As humanitarian supply chains are increasingly disrupted by extreme weather, price volatility (e.g., grain, gas, oil), pandemics (such as COVID-19), and terrorism, humanitarian supply chain practices may no longer assume a stable operating environment [3, 4]. For example, the COVID-19 outbreak has caused ripple effects throughout the humanitarian supply chains (HSCs) [5]. Therefore, investigating the barriers that mitigate the effects of disruptive consequences is critical. To improve the resilience of the humanitarian charity supply chain and take advantage of the opportunities, this paper aims to identify the sourcing challenges in the humanitarian charity supply chain.

Although previous studies have illuminated the operations of humanitarian charities in various aspects, such as donor behavior [6, 7], charitable giving [8, 9], and logistics issues [10], relatively limited research has been conducted to date on the sourcing challenges faced by humanitarian charity supply chain. Since the late 1980s, the image of charities has shifted from poor secondary trading outlets to primary high street shops as a result of professional management skills [11, 12]. Today, the number of charities in the United Kingdom has risen to over 11,200 [13], making it difficult for charities to source high-quality items due to intense competition and an economic downturn [6]. Furthermore, because donations from individuals/organizations are highly stochastic in nature, charities face challenges in ensuring consistent high-quality donations. Thus, it is necessary to identify and evaluate the sourcing barriers that inhibit the resilience of humanitarian charity supply chain. Therefore, the purpose of this paper is to (1) comprehend the value chain and current operations of humanitarian charities, and (2) assess the barriers to sourcing in humanitarian charities. To achieve the research goal and fill research gaps, this study addresses the following research questions: Q1: What are the major sourcing barriers in humanitarian supply chains? Q2: How do these barriers interact with one another?

The rest of this chapter is structured as follows. Next section contains a review of the literature. Following that, the research methodology is presented. Ten key barriers are selected for further investigation after applying the fuzzy Delphi method (FDM). The total interpretive structural modeling (TISM) and matrix of cross-impact multiplications applied to a classification (MICMAC) are applied to further examine the interrelationship among barriers and rank these barriers by priority. The research findings, implications, and limitations are then presented. Finally, it concludes with a discussion of the future scope of research.

2. Literature review

This section employs the agency theory and institutional theory to comprehend the value chain and operations of humanitarian charities. The value chain assists in conceptualizing the sourcing process of charities. Then, it provides a literature review of related sourcing barriers.

2.1 Agency theory and institutional theory

Agency theory is a principle that is used to explain and resolve problems in the relationship between principles and agents [14]. Problems arise as a result of information asymmetry when the agent (for example, the humanitarian charities) represents the principal (for example, the donors), as it is difficult for the principal (donors) to track what the agent (humanitarian charities) is doing [6]. Principals may face risks as a result of this [15]; hence, to address the aforementioned principal-agent problems and ensure donation continuity, it is becoming increasingly important for the charities commission to establish strong governance and accountability [16]. Corporate governance within the charity sector may be referred to as the process of charities discharging accountability to their donors (how they spend funds to support the beneficiaries). In terms of accountability, charities act as a middleman, receiving donations from donors and selling them to raise funds to support the intended beneficiaries [6]. Understanding the process from sourcing donations to supporting the intended beneficiaries helps to capture the value chain and operations of humanitarian charities.

Furthermore, the institutional theory could be used to supplement the agency theory and provide a more comprehensive understanding of the role of the first-tier supplier in a multi-tier supply chain [17]. This expands on the concept of charity governance, which considers all issues related to charities to reduce risk and institutional pressure. Moreover, each charity is embedded in its own institutional environment, which may influence how charities respond to donor pressure [18]. Even if charities operate in the same institutional field, they may have different external constituents (for example, donors, beneficiaries, consumers, and regulators) who exert institutional pressure. This institutional pressure frequently results in the decoupling of adopted policies or actual practices by businesses [17, 19]. This is because charities, on the one hand, want to gain legitimacy to meet the demands of institutional stakeholders, such as converting donor donations into funds to support target beneficiaries. However, it is constrained by certain circumstances, such as the required expertise to deal with sourcing barriers [6]. Furthermore, natural disasters, diseases, terrorism, political turmoil, and other factors have all severely disrupted the normal day-to-day operations of humanitarian charities [5, 20]. For example, the recent COVID-19 outbreak revealed that unprecedented uncertainty had impacted normal supply patterns, potentially disrupting the sourcing systems of humanitarian charities. Hence, to understand the sourcing barriers, it is necessary to first comprehend the value chain of humanitarian charities under different institutional environments and pressures.

