The Nonprofit FAQ

Is a Management Company a Good Idea for an Association

itsforsale@email.com wrote to soc.org.nonprofit on June 6, 1999: I am a member of a volunteer organization of about 800 members nationwide. Currently we employ a professional management company to handle our organization's business. They help publish our newsletter, answer phone inquiry, send out membership packages etc. We are not alltogether happy with the performance and the cost of the service is running us into financial difficulties. We currently pay about $60,000 a year plus a bonus. We are looking into moving toward some other type of management and have considered hiring one person to work for us exclusively full time with some part time help. Does anyone have an organization that does this? Does it work? downside? upside? Any internet links we should look at? reference sources? thanks Jude Crouch (jcrouch@pobox.com) offered these comments: I think you ought to separate the two issues: performance and cost. 60K does not seem out of line to me. One person who is professional enough to work unsupervised is going to cost you at least $30K plus benefits. Add taxes and Workmen's Comp. Add payroll costs. Add vacation and sick days, and the coverage you'll need for those days. Consider that one person can only answer one phone at a time. Add office space, computer expenses, telephone lines, fax machine, copy machine, furniture, etc. Also take into consideration how you will handle the situation when personnel leaves, recruitment of new personnel, training. All of this can be easily compared by adding all of the costs of the new system and comparing to the existing costs. Performance is another topic which has no relation to costs. Consider whether you can work with the management company to meet your expectations. Consider whether other management companies can fulfill your expectations without increasing your costs. Consider whether you are being reasonable, or just reacting to your financial condition. Perhaps what needs to be done is to raise more funds to pay for the services you need. A. Cravens added: Management companies are great, so long as your board of directors are still hearing from your members and others concerned about your agency's activities and mission, and your customers are having their needs met -- how much does this company filter such comments? Does the company track such comments and provide you with summaries, # of people calling in or e-mailing, trends in comments and complaints, etc? The Association for Volunteer Administration, an international-organization, has a one-person office (maybe two) and might be able to offer you some feedback. http://www.avaintl.org (And you might try looking at the American Society of Association Executives website -- http://www.asaenet.org to see what tips they offer on the topic. --PB) Posted June 8, 1999 -- PB