The driving force behind a nonprofit organization is its advocacy. Because nonprofits gear their resources toward the promotion of a cause, profit — as the sector name implies — is not within their purview of concerns.
Nonprofits mostly rely on donations for the organization’s maintenance and operations. As a consequence, nonprofits, being conscious of where their benefactors’ money goes, are likely to be hesitant about paying third parties or new members to handle important tasks and duties, according to a report, leading the nonprofit to learn the skill internally instead.
Another study notes that small nonprofit organizations have a tendency to rely on “board members and other volunteers” for functions that demand a level of skill in order to be done competently. This supposedly reduces overhead costs; however, small and medium nonprofit organizations “tend to spend 20–25% on overhead”, which could lead donors to question the small or medium nonprofit’s efficiency.
Critical Issues Nonprofits Encounter
Establishing and maintaining the upkeep of a nonprofit organization gets challenging with every demand that piles up. To increase the trust and confidence in donors, a nonprofit must prove that there is “progress toward achieving the organization’s mission”. This entails consistent record-keeping and an experienced team that will make the organization sustainable in the long run.
One report reveals that nonprofit organizations, especially the small or mid-sized ones, may find performing primary business functions difficult because of their lack in infrastructure and resources in the following areas:
- Bookkeeping and Financial Management
- Human Resources
- Information Technology
- Risk Management
However, these primary functions are so integral to an organization. Even though a nonprofit organization is struggling with the execution of these basic functions, what a nonprofit really needs is the collaboration of its in-house team and an experienced contractual group.
How Outsourcing Helps Nonprofit Organizations
There are a number of ways that outsourcing firms help nonprofit organizations.
As explained, the main thrust of a nonprofit organization is its advocacy. Because this type of organization is not geared toward profit generation, they have to rely on donations from and the goodwill of outsiders. A majority of these donations are, then, channeled to programs and initiatives that would further the organization’s cause.
A nonprofit organization must remain heavily focused on the principles upon which it is formed. But this could mean that the main infrastructure of the organization is compromised, especially if the nonprofit organization is small and new. What outsourcing an experienced firm does is alleviate the problems caused by the lack of experience.
It’s been shown that outsourcing firms help nonprofit organizations in the following ways, according to a study by Management Assistance Group:
- Lessen costs, including operations
- Gain access to technology, skills, and insights that are already available to the outsourcing firm
- Redirect main staff’s focus on core advocacy work
At NarraSoft, we help nonprofits increase the impact of their work by dealing with their back-office functions in collaboration with their team.
Our aim is to serve nonprofit organizations through efficient operations and advanced technology, guaranteeing their work and organization’s growth and longevity.