As illustrated in Figure 1, charities collect donations through several following channels: donors visiting charities to donate; donors dropping bags in collection points such as clothing banks, and book banks; donors using free pick-up services; charities acquiring stock from commercial retailers and warehouses. The high-quality items are then kept in the local charities after arriving at the storage facility. High-quality items are displayed for sale in shops after sorting. If items are unable to be sold during a specific period, some charities will circulate them between shops or transport them to the central warehouse. If a charity has no central warehouse, the low-quality and unsold items will be collected by the recycling company for other eco-friendly use. If a charity has a sorting warehouse, for example, Oxfam has their sorting warehouse in Batley, UK, poor quality items and unsold items will be transported to this sorting warehouse, where experts hand sort these items and decide where they should go next. Some items are typically resold in an online store, a festival store, or a high street store. If not, the items will be recycled for future use. Most charity’s daily works are done by volunteers. Charities rely heavily on volunteers to keep their operations running smoothly and to provide a positive customer experience. Charities set donation prices according to head office policies, raise awareness through multi-channel advertising from headquarters, and promote loyalty programs to manage customer relationships.

Figure 1.

The value chain of humanitarian charities.

2.2 Sourcing barriers

With an expanding number of disasters disrupting people’s lives, humanitarian charities assist those in need by providing clothing, food, and personal hygiene products. The increasing complexity of humanitarian aid activities necessitates the establishment of an effective humanitarian supply chain [21]. Based on their respective business models, charities collect donated items for sale to raise funds to support humanitarian aid activities [22]. Yet, the donations received are highly stochastic in nature. Due to the uncertainty regarding the quantity and quality of received donations, charities face significant sourcing barriers. Based on the literature review and focus group discussion, 14 related sourcing barriers (B1–B14) are summarized in the following section.

Sourcing barriers can arise as a result of a supplier’s operational inefficiency, variations in product quality and quantity, logistics and transportation delays, or a lack of coordination between the supplier and the firm [23, 24]. Because COVID-19 infections are expected to spread in waves over the next few years, further disrupting supply chains [25], charities may face insufficient donations (B1) from donors as well as seasonal fluctuations in supply (seasonality) (B2). The increased emphasis on supply and demand risk has highlighted the importance of risk management in business. Firm profits may be reduced by both high supply and high demand risks [26]. Because charities have limited control over the input, it is unknown how many donations can be received at any given time. This may lead to supply fluctuations. Thus, charities may encounter specific issues such as excess inventory, stock-outs, and a mismatch between demand and supply at certain times.

The persistence of the emerging COVID-19 pandemic has heralded a new era in the world, even as we continue to grapple with the crippling effects on various aspects of our daily lives [27]. The high street retail sector is no exception, and it is in the spotlight, as evidenced by images of long lines forming in front of retail shops after they reopen, which have flooded social media. Despite the government’s guarantee of price stability, COVID-19 has revealed inherent flaws in the resilience of UK charities. Another major obstacle is the location of the store/collection nodes (B3). The traditional method of determining the location of a charity shop is based on the potential customer base and the competition. There is a growing body of research focusing on the ability and availability of data sources for store location forecasting. Although these are not specifically for charity shops, they have been successfully implemented in a variety of retailing sectors. Location has a significant impact on charities’ exposure [6]. Charities on main streets help to raise awareness [28], but they also pose challenges for donors who need to get rid of large items because it may be difficult to find parking to access shops. Meanwhile, those charities with limited collection methods (B4) may encounter difficulties in collecting large donations such as furniture. To encourage donations, some charities offer free pick-up services. Some charities hire third-party logistics companies to collect donations [20, 22, 23]. However, some charities may be unable to provide free pick-up services (B12) due to limited financial resources. Moreover, some charities may be able to afford to let donors choose suitable time slots. Most charities, on the other hand, usually post the donation bags and then pick them up at specific times. People who received donation bags may not have items to donate at that time. When they have items to donate, however, they may have already missed the time slots [6]. Furthermore, while some charities with their own logistics may be able to provide free pick-up service a few times per week, others with a limited budget may not be able to.

