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Wearing Lots of Hats? Maybe It’s Time to Outsource

Nonprofit employees tend to wear many hats, covering a range of administrative tasks to preserve precious budget dollars for mission and program work. When the hats fit, it can work out very well for everyone. When they don’t, it can demoralize staff and reduce your organization’s effectiveness. Joe Geiger, President and CEO of First Nonprofit Foundation, discusses some common errors nonprofits make when staffing for administrative duties, and when it makes sense to outsource instead.

Hiring full-time administrative staff for part-time work.

The most common staffing error nonprofits make is hiring a full-time administrator for part-time work and then filling their schedules with other administrative tasks. “Bookkeeping is an area where this happens a lot,” Joe says. “Sometimes in a small to mid-sized nonprofit there isn’t enough work to keep a bookkeeper busy full-time, so they’ll have that person do other tasks the person doesn’t really enjoy doing.” The result can be counterproductive.

“I worked in a nonprofit once where we shared space and equipment among five nonprofits,” Joe says. “One of the nonprofits had a bookkeeper who worked about half a day each week on their bookkeeping. The rest of the time she was working on their newsletter and conference preparation. But that wasn’t what she was hired to do, and she hated it.” The organizations worked out an arrangement to have her handle bookkeeping for all five nonprofits instead. “She was very happy because she was doing what she liked,” Joe says. “Sharing staff isn’t always a viable option, but it illustrates the value of hiring people to do the work they’re trained to do.”

Assuming that employees cost less than vendors.

“Sometimes smaller organizations will get sticker shock when they talk to a contractor,” Joe says. “But when you factor in compensation, benefits, taxes and other expenses of full-time staff, it is often a better deal to outsource. When you hire an outside firm, you can get a high-level expert for a fraction of the cost of hiring a staff person with that talent.”

Having a program person or executive do the work.

In smaller nonprofits, sometimes core staff end up doing a little bit of everything, which can prove costly in unexpected ways. “Say I’m an executive director doing bookkeeping,” Joe says. “I have to pay so much attention to getting the bookkeeping right that I don’t have time to focus on the strategic aspects of the finances. Many accounting firms are happy to do the work, however, and they’ll do it properly.”

Another benefit of hiring an outside firm is insulation from some of the hassles of employment. “When you contract with an outside firm, if the person handling your account moves on to another job it’s up to the firm to hire a new person,” Joe says. “With something like bookkeeping, where you need uninterrupted service, having a firm that provides continuous service can be a lifesaver.”

Assuming that a full-time staffer will do a better job.

While full-time staff know your organization best, outside experts can bring much-needed objectivity to your organization. Vendors can also keep your organization safe because they are responsible for their work, which limits your exposure to certain risks.

Hiring a board member to pitch in on tasks.

“Often an organization will recruit lawyers for their boards of directors expecting free legal advice,” Joe says. “But an attorney can’t sit at the table as a board member and be objective as an attorney. That opens up a can of worms legally, and it can create stress and conflict for someone recruited to do that. If you need legal help, it’s better to hire legal help.”

That doesn’t mean your board members should hesitate to help out. “Lawyers talk in legal language that the executive director or staff might not understand, so it’s nice to have someone on the board who can interpret,” Joe says. “Sometimes board members are happy to do further work, but it shouldn’t be expected of your board. It should be negotiated case by case.”

Handing over the keys.

Another error many nonprofits make is relying on an internal staffer to handle tasks such as IT and website development without any formal oversight. It all works just fine—until the person leaves. “Most people at nonprofit organizations don’t understand how to produce a website,” Joe says. “If someone internally handles it, they keep adding back rooms until it becomes a maze. Then when they leave, nobody knows how to backtrack through all those doors. No one knows how to operate the system.”

Projecting an unprofessional image.

Communications is another area where organizations can benefit from some outside help. “A lot of nonprofits don’t tell their stories very well because it’s not what they do,” Joe says. “They’re focused on doing the work, not on talking about it. But it’s extremely important for nonprofits to communicate what they do, not only to promote fundraising and programming, but to build an educated community.”

Joe points to First Nonprofit Foundation’s recent grant recipient Memory Matters as an example. “They’re building an aware community, not just a program,” he says. “It’s critical for nonprofits to be able to tell their stories. Yet I often find during our own discovery process for giving grants that I have to do a lot of digging just to figure out what they do.”

While every organization needs a core staff of dedicated employees (even if it is a tiny staff), using vendors to provide expert help as needed can be a highly effective way to get exactly the amount of help you need from expert providers. Outsourcing is especially valuable for short-term or cyclical projects. “When done smartly, outsourcing is very valuable commodity for the nonprofit organization that may not be large enough to keep a person busy full-time in various jobs,” Joe says.

The following areas are often good candidates for outsourcing.

  • Bookkeeping
  • Marketing
  • Communications & PR
  • Legal
  • Conferences/meeting planning
  • IT and website management

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