Report on Outsourcing Back-Office Services in Small Nonprofits

Ok, I know I haven’t posted in a long time… I’ve actually been waiting to post, purposely! However, this one couldn’t wait. It’s a great article…

The current economic situation has only intensified the ever-present need of executives of small and mid-sized nonprofits to find cost-effective ways to reduce overhead costs. According to a new report released by the Meyer Foundation and the Management Assistance Group (MAG), outsourcing is a promising strategy for these nonprofits to meet their back-office needs, but there are many barriers that prevent outsourcing success.

The study, “Outsourcing Back-Office Services in Small Nonprofits: Pitfalls and Possibilities,” is based on a survey of grantees of the Foundation, interviews with grantmakers, consultants, and a range of back-office service providers, and a review of current literature on the subject. The goal for the collaboration was to survey and identify alternative back-office services that could strengthen operations, relieve the pressures on executive directors, and lead to greater efficiencies, particularly in this difficult economic climate.

Key findings include:

  • Outsourcing may not offer short-term cost savings but can offer significant long-term benefits and cost savings.
  • Current business models for outsourcing are often not well suited for serving small to mid-sized organizations, many of which are complex and have significant unmet needs.
  • There is a significant opportunity for business entrepreneurs with a deep knowledge of and sensitivity to the nonprofit sector and innovative new business models.
  • Areas most in need of better solutions include human resources, marketing and communications, and financial planning.
  • Barriers that prevent nonprofits from outsourcing back-office services include the inability to find specialized skills at a reasonable cost, lack of time to find and contract with providers, and negative past experience.
  • The 48-page study offers ideas for grantmakers, back-office service providers, nonprofit executives, and business entrepreneurs as they consider how to better meet the back-office needs of nonprofits and proposes a framework for evaluating outsourced back-office services.

    Follow these links to the actual reports…

    EXECUTIVE SUMMARY
    FULL REPORT

    Source :: Meyer Foundation

    5 Comments

    1. Posted October 4, 2012 at 3:37 am | Permalink

      Not just small non, profits, but outsourcing of Back Office Services surely helps small-businesses too. And my experience tells me that you will get both short-term and long-term savings!
      Thanking You,

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