Another sourcing barrier is poor-quality donations from their suppliers (donors) (B5). The importance of quality sourcing in improving organizational performance has been acknowledged in the relevant management literature [29]. Firms would be able to reduce risks by improving sourcing quality and eliminating uncertainties, and a supplier’s financial stability and ability have a significant impact on sourcing quality [29]. Charities used to report that up to 80% of donated items were rejected due to poor quality [22]. The high-quality donations demonstrate a high priority to some professionalized charities. Charities have become more professional over the last two decades, and they would rather recycle low-quality items than risk their reputation by selling them [30]. However, because of the current economic uncertainty, people may keep items for longer rather than donate them. Thus, charities may continue to struggle to secure high-quality items to sell.

Supply chain management involves making thousands of decisions daily, including decisions on prices, storage levels, operational schedules, etc. These decisions have an impact on the firm’s profitability [21]. Many charity shops are located on the main street, where storage space is limited (B6). The inventory is difficult to manage due to the variety of donated items and the limited storage space. Furthermore, due to the limited pricing strategy (B8), items may not be sold at a reasonable price or may never be presented in the shop before being recycled. It may have an impact on the profitability and sustainability of charities. The following criteria are important in determining the price: the item’s quality, the location of the charities, the brand name, the local competition, and the price as new [22]. Furthermore, some donors may want the best price for their items. The best price reflects the value they place on their donated items and is viewed as a reflection of the donors’ socioeconomic status [22]. Hence, a dynamic pricing strategy may be needed for charities to meet the different needs of stakeholders.

Another sourcing barrier related to the supply chains of humanitarian charities is a lack of communication between donors and charities (B7). Humanitarian disasters are occurring at a higher rate than ever before, and the need for humanitarian assistance is expected to grow even more [31]. Humanitarian supply chains (HSCs) have become more transparent as information technology has advanced [21, 32]. However, improved HSC data have not yet resulted in a more efficient and effective response [3, 33]. Disasters disrupt established information and communication infrastructure, obstructing the channel for gathering real-time information from stakeholders and limiting the agility of humanitarian supply chains [21, 34]. This creates a chaotic and uncertain environment for charities, making it difficult for them to collect donations. Hence, humanitarian supply chains are plagued by a lack of real-time information or communication, resulting in ineffective supply coordination [35]. Thus, there is tremendous value in improving communication between donors and charities, as it is expected to increase effectiveness.

The long process time (B9) and lack of volunteers (B11) may affect the sourcing process of charities. Because donated items are of varying quality, the selection and cleaning activities are critical before presenting them for resale in charity shops [11, 22, 36]. These activities are frequently performed by volunteers. The initial work includes opening bags; categorizing donated items into different types, such as clothing, shoes, accessories, toys, and so on; and raging unsaleable items. This preliminary work is considered strenuous, and some volunteers refuse to do the initial work because it usually involves the worst aspects of used items: dirt, disease, and death [22]. Charities rely heavily on volunteers. Volunteers help out in the day-to-day operations of charities. For example, currently, over 230,000 volunteers work in charities in the United Kingdom. Some charity shops are even entirely run by volunteers [13]. Due to a lack of volunteers, some charity shops may not be able to open every day. The collection, sorting, and displaying of items become highly uncertain and take a long time.

The negative effects of the COVID-19 pandemic lockdown affect outbound logistics and consequently deteriorate sourcing performance in terms of delivery time [25, 29]. Because of the closures of charity shops during the pandemic lockdown, problems with logistics and transportation, as well as a lack of coordination between donors and charities, have become significant. Due to the lack of own logistics (B10), some charity shops may outsource the transportation activity. Some charities could offer free pick-up services by collaborating with third-party logistics. Instead of investing in their own logistics, this helps charities save money while also providing donors with convenience. Though logistic outsourcing can reduce logistics costs and improve service quality [37], a previous study [38] indicated firm performance and logistics outsourcing are not positively related. Charities such as Oxfam and the British Heart Foundation create their logistics to increase supply chain flexibility. When charity has its logistics, it has more leeway in establishing more flexible routines for collecting donated items. For example, charities with own collection logistics are able to offer a convenient free pick-up service whenever donors have the need. This helps to increase the brand awareness and keep donors loyal. Because ultimate convenience is a significant factor in encouraging donors to donate [22], charity with own logistics could afford to let donors choose the time slots; this provides donors with convenience. Furthermore, some charities acquire stock from commercial retailers. However, the current economic downturn, as well as the knock-on effects of COVID-19, poses operational challenges for commercial retailers. This could jeopardize commercial retailer-charity collaborations (B13: lack of partnerships between commercial retailers and charities). The latest figure showed the economic downturn affects 59% of charity shops, and the total dollar value that charity shops receive decreased by 13% at the peak of the economic downturn in 2018 [39]. Moreover, based on the analysis of donors’ intention to donate, a prior study [6] found that charity shops receive relatively fewer donations from young people (B14: lack of innovative ways to target younger donors). Thus, charity shops may need to innovate in their advertising to raise awareness of their mission and the impact of donations among young donors.

