Nonprofit organizations have become instrumental in providing social services for various people worldwide. Over 10 million organizations respond to the needs of multiple sectors, ranging from large international groups to small local ones.
However, running such organizations takes a lot of effort. Administrators often need help ensuring their services reach those they intend to help.
Outsourcing offers an effective solution that can help in their mission. But how can these organizations effectively harness the benefits of outsourcing?
What Stops Nonprofit Organizations from Outsourcing
While outsourcing is a great strategic option for nonprofits needing additional help, several challenges can prevent them from fully tapping it. Here are the biggest ones they encounter.
Budget Constraints
Budget is arguably the biggest challenge for many nonprofit organizations. Unlike companies with a relatively steady cash flow, nonprofits often depend solely on the funding provided by donors. This impacts various aspects of their operations.
According to the latest data, as much as 90% of the budget these organizations have goes to the programs they are operating. This leaves the organizations with small budgets for other operational expenses.
The budget allocations for major nonprofits. Image from Syracuse University.
In the case of outsourcing, the budget can limit how much of their operations they can hand over to an outsourcing provider. These outsourced aspects might not always be enough to meet the organization’s needs.
As such, nonprofit organizations need to look for more cost-effective outsourcing means. For instance, they might lessen the size of outsourced teams and relegate the work to volunteers. While these approaches could work, they can limit the organization’s growth.
Operational Control
Another challenge nonprofits face when outsourcing is retaining operational control. This control is crucial, as organizations want to ensure everything aligns with their goals. Losing it can compromise the overall quality of service their team can provide to beneficiaries.
Maintaining control can be especially challenging when outsourcing. Since the outsourced team would be working from a different location, it can be hard to coordinate with them and oversee their work. Outsourced teams also require a certain degree of autonomy to perform their work.
Nonprofit organizations need to balance maintaining control while providing outsourcing partners autonomy. This will require a lot of planning, which also includes risk management.
Ensuring Compliance For Nonprofit Organizations
As they are dealing with social work, nonprofit organizations also need to maintain legal compliance.
This extends to their outsourcing efforts.
Not meeting these legal requirements can impact the outsourcing effort’s effectiveness.
The main compliance challenge is that there can be a lot to go through. Nonprofits need to be familiar with all the laws relevant to outsourcing. These laws can be different in each region.
One particular compliance issue nonprofits need to deal with when outsourcing is data security. Governing bodies will often have stringent regulations on how organizations should handle beneficiary data. There will also be specific regulations on sharing these data with third parties, such as outsourcing providers.
Nonprofits will often need to find a more efficient way of ensuring compliance within their means. This can be hard for smaller organizations that have a limited number of volunteers.
The Benefits Outsourcing Offers For Nonprofit Organizations
Despite the challenges, outsourcing is still a popular option for nonprofits. This is because it offers various great benefits for these organizations. These benefits help nonprofits to lend their hands to the communities they serve.
Better Cost-Effectiveness
Owing to the limited funding that nonprofits have, they have to ensure that every aspect of their work is within budget. This lets them reach out to as many beneficiaries as possible.
Outsourcing various aspects of their work can help these organizations improve the efficiency of their effort. For instance:
The approach will also help organizations better manage their limited budget because outsourcing costs less than hiring a dedicated staff to handle these tasks. The organization can also better control the services they get to increase efficiency.
Access To Technology And Expertise
Limited funding can also hinder a nonprofit organization’s access to vital talent and technology. Outsourcing can bring both within reach. Many outsourcing firms invest heavily in new technology and relevant talent.
They make this technology and talent readily accessible to nonprofit organizations. Nonprofits can take advantage of this to enhance their capabilities without having to go through a lengthy process of tech onboarding.
This also goes for attracting expert talent to the organization. Outsourcing providers can tap large talent pools to find the specific hire the organization needs. They will be handling recruitment and onboarding as well.
More Efficient Scalability
Scaling a nonprofit organization’s operations is quite different from a for-profit business. With the expansion, companies can count on the increased income to support the costs. Nonprofits have limited fallback and need to deal with the increased cost in some other way.
This is where outsourcing comes into play.
It offers a more cost-effective approach to that expansion. It can help nonprofits expand their teams without driving the costs too high. Additionally, it allows for faster deployment of these personnel to assist in operations.
Lessening Risks
Nonprofits are already aware of the risks the moment they undertake their mission. However, they still need a way to lessen these to ensure efficient operations. Outsourcing provides a cushion that will protect these organizations.
Outsourcing will be useful for effective risk management. Because the outsourcing provider is located in a different geographical area, operations are immune to both man-made and natural crises. This ensures continuity and seamless work.
Other ways outsourcing helps with risk management is by lowering costs and by enabling nonprofits to tap into a wider pool of talent that would otherwise be limited in their headquarters.
Virtua: Delivering A Comprehensive Outsourcing Solution For Nonprofit Organizations
Virtua Solutions have always dedicated itself to providing extensive outsourcing services to organizations – even to nonprofit ones. Our team has worked with several nonprofits, helping them fulfill their mission.
Providing Custom Solutions
During our partnerships with such organizations, we have seen the need for outsourcing solutions that are specifically geared toward them.
Our outsourcing solutions come in a fully customizable package. Client organizations can readily expand the teams we provide depending on the need. We also help them find and hire talent as needed.
Bring Your Noble Cause To More People With Virtua’s Help
The work of nonprofit organizations is something worth celebrating and supporting. Even with the small crew they have, these organizations go above and beyond their ways to fulfill their mission.
Virtua is here to help them in that mission.
We are ready to provide nonprofits with a comprehensive outsourcing service that meets their needs. We will give them access to top Filipino talents who will help them succeed in their mission to make the world a better place.
Contact us and get the best outsourced help as you pursue a noble cause.