Estimated reading time: 2 minutes, 31 seconds

With the ongoing need for nonprofit organizations to scrimp and save, new methods to do just that are constantly in demand. While the term outsourcing has both positive and negative connotations, it is something that many nonprofits might want to consider when it comes to protecting the bottom line.

On the one hand, the term can bring to mind call centers in foreign countries where operators with thick accents and names like Mike and Mary are waiting to offer assistance with your PC., your bank account, or your auto insurance. The situation can be frustrating for several reasons. Sometimes it is hard to get the information you want. Sometimes it is difficult to communicate with the operator. Often, simply knowing the job has been outsourced to another country can cause resentment.

But, outsourcing isn't without its merits. If it didn't save a lot of money, big companies certainly wouldn't be doing it. It is possible for nonprofit organizations to take advantage of some of the benefits, too.

Not all outsourcing is about call centers in India. In fact, there are many businesses and even individuals that offer outsourcing services in your own country. Whether or not these services are the right choice for your organization relies on a couple of factors.

The Monetary Cost of Outsourcing

It is not always feasible for a nonprofit organization to have its own human resources department, its own accounting department, and its own IT department. We all know that in many small organizations, one person might end up providing all of these services. In fact, doing so often keeps them from the actual job they were hired to do.

Hiring an outsourced human resource company is almost certainly going to save you money in comparison to hiring your own HR personnel. In the long run, it might even cost you less than having your Program Director taking several days a month from his or her real job to schedule employees or cut paychecks.

The Social Cost of Outsourcing

It is also important to make sure that outsourcing is in line with your organization's mission. For example, a nonprofit focused on helping single mothers find work in their city might find it inappropriate to outsource work to a firm in another state. Likewise, an organization supporting the rights of immigrants might be better served not to outsource jobs overseas.

One of the best arguments for outsourcing, however, is that it can be the fiscally responsible choice. Funders are certainly happy to see when a nonprofit is actively finding ways to stretch its dollars.

The Bottom Line

As with so many other aspects of running a nonprofit organization, the final decision often boils down to the bottom line. If your nonprofit can save a significant amount of money by outsourcing its billing, for example, that will free up more money to devote to making the big changes that so many of us have set out to create in the world.

In the case of nonprofit organizations, the bottom line isn't just about dollars and cents.

Last modified on Sunday, 19 May 2013
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