Written by Laurance A. Pagnoni, president Laurence A. Pagnoni & Associates
Thirteen years ago, as executive director of a human services organization, I was faced with two problems: I saw hired staff fail and realized that I needed a higher level of thinking than I could afford to bring inside the organization. A friend recommended an outside specialist. At first, it seemed unusual to be reaching outside of the organization. Then I realized that my bookkeeper was only on the premises for two days a week, and my direct mail service had never been on-site. My frame of reference suddenly changed, and I began to explore an option that many nonprofit organizations still do not explore or underutilize.
In fact, while preparing this article, I contacted the Hauser Center for Nonprofit Organizations at Harvard University, the Aspen Institute, and several other think tanks to inquire about the latest research on nonprofits and outsourcing, and found that it was almost entirely nonexistent!
Outsourcing is now a $450 billion industry. It refers to the practice by which a company delegates certain in-house functions to a third party. In a fast-paced world, it is often used as a synonym for offshoring, which refers to the growing practice of American, Japanese, and European firms to outsource to third-world countries where wages are low, regulations are few, and the costs of doing business are substantially less. Having become identified with offshoring, outsourcing may perhaps seem an unsavory practice, particularly to members of the helping professions who have a keen sense of social justice. "We don't outsource," the development director of a downtown youth services agency recently advised a consultant who sought an interview with her. Her tone was dismissive, as if she were being asked to support the death penalty or carry a concealed weapon.
One can even detect something of a "backlash" in the nonprofit world. Read more.