Outsourcing Back Office Operations: Optimizing Your Nonprofit Agency
Never before have founders and CEOs of midsize nonprofit organizations been faced with the challenges they are faced with today. In the last five years, c-suite executives have been faced with roller-coaster fundraising years, huge economic swings, a pandemic, and a changing workforce. Decision-makers have been forced to continually balance and evaluate their intended impact and changing business realities more often than ever. However, a growing number of organizations have begun to outsource their back-office operations and are seeing success managing their costs and refocusing their workforce on directly impacting their exempt purpose.
What are “Back-Office Operations?”
“Back-office operations” is a catch-all term used to describe functions that are not related to your exempt purpose. Bookkeeping, email marketing, website management, managing facility maintenance crews, and more all fall under this umbrella. Organizations choose to outsource when they would either like to hire a leader in the field of need or they aren’t in need of a full-time hire but require the expertise for which they do not have available on their current team. Whether organizations require the optimization of cost, the deployment of specialized skills, or to supplement their team with expertise in unique areas, one thing is certain, outsourcing can be an excellent way to build a nonprofit’s future and secure its present in unprecedented times.
What can an Organization Outsource?
When considering bringing on an outsourcing firm, there are a number of services that can be outsourced with varying levels of ease. Typically, these services are the ones that are not aligned with one’s core business. For instance, if you work for a nonprofit advocacy firm, outsourcing your organization's marketing is likely to be less successful than if you were to outsource your human resources department. If a grant foundation chose to outsource their bookkeeping, that would be less advisable versus outsourcing their website management. Here are some common services that nonprofit organizations outsource:
Financial management and bookkeeping.
Human resources and payroll processing.
IT and technology support.
Data management and analysis.
The most important thing when choosing what you’re going to outsource, is to make sure that you outsource in a method that sets you up for success.
How to Outsource Successfully
When the management of an organization is considering outsourcing some of their operations, there are 5 best practices to keep in mind:
Define Clear Objectives
Ensure that you and your vendor have a clear understanding of exactly what is meant to be accomplished in your budding partnership.
Choose the Right Vendor
When choosing a vendor, ensure that they have the experience necessary to understand your needs, capacity to perform the services, and that the price is commensurate with the value your organization plans to receive.
Clearly Communicate and Contract Expectations
As you develop the contract, ensure that you articulate clearly what is needed, how communication and revisions to work will be handled, what constitutes failure to perform services, and methods to remedy disagreements that arise during the course of the contract engagement. Ensuring your needs are met in contract, not just in verbal communication, sets the stage for a fruitful relationship.
Create an Onboarding Process and Plan
A great vendor has an easy to follow onboarding plan that will allow them to execute the services contracted efficiently. A great customer reviews this onboarding plan and considers: What is different about my organization than the vendor’s typical consumer? What unique needs or programs might we have that the vendor will need to understand?
Outsourcing can sometimes sound like a magical proposition made by entrepreneurs with extravagant budgets. In truth, it is a common practice used by large and small nonprofits to ensure they can continue to focus on their mission. Before you know it, your nonprofit will be operating more efficiently and delivering value where it counts.
Executive Arm is a full-service management outsourcing firm for nonprofit organizations. Our mission is to help non-profit organizations achieve greater heights through internal capacity development, executive coaching, and strategic program design. Looking to level-up your nonprofit organization? Contact Executive Arm for a free consultation at https://www.executivearm.org/.
