Focus on Mission by Outsourcing Back-Office Tasks
The nonprofit sector is mission driven, and each nonprofit devotes resources to achieve their unique mission. Whether the mission is to shelter the homeless, deliver meals to the homebound, showcase modern art, or rescue animals, pursuing the mission requires strategic business skills essential to operating the organization.
This is why many executive directors of small- and medium-sized nonprofits spend countless hours entering financial information into accounting software, managing human resources, writing grant proposals, and marketing.
Tasks Suitable to Outsourcing
While for-profit companies have outsourced tasks unrelated to service-delivery for decades, the nonprofit world is just beginning to discover the benefits of outsourcing. In my experience, organizations often successfully outsource in four key areas.
Finance: An accounting or bookkeeping firm performs your core finance office functions, such as entering income and expenses, writing checks, filing financial documents, running reports, closing books at the end of each financial period, and working with the auditor. The Executive Director and Board must still maintain oversight of the process, but a firm provides the professional expertise.
Human Resources: A human resources professional can post job openings, screen candidates, conduct job interviews, ensure government compliance in the onboarding process, conduct annual trainings, review pay scales, manage HR files, and structure the annual review process.
Grant Writing: Grant writing firms typically create an annual grant calendar that details the funding sources, proposed program, and funding deadlines for the next twelve months. They can also write the proposals.
Marketing: Few of us entered the nonprofit sector in hopes of designing beautiful newsletters, creating Facebook campaigns, maintaining a stunning website, or creating the perfect table top display. These are also ripe for outsourcing.
Benefits of Outsourcing
Small and medium size organizations gain many benefits from outsourcing core business functions, including (a) mission; (b) scalability; (c) access to a higher level of expertise; (d) flexibility; and (e) networking.
An organization’s mission is probably the most important benefit of outsourcing business tasks. An outsourced task no longer requires occupancy costs or staff supervision. Additionally, using a firm ensures greater continuity so that the organization does not have to hire and orient new staff for these critical positions.
The scalability of contracts ensures that a nonprofit can simply negotiate more hours/service from the firm or contractor as the organization grows. Since contractors and small firms are typically more scalable than an employee’s time, this facilitates faster growth of your organization.
Outsourcing to a firm with multiple associates also provides the organization access to a higher level of expertise. As an example, an organization may need a bookkeeper one day each week but require an experienced accountant monthly to close the books and annually to prepare for the audit. By outsourcing to an accounting firm, the organization pays a bookkeeper rate for daily work and an experienced accountant rate for higher-level functions.
An additional benefit that contractors and consulting firms provide is the flexibility to meet periodic needs. If an organization only needs a quarterly newsletter produced, for example, a designer can meet this need without creating a new staff position.
Finally, engaging contractors and consulting firms has the ability to increase or strengthen an organization’s network. A grant writer, for example, may have pre-existing relationships with several funders, and an HR contractor likely knows many prospective candidates for executive-level openings.