3. Research methodology

The 14 barriers identified through the literature review and focus group discussions are then accessed using the FDM method, yielding 10 selected barriers. Furthermore, expert opinions generated by the TISM and MICMAC analyses are used to establish the relationships between the barriers. TISM is an interactive learning procedure used to investigate relationships between some distinct and directly related factors [40]. The goal of an MICMAC analysis is to calculate the driving and dependent power of factors [41]. The hybrid method, which combines TISM and MICMAC analysis, has been used to clarify the complexities of factor relationships [21, 40]. Hence, it is appropriate for investigating the complex interrelationships of sourcing barriers. The research procedure for this study is depicted in Figures 2 and 3.

Figure 2.

Research procedure [6, 40].

Figure 3.

Total interpretive structural modeling (TISM) procedure [45].

3.1 Fuzzy Delphi method

We apply the FDM to evaluate and select barriers. The main advantage of the FDM technique is that it 1) considers and integrates every expert opinion; 2) allows expert opinions to be fully expressed and the inevitable ambiguity to be considered; and 3) builds consensus, determines the suitability of implementing instructional interventions, and interacts with research subjects without being limited by time and space [40, 42, 43]. In this study, 10 UK charity managers and four academics are invited to assess the listed barriers. The FDM process consists of four steps: 1) gather decision group opinions, 2) defuzzification, 3) screen evaluation indexes, and 4) set up triangular fuzzy numbers [44]. A minimum requirement of 65% agreement was adopted based on a majority vote of the experts, and the results yielded 10 of the 14 barriers for further investigation. The selected barriers, as determined by the FDM decisions, are shown in Table 1 and are labeled B1–B10.

Variable	Barriers	10	9	8	7	6	5	4	3	2
B1	Lack of sufficient donations	B	B	D	B	D	D	B	B	B
B2	Fluctuations in supply (seasonality)	B	D	D	B	D	D	B	B
B3	Location of the store/ collection nodes	D	D	D	D	A	D	D
B4	Limited collection methods	B	A	D	B	D	A
B5	Poor quality donation	D	D	D	B	D
B6	Limited storage space	D	D	D	D
B7	Lack of communication between donors and charities	B	A	D
B8	Limited price strategy	D	D
B9	Long process time	B
B10	Lack of own logistics for the collection

Table 1.

Structural self-interaction matrix.

3.2 Total interpretive structural modeling

The TISM technique aims to depict direct and significant transitive relationships in a graph [45], which is useful for understanding contextual relationships among the barriers. TISM uses experts’ skills and experience to break down a complex system into elements and build a multi-level structural model [40]. The TISM procedure used in this study is depicted in Figure 3, which was adapted from previous studies. First, 10 barriers are selected for TISM after conducting the Fuzzy Delphi Method (FDM). Then, the opinions of 10 charity managers and four academics are collected to identify the contextual relationship of each barrier by examining the pairs of variables. In step 3, a pairwise comparison of barriers is made to develop the structural self-interaction matrix (SSIM) (Table 1). The following four symbols are used to define the relationships among the barriers (A: If “”“ is a predictor of “j”; B: If “j” is a predictor of “i”; C: If “I” and “j” predict each other. D: If none predict each other). In step 4, the experts are expected to describe the rationale behind such a relationship based on a pairwise comparison of these ten barriers. For example, they do not simply provide opinions on the potential of barrier 1 to influence/improve barrier 2, but rather provide a comprehensive description of how barrier 1 could influence/improve barrier 2. Table 2 depicts an illustrative example of an interpretive logic-knowledge base. In step 5, the reachability matrix is created while taking transitive checks into account. Using the following rules, we create the initial reachability matrix: (i, j) is 1 if (i, j) in SSIM is A or C; (i, j) is 0 if (i, j) in SSIM is B or D; (j, i) is 1 if (i, j) in SSIM is B or C; (j, i) is 0 if (i, j) in SSIM is A or D. After that, the initial reachability matrix is checked for transitivity. If barrier 1 is related to barrier 2 and barrier 2 is related to barrier 3, the transitivity rule applies, implying that barrier 1 is related to barrier 3. Transitivity was deemed significant and was adopted when experts’ opinions were in agreement or a majority agreed on the relationship. Following the transitivity check, the final reachability matrix is created, as shown in Table 3.

