12 Aug Could Your Nonprofit Benefit from Outsourcing?

By Jackie Sue Griffin, MBA, MS

Outsourcing essential business operations, such as accounting, IT services or HR, to specialized professionals may seem like a daunting task for your small nonprofit. It requires money, time and effort to find vendors that both specialize in the needed area and who will not break your budget.

However, outsourcing also allows your nonprofit to free itself from tasks your existing team cannot efficiently handle and recovers valuable time that you could refocus on mission delivery.

If you’ve been wondering how to regain control of your team’s time or whether you’re ready to outsource, ask yourself these questions:

1. Does Your Team Lack Essential Skills for the Specific Services?

Take a good look at the people and skills you already have within your nonprofit before outsourcing. Are your employees skilled enough to manage these business operations in-house? Do they have the necessary knowledge to be relied upon in this area (Think: can your accounting person truly prepare your financials—or will you be risking a funder or government audit)? If your program director also takes on HR, will they still have time to develop and deliver your programming? Maybe some additional skills training or education can help shore up some knowledge gaps over time, but do you want to take that time and risk? It may be time to look for a vendor that can do it (HR, IT, or accounts payable) for you.

2. Would Outsourcing Save Money and Time?

One of the reasons nonprofits hesitate to outsource services is budgeting concerns. Outsourcing can be pricey depending on the vendor; however, hiring someone internally can cost even more in salary, benefits and the time it would take to train them. And how much time are you using to double-check their work or answer their questions?

Feel free to shop around; the right vendor may cost less than a full-time employee and can provide your nonprofit with a dedicated team specialized in certain services, saving you both time and money.

3. How Could Outsourcing Support Your Goals?

If outsourcing HR and IT meant that you could spend more time fundraising, would that get you closer to your annual fundraising goal? If your outreach coordinator wasn’t also your part-time bookkeeper, could you bring more beneficiaries into your programs and services?

Understanding the amount of time you could recoup and how you could redeploy your existing team members with outsourced support for business processes can go a long way toward positioning your organization to make it to the next level of operations, funding and donor support.

Benefits of Outsourcing

Here are a few of the most-mentioned benefits of outsourcing given by nonprofits:

• Reduced operational cost: The greatest advantage of outsourcing services in different business processes such as accounting and HR, marketing, fundraising and other domains is a significant reduction in operational cost. Savings in salaries and benefits can be significant, as well as the training cost incurred when staff moves on.
• Access to skilled talent: Finding skilled talent for specific processes is a significant challenge in today’s new reality. That’s why outsourcing is beneficial: It allows nonprofits to gain valuable support staff and quickly achieve the desired objectives.
• Increased performance: Outsourcing helps small and medium-sized nonprofits to improve their performance and productivity in all major business processes.
• Greater focus on core activities: Outsourcing the less important activities to vendors allows nonprofits to dedicate more time to their core activities. Thus, the focus can remain on the primary goals of the organization.