Leadership Published Date, 2022

Outsourcing Was Always An Option For Nonprofits. During The Pandemic More Are Catching On.

Created By: Steve Orr
April 15, 2021

Nonprofit executives face incredible demands on their time and attention. They need program expertise as well as a sophisticated understanding of policies that affect their work. They need to be practical with some issues, visionary with others, keeping the donations and grants rolling in all the while.

For a long time, consultants and outsourcing were the domain of business, while nonprofit organizations had to rely exclusively on their staffs for every challenge that came their way. This expectation started changing in the 1990s, and over time nonprofits have become more sophisticated at figuring out when they should address a need in-house and when they should tap into other resources. Board members often help navigate these waters; pushing nonprofits to attain more ambitious metrics, they bring up the same solutions that work for their businesses.

OUTSOURCING FOR NONPROFITS: INTERVIEW WITH THE OBAMA FOUNDATION

I recently had a virtual sit-down with David Simas, CEO of the Obama Foundation, and outsourcing was among the topics we covered. He explained how he thinks about this strategy, which many nonprofits still regard as anathema.

“We are very rigorous on the front end, with an assessment,” Simas told me. “Is this something we can do in-house? If yes, what are the tradeoffs? In the event that the thing we want done can’t be done by the person in-house, then we have to go out.”

For Simas, culture is the crux of an outsourcing decision: “Every organization has a reputation and a brand. You need to ensure that that is completely aligned.”

IS OUTSOURCING RIGHT FOR YOUR NONPROFIT ORGANIZATION?

Nonprofit executives have just as much, if not more, responsibility as business executives. While businesses can point to profit as the definitive performance metric, nonprofits are judged on a range of factors, most of which are hard to measure. They have to constantly justify their existence. At a time when 30% of fundraisers report recently having left or plans to leave the development field altogether in the next two years and when development director vacancies last an average of six months (and when delays cost money), nonprofit leaders who have long resisted outsourcing might find themselves reconsidering.

COVID-19 has added a whole other layer of stress. The global pandemic, which has taken so many lives and altered so many facets of our lives, has also placed new and unprecedented burdens on the nonprofit sector. This has proven to be a moment when executive directors have admitted that they need outside help—strategic, tactical, or both. The value of an outside voice of experience has become increasingly clear.

However, consultants aren’t necessarily the answer to every problem a nonprofit faces. Sometimes, as Simas notes, in-house resources can be re-allocated to meet a challenge, and not every consultant makes sense in every situation. (A branding refresh might not be the right choice for an organization with dwindling board support; if the executive director just announced her retirement, maybe that capital campaign can wait.) Whether it’s an interim project or an extended engagement, client and consultant both need to maintain realistic expectations about the outcome.

Nonprofits considering an outsourcing solution need to do the math to determine if it’s appropriate for them. I’ll be the first to admit that such partnerships aren’t inexpensive, but usually, when you tally up not just salary and benefits but the various costs associated with recruiting, hiring, and accountability, outsourcing might be a smarter choice.

THE “EMBEDDED” MODEL OF OUTSOURCING

The “embedded” team model of outsourcing—the type of partnership that Orr Group maintains with dozens of nonprofits—ensures that consultants get to know a client from the inside out. They share its mission. They share its risk. They work alongside the in-house staff, becoming so much a part of the team that donors and program officers might not know they are consultants.

In the embedded team model, consultants absorb what Simas calls “the story and ethos of the organization.” Trusting relationships—the cornerstone of fundraising—flow from that shared ethos. Frankly, it doesn’t work if leaders can’t commit to onboarding temporary staff as thoroughly as a permanent team member; being transparent about finances and everything else that affects the organization’s ability to fulfill its mission; and hearing candid, out-of-the-box advice.

Nonprofit executive leaders and business CEOs have a lot in common, but by and large, the people who lead nonprofits are motivated by passion, not power. They also usually approach situations with a good deal more humility. They know their strengths, and they recognize where they could use counsel and assistance. That’s where outsourcing comes in — it’s a way to fulfill the mission without pretending you have all the answers.

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