nonprofits, charitable organizations, administrative employees, collaborative, membership, start-up costs, invisible costs, purchasing power

Today’s charitable organizations and nonprofit agencies are struggling with their own set of economic woes. They may face shrinking donations, lukewarm fundraising, and rising costs, as well as the familiar solutions to those headaches—budget cuts and employee layoffs. Many find they need a wider variety of talents and skills among their surviving administrative personnel than they can afford.  

Five nonprofits in the Twin Cities decided to do something about it—in 2007 they formed a collaborative, combined resources, moved all their staff into one office, and began sharing the entire pool of administrative workers. It didn’t happen overnight. Executives from the diverse social-service agencies met for nine months to lay fears on the table, reach consensus on a number of HR issues, and shape their new group destiny. They had to make decisions that were best for the collaboration but not best for individual members. And start-up wasn’t cheap—they spent about $600,000 to build a data center, create an information system, and relocate and train employees, plus another $200,000 for the “invisible costs” of untold staff hours.

As in all cooperatives, individuals had to drop long-held traditions, make compromises, and adapt. Employee responsibilities, work styles, office environments, and daily procedures were melded, reshaped, and standardized. Some groups had to relinquish sophisticated investments or expensive systems, some had to tone down their noisy bustle to allow others quiet and structure. All had to learn unfamiliar languages, rethink labels, redefine tasks, adapt reporting systems, and work under new job designs.   

The rewards have been significant. In its first year of operation, MACC CommonWealth saved the five original groups $200,000 and 30 percent in benefits expenditures. It has added five new members and is reviewing applications for more. Members have vastly increased their talent pool, built firm relationships, and given employees a rich collection of peers and responsibilities. They have avoided inadequate staffing and protected themselves against fraud that springs from a lone worker having too much responsibility. And they have found a novel way to combine expert skills, revamp job designs, and help employees develop new ways to serve their clients.

1. How do the human resource departments of social service agencies and charitable groups differ from those of businesses? What challenges do they share?       

2. What is a collaborative? What are its advantages and disadvantages?   

3. What is job design? What types are involved?            

Joining forces in the “back office,” Chronicle of Philanthropy, March 26, 2009 v21 i11 Pna    u8swe.