Should Non Profits and Associations Outsource Fulfillment and Processing?

Posted by Katie Rogers on Mon, Oct 31, 2011 @ 01:16 PM

5 Quick Reasons why Outsourcing some of your Core Processing functions can not only save you revenue, but catapult your organization to a Higher Level.

At the center of every organization, there exists a few core processes. Whatever you do to describe the imageactually create the revenue is usually a part of this. For a magazine, it could be researching, writing, and editing the stories. For Non Profit Fundraisers it’s raising the funds to further your mission and Associations it’s providing a level of service and benefits to your Member Community. It is these activities that generate 70% or more of revenue for your organization. So for the remaining 30% that don’t generate revenue (and that someone else could do maybe even more efficiently and effectively) the question becomes:

Why are you still doing them?

A recent study looking at the outsourcing practices of the Association and Non Profit Community indicated that key personnel spend 70% of their time on activities that only generate 30% of their revenue; most of which can either be outsourced or cut all together.  

What types of activities are we talking about? Well, for the Association and Non Profit, it could be Revenue Processing, Donor and Member Stewardship, Data Entry, Acknowledgements. For the magazine publisher, the actual printing of the issue, the mailing process and the subscription management areas could fall under this category.  

Partnering with a reputable Fulfillment and Stewardship Firm to handle these tasks can not only offload some of the “heavy lifting” but more importantly provide your organization a competitive advantage in what is now becoming a very competitive Association and Fundraising Industry.

While there are many benefits to outsourcing your fulfillment and other processing functions to a reputable third party fulfillment and stewardship firm, there are really five important reasons that every organization should consider:

1.      The ability to concentrate on your core business and mission. Not being involved in the day-to-day process of fulfilling orders or entering gifts, enables your organization to focus on higher level strategic planning and increasing revenue. We all know there are only twenty four hours in a day. We need to maximize every minute we have. Stuffing envelopes or answering standard phone calls from donors or members are usually huge time killers. And profit killers too.

2.      How about human resource considerations? People are expensive, right? When you outsource some of the labor intensive tasks, staffing concerns are shifted from your organization and placed on your outsourced firm. During peak seasons, rather than spending large amounts of time hiring new employees or utilizing temporary personnel, your new partner will manage all of these concerns for you. A reputable Fulfillment Firm is equipped to handle peak seasons well in advance. And remember when doing your cost analysis—unless you are hiring robots, these people need managing too—how much is your time worth? And if they are sick? Who is filling in? Are you able to still meet your goals? Are you adhering to regulatory requirements? Do you know what they are?

3.      Controlling your costs. We all know that cash is king and how you manage your budget and revenue flows can mean the difference between staying in business and closing your doors. Since your organization will only be paying the Fulfillment Firm for the work they actually perform, you are able to better manage fixed and variable costs and stick to budget.

4.      Technological Advances. When you outsource, you become part of a larger partnership with a firm that is working directly to keep your organization competitive. Providing you, and therefore your customers or members, the most up to date technology, resources and best practice recommendations to catapult your organization to the next level. In today’s competitive Association and Not for Profit marketplace, you need to think and act like a For Profit Business. Many times your member or customers dollar may be spent with a competing organization or just not at all if you don’t keep your organization on the cutting edge.

5.      The concept of real estate comes into play. Again, one of the big expenses of operating an organization is rent or lease expense. With outsourcing your core processing functions and/or fulfillment, costly warehouse space or expanding office space is no longer a concern. Many organizations that outsource their fulfillment services to a third party firm decided to do so in order to reduce the rent on very large facilities or expensive shipping equipment.  What is the value of that mailing and folding machine, extra storage space and racking you could potentially get rid of?

My mother always asked me, “What is your time worth? Always do what only you can do.” {Ah the consummate entrepreneur} But what she was saying truly relates—especially if you’re struggling with the core processing functions of your organization. Finding a reputable Firm that can manage to these processes for you is key (just like hiring the right employee) but the good ones will not only complete these processes for you, but become an invaluable resource for moving your Organization beyond its wildest dreams.

 Click me

Topics: Improving Member Relationships, Improving Donor Stewardship, Outsource Fulfillment, Improving Customer Relationships, Improving Revenue, Outsources Member Processing, Outsource Donation Processing