Variable	Barriers	Contextual Relationship	Interpretation
		Will Barrier 1 influence/enhance Barrier 2…Barrier 10?	How Do You Think Barrier 1 influence/enhance Barrier 2…Barrier 10?
1	Lack of sufficient donations
2	Fluctuations in supply (seasonality)
.	.
.	.
.	.
10	Lack of own logistics for the collection

Table 2.

Sample interpretative logic-knowledge base.

#	Barriers	1	2	3	4	5	6	7	8	9	10	DP
1	Lack of sufficient donations	1	0	0	0	0	0	0	0	0	0	1
2	Fluctuations in supply (seasonality)	1	1	0	0	0	1	0	0	1	0	4
3	Location of the store/ collection nodes	1	1	1	1	0	1	1	1	0	1	8
4	Limited collection methods	1	1	1	1	1	0	1	0	1	1	8
5	Poor quality donation	0	0	0	0	1	0	0	0	0	0	1
6	Limited storage space	0	1	0	0	1	1	0	0	1	0	4
7	Lack of communication between donors and charities	1	1	1	1	1	0	1	0	1	1	8
8	Limited price strategy	0	0	0	0	0	0	0	1	0	0	1
9	Long process time	1	1	0	0	1	1	0	1	1	0	6
10	Lack of own logistics for collection	1	1	1	1	0	0	1	0	0	1	6
	Dependence	7	7	4	4	5	4	4	3	5	4

Table 3.

Final reachability matrix.

In step 6, the final reachability matrix is then partitioned based on the driving power and dependence of the barriers. The details of level partitioning are presented in Table 4. The reachability set for a selected barrier includes both the barrier and the barrier it influences. The antecedent set, on the other hand, includes the barrier itself as well as other barriers that may help achieve it. The intersection set displays the barriers found in both the reachability and antecedent sets [45]. When the intersection set and reachability matrix of a barrier are identical, it is ranked as the first level barrier. This iteration will be repeated until the levels of each barrier are determined. In this case, three iterations are performed to determine the level of each barrier. The three recognized levels contribute to the formation of the directed graph and, consequently, the TISM model. In step 7, a digraph is created that depicts the graphical structural relationship of the barriers, with the last level at the bottom and the first derived levels on top. The final digraph is then used to generate a binary interaction matrix in step 8, and the TISM model is created as the final step of the procedure (Figure 4).

Barriers	Reachability	Antecedent	Intersection	Levels
				Iteration 1
1	1	1,2,3,4,7,9,10	1	I
2	1,2,6,9	2,3,4,6, 7,9, 10	2,6,9
3	1,2,3,4,6,7, 10	3,4,7,10	3,4,7,10
4	1,2,3,4,7,9, 10	3,4,7,10	3,4,7,10
5	5	4,5,6,7,9	5	I
6	2,5, 6, 9	2,3,6,9	2,6,9
7	1,2,3,4,7,9, 10	3,4,7,10	3,4,7,10
8	8	8,9	8	I
9	1, 2, 6,9	2,4,6,7,9	2,6,9
10	1, 2,3,4,7,10	3,4,7,10	3,4,7,10
				Iteration 2
2	2,6,9	2,3,4,6, 7,9, 10	2,6,9	II
3	2,3,4,6,7, 10	3,4,7,10	3,4,7,10
4	2,3,4,7,9, 10	3,4,7,10	3,4,7,10
6	2, 6, 9	2,3,6,9	2,6,9	II
7	2,3,4,7,9, 10	3,4,7,10	3,4,7,10
9	2, 6,9	2,4,6,7,9	2,6,9	II
10	2,3,4,7,10	3,4,7,10	3,4,7,10
				Iteration 3
3	3,4,7, 10	3,4,7,10	3,4,7,10	III
4	3,4,7,10	3,4,7,10	3,4,7,10	III
7	3,4,7,10	3,4,7,10	3,4,7,10	III
10	3,4,7,10	3,4,7,10	3,4,7,10	III

Table 4.

