Outsourcing for Nonprofits: What It Is and Why It Matters

It’s no secret that nonprofit professionals often wear many hats. From fundraising to marketing to financial management, there are so many essential responsibilities for running a nonprofit that it quickly becomes expensive and time-consuming to hire a different person to fill each role. The smaller your organization is, the more likely it is that one staff member will have to take on a variety of activities that could benefit from specialized expertise.

However, there is another solution: outsourcing. When your nonprofit outsources certain responsibilities, you partner with external professionals specializing in those areas, saving time and money while gaining the expertise you need to achieve your goals.

To help you get started, this guide will provide you with an overview of outsourcing for nonprofits by answering the following key questions:

• What are the main benefits of outsourcing?
• Which nonprofit roles lend themselves to outsourcing?
• How do I find outsourced professionals for my nonprofit?

As you consider whether to outsource certain services, remember that every organization has unique needs and goals. Not only should the roles you choose to outsource align with your strategy, but the professionals you partner with also need to understand that strategy and be able to meet your needs. Let’s dive in!

What are the main benefits of outsourcing?

Ultimately, outsourcing aims to free up your staff members’ time so you can get back to focusing on your mission. However, there are a few additional benefits of outsourcing that your nonprofit can enjoy, including:

• Cost-effectiveness. Recruiting and onboarding new employees is expensive, not to mention the complete compensation package you’ll need to provide for their entire tenure at your organization. When you outsource, you can usually receive all your needed services at a much lower cost.

• Access to expertise. Although you’ll pay less for outsourced services than an in-house professionals, you’ll still gain access to the same level of expertise in the role you’re trying to fill. You might even be able to tap into the knowledge and experience of a whole team of outside consultants, depending on what firm you choose.

• Scalability. Many outsourced professionals offer a range of service packages, so you can choose the one that aligns with your current needs and budget. Then, you can scale up or down as your organization’s situation changes.

• Risk management. Diversifying your team through outsourcing can help prevent risks at your nonprofit. Ensuring your organization is adequately staffed can open up everyone’s time to check in with each other and increase visibility across your team, which reduces the likelihood of risky situations arising. Plus, outsourced professionals provide an outside perspective to help identify potential risks that sometimes go unnoticed internally.

To maximize these benefits, make sure to hire professionals who have experience working with nonprofits. Operating a nonprofit is very different from running a for-profit business, so your outsourced partners must have a strong understanding of nonprofit regulations and success strategies for your partnership to succeed.

Which nonprofit roles lend themselves to outsourcing?

There are many services that your nonprofit could outsource, so you’ll need to evaluate your budget and compare your levels of need for each potential service to hire the best combination of outsourced professionals for your organization. 

Some of the most common roles that nonprofits outsource include:

• Information technology. External IT professionals can set up new software, create logins for each of your team members, troubleshoot technical issues, and ensure you follow best practices for security and privacy compliance.

• Marketing and design. Each nonprofit marketing professional you encounter will likely specialize in a different area of communications or design. For instance, one agency might be entirely dedicated to building websites, another may provide direct mail marketing support, and another might focus on Google Ad Grants management.

• Financial services. There are two main types of outsourced financial professionals your nonprofit could hire: accountants and part-time chief financial officers (CFOs). An outsourced nonprofit accountant handles essential financial reporting and analysis tasks, including reconciling your bank accounts and filing your annual tax returns. Meanwhile, a fractional CFO focuses more on the strategy side of nonprofit financial management, with responsibilities such as cash flow forecasting and developing your annual operating budget.

When choosing which roles to outsource, the most important consideration is whether you already have someone at your organization with the knowledge and experience necessary to do a job well. For example, if your fundraising coordinator has a degree in marketing and worked as a social media manager before coming to your organization, you may not need to hire an external marketing consultant. But if no one on your team is a certified public accountant (CPA), you’ll probably want to outsource your accounting services.

How do I find outsourced professionals for my nonprofit?

Hiring outsourced professionals is slightly different from recruiting and onboarding new staff members. Outsourcing is typically more streamlined because you don’t have to complete the process of creating job postings and conducting formal interviews. However, you must carefully consider which agency or individual contractor to partner with to find the best fit for your organization’s needs.

Averill Fundraising Solutions’ consultant hiring guide lays out the following five-step process for partnering with an outsourced professional:

• Identify your goals and needs. Start by clarifying what your organization hopes to accomplish, then work backward to determine what type of support you need in that process. For instance, if one of your goals is to collect more online donations in the coming year, the gap you need to fill might be building a more effective donation page, which an external web developer could help you do.

• Leverage your network. Reach out to other nonprofits in your community or vertical to see if they’ve worked with the type of outsourced professional you’re looking for, and if so, ask about their experience with the agency or contractor they hired. You can also use online tools to aid in your research, such as consultant directories, Google reviews, and even LinkedIn.

• Meet with your top candidates. While this doesn’t have to be a formal interview, it’s important to talk to potential candidates either in person or over the phone. This way, you can gauge their interest in working with you and whether they could collaborate effectively with your team.

• Request proposals and check references. Ask your top three or four choices to submit proposals detailing their plan for working with your organization, their credentials, and projected cost. Additionally, request references so you can better understand what it’s like to work with that professional.

• Sign a contract. Once you make your final decision based on the proposals you receive, discuss the final details of your work agreement with your outsourced partner and sign a contract. This makes your partnership official and ensures everyone is on the same page as they begin their work.

Keep in mind that the outsourcing process isn’t always linear. It’s completely fine to continue adjusting your goals as you research or return to your network after meeting with a few options that aren’t the right fit.

However, sometimes you have a deadline to meet for an activity that requires an outsourced professional. For instance, you might need to find a direct mail marketing service to get your year-end fundraising appeals out before GivingTuesday or hire an accountant to file your annual Form 990 by its typical due date of May 15. In those cases, start your search well in advance if the hiring process takes longer than expected.

Outsourcing is a great way to gain access to the expertise your nonprofit needs to accomplish specific tasks while saving time and money. Just make sure to choose an external partner who has experience working with nonprofits, provides services that align with your needs and goals, and offers pricing plans that fit into your organization’s budget.