Using Shared Services to Maximize Your Nonprofit Budget

Elaine Ng and Jackie Cefola at the MNN Conference
Anyone who has worked in the nonprofit field has been asked, “How can we do more with less?” It’s a frustrating question with an impossible answer. Wouldn’t the better question be, “How can we do more with what we already have?” This was the focus of the 2019 Massachusetts Nonprofit Network Conference’s workshop “Do More With Your Budget: How Alternative Structures Can Break the Nonprofit Starvation Cycle,” led by Jackie Cefola, director of consulting and shared services at The Nonprofit Centers Network and Elaine Ng, chief operating officer of TSNE MissionWorks.

Anyone who has worked in the nonprofit field has been asked, “How can we do more with less?” It’s a frustrating question with an impossible answer. Wouldn’t the better question be, “How can we do more with what we already have?”

This was the focus of the 2019 Massachusetts Nonprofit Network Conference’s workshop “Do More With Your Budget: How Alternative Structures Can Break the Nonprofit Starvation Cycle,” led by Jackie Cefola, director of consulting and shared services at The Nonprofit Centers Network and Elaine Ng, chief operating officer of TSNE MissionWorks.

Jackie and Elaine discussed two models for change that allow nonprofit organizations to maximize economies of scale by adopting alternate structures focused on partnership. With these models, nonprofits can save money, increase collaboration, and build their capacity to focus on their mission-based work.

NONPROFIT CENTERS

Nonprofit centers are physical spaces — a building or campus — where two or more mission-driven organizations come together to co-locate for mutual benefit. These benefits can range from savings in rent, to shared programming and back-office services. Nearly 95% of nonprofit centers have successfully managed to offer below-market rental rates that save individual organizations 7% on average according to a 2015 survey by The Nonprofit Centers Network

Nonprofit centers usually fall within four categories: Multi-sector spaces that house nonprofits of any type, mission or field; themed centers that house organizations in a specific field such as arts and culture or environmental advocacy; one-stop hubs that house nonprofits serving several needs within a community, for example resources for children and families; and co-working spaces that provide shared space for start-up or incubating nonprofits.

TSNE MissionWorks is the owner/operator of the NonProfit Center in downtown Boston, a multi-sector center that provides below-market rental rates to nonprofits of all different missions and sizes. TSNE also manages The Link, a themed center in Kendall Square, Cambridge that provides office space for workforce development nonprofits. To find out more about these locations, click here.

SHARED SERVICES

Shared services are developed by two or more nonprofit organizations that collaborate to jointly access the time and expertise of contractors and/or employees focused on core back-office operations such as human resources, financial and grants management and legal services. By developing solid collaborative practices around shared services, nonprofits can focus on the real work of their mission and delivering direct services to their constituencies.

Shared service opportunities include:

  • Fiscal Sponsorship — Organizations come together under one 501c3 umbrella that provides capacity building and joint back-office services. TSNE MissionWorks is a fiscal sponsor.
  • Management Service Organizations — Nonprofit or for-profit organizations that provide back-office services, while allowing nonprofits to retain their own 501c3 status
  • Joint Contracting — Partnering nonprofits create a for-profit LLC under which they hire, pay, and manage employees who do the shared services work for those organizations.
  • Connective Mechanisms — Nonprofit organizations come together to form groups, networks or collectives to share knowledge and expertise around back-office services.

Although the idea of moving to a shared services model may seem daunting at first, it’s important to remember that nonprofits exist to provide needed services. Ideally, executive directors and nonprofit staff (particularly in smaller, budget conscious organizations) should be spending their valuable time focused on increasing community impact, not negotiating rental agreements, managing health insurance options, or seeking pro bono legal counsel. By maximizing economies of scale through shared workspaces like nonprofit centers and shared services, nonprofit organizations have the opportunity to save money, build capacity, and focus on delivering their mission.

For more information on shared space, check out the newly published book Shared Space and the New Nonprofit Workplace.

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