Level partition of the reachability matrix.

Figure 4.

Final TISM model.

3.3 Classification of barriers: MICMAC analysis

The TISM results are expanded further by employing the MICMAC method to calculate driving and dependence powers and classify barriers. The driver power dependence figure (Figure 5) provides some useful information about the relative importance and interdependence of the barriers. In the classification of barriers, the MICMAC method examines hidden and indirect relationships and assesses how much they influence each other [45]. The barriers are clustered based on their respective driving power and dependence, as presented in Figure 5. There are four types of clusters. Barriers with low driving power and low dependence are clustered as autonomous barriers. Barriers that have low driving power but high dependence, such as lack of sufficient donations or fluctuations in supply, are clustered as dependent barriers. The barriers such as the location of the store, limited collection methods, and lack of communication between donors and charities, which have high driving power but low dependence, are clustered as independent barriers. It is to be noted that the barriers with high driving power and high dependence are called linkage barriers. These barriers can make the entire system very volatile as a minor fluctuation in these barriers can have a significant impact on the entire system. It is found that none of the barriers is clustered as linkage.

Figure 5.

Classification of the barriers.

4. Results

First, the TISM hierarchy (Figure 4) ranks the barriers that significantly affect the sourcing in humanitarian charities’ supply chains. The lower-level barriers drive the barriers partitioned to upper levels. The TISM model shows that lack of own logistics for collection (B10), lack of communication between donors and charities (B7), location of the store/collection nodes (B3), and limited collection methods (B4) are at the bottom, indicating that they have a significant impact on the system. Furthermore, according to the barrier classification figure (Figure 5), these four barriers have very high driving power and are thus regarded as the most important barriers. Thus, charities should accord high priority to dealing with these barriers.

Second, the TISM model (Figure 4) shows that the middle-level barriers are fluctuations in supply (seasonality) (B2), long process time (B9), and limited storage space (B6). These three barriers complement one another. The classification of the barriers figure (Figure 5) also shows that long process time (B9) has a higher driver power and dependence than the other two drivers. Thus, this barrier has a greater impact on the charities’ sourcing process. Hence, managers should pay closer attention to this barrier.

Third, it is observed that the lack of sufficient donations (B1), poor-quality donation (B5), and limited price strategy (B8) are the top-level barriers in the TISM hierarchy. In addition, the driver power dependence diagram (Figure 5) shows that poor-quality donation (B5) and limited price strategy (B8) are autonomous variables. These variables with weak drivers and weak dependents have little impact on the system. Charities should therefore accord low priority to dealing with these barriers.

5. Discussions and implications

This research contributes to both theory and practice. In terms of theory, this study extends the literature on the sourcing challenges that charities face. First, this study employs agency theory and institutional theory as theoretical foundations to comprehend the value chain and operations of the humanitarian charity. Thus, this study contributed to the literature by investigating the application of the aforementioned combined theories in the charity sector. Second, the sourcing barriers in the charity sector have yet to be comprehensively synthesized in a coherent model and empirically tested. There is also limited literature on using the combined techniques of the fuzzy Delphi method (FDM), total interpretive structural modeling (TISM), and matrix of cross-impact multiplications applied to a classification (MICMAC) in empirical research related to humanitarian charity. Using the abovementioned combined techniques, this study investigated charities’ sourcing barriers as well as their interrelationships, filling a significant gap in the literature on the resilience of humanitarian charity supply chains.

