New opportunity for "economies of skill"?

In a recent Star Tribune editorial, Commissioner Dana B. Badgerow (of Department of Administration) highlights shared services as an effective approach to improving efficiency and lowering costs for state and local governments. She argues the consolidation of administrative tasks, shared-servicing, and reducing government bureaucracy will save taxpayers at least $210 million through 2010.

Her opinion piece caused me to ponder what opportunities these standardization processes offer the nonprofit sector. The majority of nonprofit organizations operate budgets under $500,000 with limited staffing and find themselves under-resourced related to administrative capacity. Here are some current innovative approaches that might shed some light on consolidating efforts:

-- MACC Alliance of Connected Communities is a strategic partnership of now 27 community organizations that have joined together to leverage their collective resources and voice. Their unique alliance honors the individual identities and histories of its member agencies and forges innovative partnerships among members and with nonmember agencies, businesses and leaders. MACC members share the goals of serving individuals, families and various communities that are defining the future (taken from their website).

In this strategic collaboration participating agencies cut organizational expenses by sharing administrative functions like finance, human resources, and information technology. According to Jan Berry, President of MACC Alliance of Connected Communities (MACC) "We’ve simultaneously reduced costs and dramatically improved our infrastructure."

---MAP for Nonprofits - Project Redesign encourages, guides and supports nonprofit organizations that are considering mergers. MAP for Nonprofits is positioned to help nonprofits consider merger options that can provide the strength necessary for survival, particularly in these economic times. According to MAP Executive Director Judith Alnes, "tight financial situations can limit organizations' ability to effectively deliver their services, and mergers can provide some fiscal relief. Mergers also allow organizations to enhance their programmatic offerings."

--- Some have urged funders to consider sharing collaborative technologies and processes for grantmaking and fundraising efforts. These systemic approaches could have alleviate the myriad of reporting practices required by various funders, contractors, and stakeholders.

Commissioner Badgerow calls this an opportunity for us to "gain not only economies of scale, but also economies of skill." I can see how efforts in consolidation might provide new opportunities for nonprofit organizations to both support their back-office functions and focus on their strengths of providing programs to people in need. This approach also has a number of challenges associated with it. PubTalkers...what do you think?


In my pro bono work with non-profits, I am also noticing that more organizations are considering mergers or other formal collaborations with like-minded organizations. And I think this makes tremendous sense. I echo Kim's comments and urge leaders of these important community assets to think carefully about formalizing strategic partnerships with a mind toward maximizing efficiency during these lean times.

In my view, one of Minnesota's most precious resources is the wealth and diversity of our of civic and community organizations. This view is no doubt shared by many, as Minnesota is replete with resources to support those organizations. Kim highlights great resources for non-profits weighing partnership options in her post above. To those resources, I would like to add lawyers. Don't hesitate to reach out to a lawyer when you're at such crossroads. We have a commitment to provide free legal services in our communities, and while most of us are in the courts -- many of us assist small non-profits on a pro bono basis.

Don't know a lawyer? Try the Volunteer Lawyers Network ( or MAP for Nonprofits (

Post a comment

Hubert H. Humphrey Institute of Public Affairs
The views and opinions expressed in this page are strictly those of the page author(s), and do not necessarily reflect the views or opinions of the Hubert H. Humphrey Institute of Public Affairs or the University of Minnesota. The contents of this page have not been reviewed or approved by the University of Minnesota or the Hubert H. Humphrey Institute of Public Affairs.