Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

July 21, 2008

Nonprofits can partner on back-office tasks

Creating innovative strategies for social change is the focus of much of the widespread lip-service nonprofits and foundations give to the need for collaboration in the charitable marketplace.

But equally critical is the need for nonprofits to find ways to combine and share the cost of operating their back-office systems.

With the economy sinking and the cost of doing business rising, nonprofits face big challenges in running their shops efficiently and effectively.

Back-office collaboration among nonprofits could yield savings and efficiencies in securing and handling common business needs like paying rent and utility costs, providing employee benefits, operating software systems and databases, and working with consultants.

While far too few foundations will make grants to help nonprofits cover their operating costs, some foundations have been willing to invest in helping groups of nonprofits pay for products and services they can share.

Several years ago, for example, the Z. Smith Reynolds Foundation in Winston-Salem, N.C., paid for a handful of consultants to provide fundraising advice to groups that fight domestic-violence.

More recently, the foundation made a grant to help six water-conservation groups hire fundraising fellows for three years, provide them with training, and help pay for support services such as donor-database software they might share.

To help equip them to do a better job fixing the urgent problems our communities face, funders can make investments that spur groups of nonprofits to partner on back-office operations.

Through collaborations that help them reduce costs and operate more efficiently, nonprofits apply more of their time and resources to the larger job of making our communities better places to live and work.

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