Nonprofit What If: Back Office Consolidation

Last spring, the Lodestar Foundation announced the semi-finalist for the Collaboration Prize. This new award is designed to inspire cooperation among nonprofits. From over 600 nominations, the semi-finalist included the Chattanooga Museums Collaboration. The Collaboration formed as a result of three Chattanooga museums successfully consolidating their human resources, technology, finance, marketing and retail operations to function more effectively and efficiently. Prior to the consolidation, two of the partners, the Creative Discovery Museum and the Hunter Museum of American Art lacked the capacity to fund their own administration. On the other hand, the Tennessee Aquarium possessed excess capacity. In the collaboration, the Aquarium provides a fee-based services to the two other museums, saving the Creative Discovery Museum and the Hunter Museum over $1.5 million each annually, plus creating a yearly $1.1 million revenue stream for the Aquarium.

This example provides us another opportunity to play another round of Nonprofit What If. Remember the rules of >Nonprofit What If? Take a successful concept used elsewhere and consider how you can apply it at your nonprofit for fun, profit and mission enhancement. Consider the benefits. If you are inspired, find others using the model to learn more.

Round #3: What if you worked with one or two other nonprofits to consolidate your back office procedures?

Benefits:

• You will do more with less resources
• Collectively, you can hire one expert to staff each function and less expensive personnel to support them (instead of each organization hiring a semi-expert)
• Economies of scale provide additional cost savings
• Staff members focus on what they do best, instead of performing scattered tasks in cross-functional areas
• Donors love collaboration
• Opportunity for positive media exposure
• Once you work together, new program collaborative opportunities will become visible

Intrigued? Want to explore the concept further? Google these Chattanooga organizations to check out their “back office consolidation models.” And check out articles on our website www.kedconsult.com about developing partnerships under Articles and Resources and then Team Building.