Many organizations struggle to secure enough funding to have the maximum impact on the goals aligned to their mission. In addition to seeking new funding to support your organization’s goals, you can examine your current expenses to find ways of reducing costs in order to put more money into programs that help accomplish your mission.
There is a national trend of small and medium-size organizations coming together to “share services,” specifically noncore business services. If your business or organization is small, you may not have the budget to enable you to hire specialists on your staff for all operations, such as payroll, human resources, marketing, and accounting. By participating in shared services, your organization might be increasing your funding by lowering your costs!
Is Using Shared Services Right For Your Organization?
- Shared services can take different forms, but typically a supporting organization has staff that handle operations for member organizations.
- Member organizations pay fees to receive shared services. These fees are often lower than the cost of employing in-house specialized staff or seeking these services independently.
- While guidelines can vary, in general, any organization or business—for-profit or nonprofit—can use shared services. Smaller organizations may reap more benefits, but larger entities are not prohibited from participating.
- Shared services require collaboration.
- Members must be willing to disclose their financial and business practices. This may feel uncomfortable for some. However, it allows members to get the full benefits of the shared knowledge and expertise of centralized staff.
- Individual organizations maintain autonomy over some decisions—such as personnel management. However, issues related to centralized services require collaboration.
What Do Shared Services Look Like In Action?
Transform Consulting Group actually uses shared services in our business model! Human Capital Concepts (HCC) provides us with human resources expertise, as well as payroll and benefits administration. HCC is a Professional Employer Organization (PEO), which means that our Transform staff members are co-employed by HCC along with their other clients. Therefore, we are part of a larger employee pool—allowing us to get the best rates for our health insurance and 401K plans. As a small business, we don’t have to worry about having a human resources director in order to maintain compliance with state and federal laws. Because of the services we receive from HCC, we can focus on projects that advance our mission!
Chambliss Center for Children in Chattanooga, TN is a nonprofit organization that operates an early childhood care and education program that serves over 300 children. In addition to operating their own site, they have management agreements with 5 other early childhood programs in the community. Administrative staff at Chambliss Center for Children manage the day-to-day operations of these 5 programs, but each of the programs has their own board of directors. Some of the services include payroll and benefits administration; insurance contract coordination; maintenance; and purchasing of food and supplies. The programs report that some of the positive impacts for them are the ability to increase teacher wages; decreased staff turnover; and improved program quality!
What Can You Do If You’re Interested?
Contact local and statewide partners to learn about shared services providers in your area.
- Your local United Way
- Your community foundation
- Local chapter of the Chamber of Commerce
- Area small business resource center
Transform Consulting Group provides an array of services related to fundraising strategies. Shared services may be a good fit for your organization as one piece of your overall fund development plan. For more information about increasing your impact while decreasing your costs, contact us for a free consultation!
