How Can A Non-Profit Have Experts Without Breaking Their Bank?

Insourcing is an appropriate option for non-profit organizations of all shapes and sizes, where the desired result is one or more of the following:

  1. Improved operational efficiency and quality
  2. Increased net revenue (in the form of cost savings or increased revenue)
  3. Improved organizational and/or mission performance

The Role of Insourcing Professionals

The role of insourcing professionals varies based on the size and scope of each individual engagement. A vendor is frequently used as an implementer and is subsequently responsible for managing daily/weekly tasks related to a specific functional area. A vendor may also be utilized as a teacher in an effort to educate the nonprofit and subsequently help them develop an additional level of expertise in-house. Additionally, a service provider may be used as a strategic partner to help the nonprofit make wise and educated decisions. All vendor contracts should explicitly state the role of the insourced service provider as well as the specific deliverables to be managed by both parties.

In the nonprofit community, insourcing refers to the delegation of key management areas, especially “back office” services, to outside contractors or vendors, usually on a relatively long‐term basis, with the expectation of making the quality better, strengthening management effectiveness, and perhaps lowering costs. Nonprofit insourcing is different from the common understanding of insourcing in the business sector in that the key objective or “bottom line” is to become a more effective organization, not only to save money or increase profits.

Insourcing of basic business functions is particularly relevant for smaller, mid‐sized, and/or younger non-profit organizations. For instance, organizations often lack the infrastructure and resources to fully develop effective business operations in the wide range of essential areas that require state of the art technical expertise. Such key areas today include Information Technology (IT); Bookkeeping and Financial Management; Marketing and Communications; Fundraising; Purchasing; Risk Management; Legal Services; and Employment and Human Resources.

 Insourcing can be a logical answer to the challenge facing thousands of today’s nonprofit managers: How do we become expert, well‐staffed and efficient in key business operations, despite the reality that we and our organizations frequently lack the experience, in‐house resources and/or wherewithal to fully develop and effectively manage key business operations? Insourcing one or more such key functions offers opportunities for today’s nonprofit managers to tap the expertise, experience, and economies of scale of specialized providers of these services. Insourcing also offers the potential advantage of reducing (although never entirely eliminating) the scarce time, financial resources, and management attention devoted to these areas, allowing more management attention to mission‐related activities and results. Rather than each nonprofit entity and its manager having to become highly expert at mastering and performing these disparate functions, some or even all can be contracted out and monitored with less overall administrative time and effort.

Benefits of Insourcing

  1. Reduce long‐term operating and capital costs
  2. Increase revenues
  3. Enhance organizational impact
  4. Improve management effectiveness and flexibility
  5. Increase access to technology, skills, and insights not otherwise available or affordable
  6. Improve the ability to focus on organizational mission
  7. Shift liability (e.g. Payroll)

A nonprofit organization may choose to insource all or pieces of an entire function. For example, it is not necessary to insource the entire fundraising function to a third party. Many organizations simply wish to insource prospect research or grant writing, while retaining all other fundraising‐related responsibilities in‐house. Service providers are typically very flexible and willing to work with clients around which areas remain in‐house and those that are insourced to a third party.

It is helpful to have a general idea of which services your organization wishes to insource prior to contacting a vendor. A comprehensive listing of services provided by different insourcing providers, by functional areas, can be found below.

Information Technology

  1. Strategic technology planning
  2. IT audit management
  3. Procurement
  4. Server installation and management
  5. Network installation and management
  6. Desktop/laptop installation and management
  7. Mobile device support
  8. Cloud services
  9. Server back‐up and maintenance
  10. Systems monitoring
  11. Network system upgrades
  12. Networking across multiple sites (WAN)
  13. Virtual Private Networking (VPN)
  14. Network security
  15. Software updates
  16. Website creation
  17. Website maintenance and uploads
  18. Development and maintenance of intranet
  19. Development and maintenance of extranet

 Bookkeeping & Financial Management

  1. Strategic financial planning
  2. General bookkeeping (including A/R processing, A/P processing and bank reconciliations)
  3. Management of relationship with payroll processing firm
  4. Preparation of donation receipts and thank you letters
  5. Audit preparation
  6. Assistance with budget preparation
  7. Chart of Accounts preparation and/or updates
  8. Creation of financial reports
  9. Board reporting
  10. Funder reporting
  11. Forecasting

Fundraising

  1. Strategic fundraising planning and execution
  2. Grant writing
  3. Grant management
  4. Prospect research
  5. Individual
  6. Foundation
  7. Corporate
  8. Government
  9. Event management
  10. Major gift campaigns
  11. Capital campaigns
  12. Planned giving
  13. Government contracts
  14. Direct mail and e‐solicitations
  15. Database management
  16. Board and staff development

Marketing & Communications

  1. Strategic communications planning and execution
  2. Media relations and management (including press releases, research and media placements)
  3. Crisis communication
  4. Branding
  5. Creation of donor communication and solicitation materials
  6. Creation of social marketing/program materials
  7. Staff training for media interviews and public speaking
  8. Social network capacity building
  9. Website development and design
  10. General advertising and marketing
  11. Special event promotion

Risk Management

  1. Strategic risk management assessments and periodic risk reviews
  2. Property and casualty products and services
  3. Employee benefits and retirement products and services
  4. Health insurance products and services
  5. Staff training
  6. Training, procedures and policy manuals

Human Resources

  1. Strategic human resources planning and execution
  2. Recruitment and staffing (permanent and temp)
  3. Benefits administration and consultation
  4. Training and development
  5. Performance management
  6. Employee/labor relations services
  7. Compensation analyses/salary surveys
  8. Creation of employee manuals/policies
  9. HR compliance, audit and assessment
  10. HR help desk

WeSupportMinistries helps you grow your reach and scale by finding your teams that draw in on the important elements of your non-profit.

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