Easy Office Blog

Recently we have been having more and more conversations with franchised or affiliated nonprofits.  These are the groups that have a national brand, but have unique 501c3's serving local geographies.  Groups like the YMCA, Boy Scouts of America, Make*A*Wish, Special Olympics, and many many more have this model. (Sharon Oster, Yale School of Management Professor, has written some great articles on this topic.)

Many of these organizations were founded decades ago, or in the case of some, 100+ years ago.  At the time, decentralization was about the only way to operate a national model.  The airplane was just being invented when the Boy Scouts were founded and organized.  Now there are many great studies, like Professor Oster's, that outline the pros and cons of centralization.

One thing in research is pretty consistent, centralized shared services make sense for most organizations.  The program impact and cultural impact is often minimal and the financial savings are significant.  That is money that can be saved and diverted into programs and mission critical activities.  Shared services, or outsourcing as a group to a vendor, is a quick way to achieve financial savings across an affiliated network (without all of the pain and emotion involved in mergers or other cost saving activities.) 

There are great consultants out there who exist to help people think through these issues.  There is no single silver bullet answer.  But the time has come for affiliated nonprofits to investigate this as a solution.

Paul Light's 5-page article on the Four Futures facing the non-profit sector is worth a read.  http://tiny.cc/d06xa  On the heels of my post about "Small is Beautiful" this article highlights the challenges small organizations face.  He talks about all the buzzwords of collaboration, efficiency, and scale.  Whether you agree with his assessment or not of the potential four futures for the sector, his article is one more piece of evidence that the need for flexibility and unique collaborative business models - like ours - are continuing to gain traction.

We are seeing mergers among our client base and a continued push to find efficiencies in the face of funding cuts.  I believe this is making the sector stronger and much more focused.

American's tend to be optimists and I'm excited to see how our sector steps up and responds collectively to the challenges all around.  We have a great future ahead of us.

Of the 1.1 million non-profits in the US, 90+% have an annual budget of under $1M.  A very high percentage of those have an annual budget of under $100,000.  There is frequent talk of the need for non-profits to merge.  The conventional wisdom goes that there are too many small non-profits, performing uncoordinated redundant tasks.  Conventional wisdom also states that because they are small, they can never attain the scale to run efficiently, i.e. the small folks spend too much on administrative costs.

While much of this is true, I have a different philosophy.  I feel that one of the key roles that non-profits play in society is as niche-fillers.  Societies major institutions are governments, educational institutions, corporations, and religious institutions.  I believe that non-profits, in part, exist to fill the cracks between these major building blocks.  In essence, non-profits pick up where others fail.  If you agree that this is a primary role of non-profits, then small is beautiful.  A smaller, more nimble, organization can more readily fill those cracks in society.

As to mergers or shared cooperatives, the primary issue tends to be around people.  Who is going to lead the merger?  What is the new name going to be?  Who will be the Executive Director and who will be the Assistant?  As to cooperatives, like the hen baking bread, everyone wants the benefits but no one wants to organize them.  This is part of the reason why we created Easy Office.  We can deliver the scale, access to technology, and expertise that no single organization can reasonably afford on their own.  We enable the non-profit sector to stay relatively small and nimble.  And our shared service approach allows the service to be affordable and accessible for even the smallest of non-profits.