In terms of real practice, this study offers valuable insight into assessing the sourcing barriers faced by humanitarian charities. The findings are highly useful for managers and decision-makers in developing potential interventions. First, as discussed in the previous section, when dealing with the above 10 sourcing barriers, the lack of own logistics for collection (B10), lack of communication between donors and charities (B7), location of the store/collection nodes (B3), and limited collection methods (B4) should be given the highest priority. In terms of the limited collection methods (B4), charities have traditionally relied on donors to donate unwanted clothes voluntarily. Because of the increased competition, charities are finding it extremely difficult to obtain supplies; thus, they are looking for alternative options. Some charities, for example, may acquire stock from commercial retailers, circulate stock between charity shops, display donation banks, and distribute donation bags [11, 12, 20, 22, 46]. However, collection methods are still disorganized [47]. Providing the ultimate convenience is a significant factor in encouraging donors to donate. Donors appear to find free pick-up/door-to-door collection convenient. However, door-to-door collection may be complicated due to the following factors: charity loyalty, collection frequencies, collection time slots, and the time of year (charities may experience supply fluctuations during special holiday periods). Donors’ lack of information makes it difficult for charities to determine collection frequencies and time slots efficiently. Furthermore, some charities advice donors to leave donation bags outside their homes during certain times of the year; however, these donated items are vulnerable to theft when left outside.

Furthermore, the location has a significant impact on the awareness and exposure of charities [6, 22]. Because high rents are associated with high street locations, charities may consider whether it is worthwhile to make such a significant investment in location. Some charities are located in high-traffic areas to attract donors and buyers. However, this may harm donations because donors may find it difficult to “park and drop” in these charities [6]. Another interesting point to investigate is whether or not buyers on the high street purchase from charity shops. Ideally, charity shops should be located in low-income areas close to the target customers [6, 12].

Furthermore, some charities have their logistics for collecting donations. It allows them to cover a large geographical area while also balancing their inventories [12]. However, some charities still rely on the donor to donate the items using their transportation. Some charities outsource logistics. Logistics activities are classified into four levels: packaging, transportation, transportation management, and distribution network management [37, 48]. Charities with own logistics have more freedom to circulate stock between shops and send oversupplies to nearby shops or central warehouses. Donated items are sent to Oxfam’s central warehouse, for example, may be distributed to other Oxfam charity shops, Oxfam’s Festival shops, Oxfam’s online shop, and Oxfam’s replying plant. This increases the chances of selling the donated items.

Second, as previously discussed, the barriers such as fluctuations in supply (seasonality) (B2), long process time (B9), and limited storage space (B6) should be given medium priority. In terms of long process time, charity operations necessitate processing time when collecting, sorting, and disposing of used items. Some charities provide free pick-up services. However, the time between receiving the phone call and picking up the donated item may be longer than donors anticipate. Donors may cancel their contributions due to the long lead time. Furthermore, charities have sourcing policies, and some items are not accepted. When securing stocks, charities should adhere to a few pieces of safety legislation as well as recycling and waste regulations. Before donating, donors are encouraged to review the list of donations that charities may accept. Some items, such as toys without the CE mark, second-hand children’s shoes except wellington boots, jellies and flip flops, items made of fur, religious items, and golliwog-related items, cannot be accepted by charities due to hygiene and desirability [49]. People may want to get rid of the items and fail to check the list of donations that charity cannot accept. It may result in a lengthy sorting process for charities.

Furthermore, some charity shops are located on the main street. They would prefer a large display space to attract buyers, but to keep operating costs low, the overall space is kept to a minimum [50]. However, when stock levels are high, the limited storage space poses a problem for those charities without a central warehouse to deal with oversupplies. Moreover, some donations may not apply to the current season. Sorting and storing non-current season donations are a challenge for charities with limited storage space.

Additionally, there is a significant seasonality effect in donations, as donors see charities as a good way to get rid of unwanted items [6, 22]. Charities have limited control over the level and nature of the inputs. This causes significant supply fluctuations. Charities may benefit from seasonal clear-outs at certain times of the year. For example, people may have done a mass clean-up around Easter. However, when the demand for gifts spikes during the Christmas and New Year’s holidays, some charities may lack sufficient donations. Researchers investigate how the nature of the disruption affects the firm’s risk management strategies, and their results indicate firms’ ability to recover from inadvertent disruption is dependent on their ability to return to the previous supply chain [51, 52]. Hence, when there aren’t enough donations, charities may try to encourage more by, for example, distributing more donation bags. When inventory levels are high, charities may use an inventory-based dynamic pricing strategy to reduce inventory holding costs and stimulate demand.

