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