Nonprofits: Outsourcing Can Help Solve Understaffing Problems

What should you do if your not-for-profit organization is short on staff and you don’t have the funds or confidence in the future to hire employees — or even to retain all the ones you have?

Skip Steps One and Two

Make the Most of Your Volunteer Workforce

There’s nothing wrong with asking volunteers to step up to the plate when your staff’s overworked. But if you want to maximize — and hold onto — this unpaid workforce, you need to manage it strategically.

Develop a volunteer management infrastructure helmed by a paid or unpaid coordinator. Depending on the roles you’ve asked volunteers to assume, you may want to set up a training program, ask individuals to set goals and regularly evaluate their job performance. These measures are particularly effective if you’ve enlisted professionals, such as retired business executives, to assume high-level responsibilities.

Be sure to assess your volunteers’ experience so you can put them where they’ll have the biggest impact. A retired homebuilder, for example, would probably serve your organization more effectively by making or overseeing facility repairs than by answering phones. And a charity auction vet should be asked to solicit donations from local businesses. That said, volunteers may have their own ideas about how they want to help. Listen and try to accommodate their needs, or you may lose them to another charity.

Most not-for-profits initially respond to a staff shortage in one of two ways:

1. Pile extra work on the desks of remaining staff or

2. Ask volunteers to pick up the slack.

Although these may work as temporary solutions, eventually both paid and unpaid workers will get burned out and leave.

Also, if you’ve been forced to lay off employees with specialized skills, those who remain may not be capable of assuming their duties. It’s probably fine, for example, to replace paid exhibit guards with trained volunteers, as a couple of art museums did recently. But don’t assume a marketing staff member can manage your website after you lose the person who designed it. More likely, the site won’t get updated and you’ll miss opportunities to reach potential supporters.

Look Outside

If your not-for-profit is likely to remain short staffed for a while, consider outsourcing. For-profit companies have outsourced for years to reduce benefit costs and balance-sheet burdens associated with keeping full-time employees. But not-for-profit organizations have not always recognized the benefits of temporary help, including greater flexibility and possible cost savings.

You may be surprised to learn that the kinds of workers available to fill project-based or short-term positions aren’t limited to administrative staff. Many not-for-profit professionals, including executives, fundraisers, accountants, project managers and public relations experts, can be found to assist on an interim basis, either as independent contractors or via employment agencies. In recent years, several agencies specializing in not-for-profits, and even in specific roles such as development personnel, have emerged.

Best Uses

Some tasks and positions lend themselves to outsourcing better than others. For example, smaller nonprofits usually can do without full-time IT specialists — particularly when the marketplace is brimming with technology contractors available to work on a project or hourly basis. And you can easily send out creative projects, such as newsletters, brochures and invitations, to creative agencies or freelance writers and graphic designers.

Many financial functions can be outsourced, too. In fact, if your staff or board members aren’t qualified to manage your nonprofit’s investments, you should turn your portfolio over to a professional money manager you trust. Accounting jobs, including payroll and receivables processing, can also be handled by a third party. Just be sure to thoroughly investigate financial services vendors with your Secretary of State’s office first.

Practical Issues

It may not be practical to outsource tasks that require extensive knowledge of your organization, its niche and constituents. Development staff members who have close, longstanding relationships with major donors or community leaders, for example, aren’t easily replaced with temps.

What’s more, the right short-term employees aren’t always easy to find — particularly when it comes to workers with specialized skills or not-for-profit experience willing to work at rates you can afford. The time and money you spend searching for and training temporary help could end up costing you more than retaining a full-time staff member would.

Appropriate Solution?

In an uncertain economic environment, it may be some time before you feel confident enough in your not-for-profit organization’s future to hire all the full-time employees you need. So consider creative ways to work with a tighter budget in the meantime. Outsourcing may be an appropriate solution if you have work that must get done, but you can’t make a long-term financial

Eric Cohen, CPA is the President and Founder of E. Cohen and Company CPAs, a full-service CPA firm serving nonprofit organizations, government contractors, professional service companies and other industries with audit, tax and business advisory services for over 25 years. The firm was commended as a SmartCPA Reader's Choice by SmartCEO magazine and a “Best Accounting Firm to Work For” by AccountingToday magazine. For more information, visit www.ecohencpas.com or call 301-917-6200.