Third, in comparison to the previous seven barriers, the findings indicate that the following three should be given the lowest priority: lack of sufficient donations (B1), poor-quality donation (B5), and limited price strategy (B8). Concerning the limited price strategy (B8), standard pricing guidelines for donated items must be followed for all donated items. The prices in charities are fairly fixed, with little room for discounts or bargains. It is because senior management believes that, unlike commercial retailers, charity shops should not sell goods at prices below a certain threshold [38]. However, the dynamic pricing strategy may be more effective in encouraging donation flows. If the product’s inventory reaches a certain level, the price may be raised [53]. Furthermore, dynamic pricing is an effective profit-boosting strategy. It is most effective when combined with inventory replenishment decisions [54]. Previous research on joint inventory replenishment and pricing problems shows that a high inventory level provides the company with an incentive to lower the price to reduce inventory holding costs and stimulate demand [55]. Hence, to maximize profit, charities could use inventory-based dynamic pricing strategies. When there is an oversupply of donated items, charities may lower the price and raise the price when the inventory level is low. Furthermore, pricing donated items is often complicated due to the variety of donations of varying quality. Although there is a rough guideline in some online second-hand exchanging marketplaces that the price is 20% below the market value [56], this may not be appropriate for all items. Thus, the headoffice of charities should make strategic pricing guidelines.

Furthermore, the nature of the donations received is highly stochastic. The condition ranges from like new to unusable. The variations in quality can be attributed to a variety of factors, including natural wear and tear, mishandling, and so on [6]. Furthermore, some discount stores, such as Primark, pose a competitive threat to charity shops. Because they can afford new items at charity shop prices, this type of discount store detracts from the appeal of the charity shop. Purchases of low-cost, short-life items, on the other hand, may have an impact on subsequent consumption cycles. If this type of discount store becomes popular, it may have an impact on the quality of donated goods in the future. Hence, charities should raise consumer awareness of sustainability and promote reuse and recycling projects.

Furthermore, according to Figure 5, a lack of sufficient donations (B1) is a weak driver that is heavily reliant on other barriers. Thus, this barrier is critical, and managers must exert greater effort in dealing with it. Donations are becoming increasingly difficult for charities, especially as the number of charities increases. As charities become more commercial, they are looking into alternative ways to secure stocks. There is increased competition among charities to obtain high-quality items [6, 22, 41, 47]. Online marketplaces are another major competitive threat to charities. Gumtree, Vinted, Depop, and Shpock are a few examples of online marketplaces for selling second-hand items locally. These online marketplaces are simple and convenient to use. People who want to declutter their belongings only need to take a few photos of used items and publish them online in a matter of seconds. The growth of today’s sharing economy has helped to reshape people’s attitudes toward used items and increased demand for used goods. Gumtree, the UK’s number one local community classifieds, is used by one in every three adults each month [56]. Hence, instead of donating items to charities, people can now swap used items through an online marketplace, or they can easily sell used items online for a small fee. Hence, to compete with the for-profit online marketplace and encourage more donations, charities may need to take practical steps. For example, charities may use online social media to increase brand awareness to attract the attention of these online marketplace users.

6. Limitations

Some limitations of this study could be addressed in future research. First, this study is limited to UK charities, limiting the generalizability of our findings to other countries and industries. Second, while the barriers were identified after a thorough review of the relevant literature and a combination of analysis techniques, it cannot be concluded that this research has identified all possible sourcing barriers. Furthermore, while there have been many studies on supply chain management, research on sourcing barriers in humanitarian charities’ supply chains has been relatively limited. This study contributes significantly to ongoing studies on the resilience of the humanitarian charity supply chain by illustrating the value chain of charities, identifying the sourcing barriers and assessing the interrelationships among them. We hope that this study spurs researchers’ interest in overcoming these barriers and improving the resilience of the humanitarian charity supply chain.

7. Conclusion

COVID-19 has caused significant disruptions in many industries’ supply chains [57], including the charity sector. The operating environment of charities is marked by high levels of uncertainty and complexity, making them vulnerable to supply chain disruptions. This study investigated the barriers to sourcing in humanitarian charities’ supply chains. Some barriers, such as extra space or own logistics, can be overcome by investing, but others, such as poor-quality donations, seasonal donations, and so on, will necessitate educating the population and changing their behavior, which will be extremely difficult. The findings are extremely useful for decision-makers in developing potential interventions to address these barriers. Researchers may be inspired to look into other issues to improve the resilience of humanitarian charity supply chains if they further investigate and overcome these barriers.