Non-profits that only service other non-profits?
October 3, 2020 2:29 PM   Subscribe

What can you tell me about non-profits that only exist to provide other non-profits with infrastructure and services such as office space, staffing, accounting, IT etc with the purpose of enabling these non-profits to focus on their core mission. Is this a thing? Why not?
posted by Foci for Analysis to Work & Money (12 answers total) 4 users marked this as a favorite
You might want to do some reading on fiscal sponsorship to get an idea of what already exists in the 501c3 non-profit realm.
posted by mandymanwasregistered at 2:56 PM on October 3, 2020 [4 favorites]

It is a thing. Both fiscal sponsors as linked above and orgs that provide back office services. Here's one I found by googling that phrase:
For why it's not more common, I think it's down to the difficulty in fundraising for such functions.
posted by entropyiswinning at 3:01 PM on October 3, 2020 [1 favorite]

Another one local to me is NEW. And yes raising funds for these can be harder. Culture Source is another one in Michigan
posted by leslies at 3:36 PM on October 3, 2020

Yes, it's in thing. In Charlotte, where I live, there's an organization that owns a building to offer below-market rent rates to nonprofits, as well as shared services. I assume there are similar models in other cities.

I also was involved with a nonprofit that sourced, trained and placed corporate and individual volunteers with other organizations (an affiliate of the national Hands On network). It eventually had to merge with the local United Way because, as mentioned above, it was difficult to fundraise and they often ended up competing against their partner organizations for grants and donations.
posted by Sweetie Darling at 3:48 PM on October 3, 2020 [1 favorite]

Back in my early career, I worked with an organization like the one described in Sweetie Darling's first para. They built a building to house a bunch of nonprofits that were scattered about the region in interesting, but ramshackle 1910s farmhouses and other completely inappropriate buildings that were always in terrible shape because they needed major renovations and the orgs could only ever afford to paper over the problems.

By gathering everyone into one place, it created a vibrant community that ended up being much more collaborative than it was when everyone was spread out all over town. Phone calls just don't get things done the same way as walking over to someone else's office does.

Anyway, the org that owned the building paid for utilities and internet service, but IT was left to the individual orgs. One of the people my company worked with left his previous nonprofit to start an shared services organization to handle the internal IT needs of the individual nonprofits at a lower price than even my employer's very discounted rate. It worked well enough that everyone we had previously been doing work for transitioned over the course of a year or so and was still doing its work last I checked, some 15 years on.

In short, it definitely is a thing at least in some communities and it certainly can be beneficial for all parties involved, so long as the people in charge don't rate their own performance based on the number of people they have on the payroll.
posted by wierdo at 4:22 PM on October 3, 2020 [2 favorites]

I used to work for one of these! I did tech support for Third Sector New England in Boston about a decade ago. I split my time probably 50/50 between providing technical assistance of all kinds to our clients (ranging from "our internet is down" to "how do I get started with social media" to "what's a database" to "how do I set up a printer?") and providing internal tech support within the company.

When I was there, our company as a whole focused a lot on providing financial, technical, and marketing assistance to other nonprofits. We also rented out office space to these nonprofits, though not all of our clients rented space from us; a lot were one- or two-person operations, and/or just getting started.

Internally, I'd guess probably 1/3 of our employees were dedicated to fundraising and financial management of some sort. I know we had some steady external funding from long-term associations, but I knew very little about the details.
posted by Pandora Kouti at 5:36 PM on October 3, 2020

Taproot is another example of this.
posted by tinymegalo at 6:07 PM on October 3, 2020

Here in the Seattle area we have Rainier Valley Corps .
posted by brookeb at 7:06 PM on October 3, 2020

I should add that I've worked in fiscal sponsorship for a number of years, currently at a large/full service org in primarily government grant administration. The whole focus on your core mission while we handle the rest is definitely part of the pitch.

Orgs like ours can be especially helpful to projects that want to take on government contracts, but lack the financial padding to work on a reimbursement basis or the systems established for all of the financial tracking/documentation required to survive a contract audit. Some have grown enough that they are transitioning to be their own legal entity.

The challenge at times can be explaining to funding entities unfamiliar with fiscal sponsorship, however the flipside to that is funder who know us know we have decent oversight of the project's finances and might be more likely to give something new a chance.

Apart from the admin/finance side (vast majority of day to day contact happens via finance/HR/grants/contracts), there are also staff who focus on things like leadership and/or org development.
posted by mandymanwasregistered at 7:16 PM on October 3, 2020

The Nonprofit Finance Fund (NFF), a nonprofit itself, fits in this category: "NFF promotes the success of nonprofits by providing capital, strategic consulting, and using our knowledge and influence to transform the funding and financing landscape."
posted by Synesthesia at 8:57 PM on October 3, 2020

TechSoup is another example.
posted by Pryde at 9:57 PM on October 3, 2020

What would seem to be another prominent one, that I've just encountered as a non-profit consumer as it were, is ActBlue which enables left-leaning nonprofits, Democratic candidates, and progressive groups to raise money from individual donors on the Internet by providing them with online fundraising software. They appear to fund themselves by doing a sort of voluntary “point-of-sale” suggestion to donate a tiny bit to them, too, when you donate to your primary target. They also levy processing fees according to the Wikipedia article.
posted by XMLicious at 5:14 AM on October 4, 2020

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