Shared Services That Work: Surprise Findings from Charlotte-Mecklenburg Nonprofits
Today’s Agenda I.
Welcome
Holly Welch Stubbing
II.
Overview of MSO Charge
Tom Brydon
III.
Research Findings
China Brotsky & Roxanne Hanson
IV.
IT Shared Services
Chris Meade
V.
HR Shared Services
Peggy Eagan
VI.
Closing Remarks & Questions
David Snider
Welcome
Holly Welch Stubbing, SVP-Client Services & Legislative Affairs
Community Catalyst Fund Members
Today’s Agenda I.
Welcome
Holly Welch Stubbing
II.
Overview of MSO Charge
Tom Brydon
III.
Research Findings
China Brotsky & Roxanne Hanson
IV.
IT Shared Services
Chris Meade
V.
HR Shared Services
Peggy Eagan
VI.
Closing Remarks & Questions
David Snider
MSO Task Force Members • • • • • • • • •
Pat Phillips, Chair – Former BOA Executive Austin Adams – Former JPMorgan Chase Executive Laura Belcher – COO/ CFO, ASC Tom Brydon – Former Managing Partner - Accenture Gene Cochrane – CEO, Duke Endowment Andy Elliott – Partner, PricewaterhouseCoopers Matt Packey – CFO, Queens University Laura Meyer – EVP, FFTC Russell Schwartz – VP Administration, United Way
MSO Task Force Charge by CCF
•
Assemble a Task Force of volunteer experts
•
Seek proposals to conduct local assessment
•
Task Force to determine if viable to take to full planning & implementation phases
Goals for Charlotte-Mecklenburg MSO 1. Provide affordable, quality back-office services for nonprofit organizations to increase their effectiveness 2. Focus highly-qualified professionals on back-office services so program staff can focus on their missions 3. Develop a financially-sustainable shared service solution
Request for Interview (RFI)
Financial Modeling
Shared Services Grants
In-depth NPower/ CFSC Due Diligence Pro Bono Legal Counsel
Comprehensive MSO Survey
MSO Task Force
Procurement Interviews
HR Interviews
MSO Interest Survey
RFIs/ Consultant Selection Local Interviews
Focus Groups
National Interviews
Task Force/ MSO Timeline March – May
Recruiting of Task Force Members
June
Defined scope of MSO project Created & finalized consultant selection process
July
Consultant interviews and selection Research and analysis Presentation to CCF and grant approval
September
Task Force meeting – first results
October
Final results of studies and interviews
November
Reviewed in-depth information on focus areas, summarized research & debated recommendation
December
Task Force recommendation to MSO Task Force
January – April
11 Grant awards/ NPower & CFSC begin work/ Launch event
Today’s Agenda I.
Welcome
Holly Welch Stubbing
II.
Overview of MSO Charge
Tom Brydon
III.
Research Findings
China Brotsky & Roxanne Hanson
IV.
IT Shared Services
Chris Meade
V.
HR Shared Services
Peggy Eagan
VI.
Closing Remarks & Questions
David Snider
Charlotte-Mecklenburg Managed Services Organization Project
Community Presentation April 13, 2011
Challenges • The Nonprofit Economic Crisis • Reduced Funding • Increased Community Needs • Accessing Quality Space and Services
Opportunities: What Works
Youthville Detroit, MI
• Nonprofits and foundations focused on solving the problem • Nonprofit dollars can be leveraged to create sustainable infrastructure • Proven models exist
Almost Anything Can Be Shared
NonProfit Center Boston, MA
MSO Task Force • Community Catalyst Fund initiated • Research on feasibility of Managed Services Organization (MSO) • Hired Tides for feasibility study
Goals for Charlotte-Mecklenburg MSO Project • Provide affordable, quality back-office services for nonprofit organizations to increase their effectiveness. • Focus highly-qualified professionals on back-office services so program staff can focus on their missions. • Develop a financially-sustainable shared service solution.
Project Feasibility • Service Demand > Size of nonprofit market > Unmet need and satisfaction with current providers
• • • •
Desirable product/service Client criteria for satisfaction Competitive Landscape Sustainable financial model
Market Research • Nonprofit Survey > Received 71 responses, 78% response rate
• Focus groups > 4 groups, 18 organizations
• Participant Interviews > 17 different organizations > Emphasis on target market
Charlotte-Mecklenburg Nonprofits • Interested in managed services • Limited spending • Feel vulnerable in human resources management
Charlotte-Mecklenburg Nonprofits Current Provider Satisfaction
Price IT Service Provider
64%
IT Equipment Supplier
59%
Office Supplier Furniture & Equipment Supplier*
Availability/ Expertise Inventory Convenience 74%
Customer Service
72%
78%
68%
68%
54%
52%
90%
90%
59%
55%
70%
70%
65%
* Excludes participants who use primarily donated furniture and equipment
Charlotte-Mecklenburg Nonprofits • Some experience with outsourcing • Seeking customized, flexible services • Looking for strong provider reputation and relevant experience • Will not sacrifice quality or pay more
Market Research • Local Provider Interviews > > > > > > > > > > >
ADP Total Source and ADP Resource Beacon Technology Benefit Controls Children & Family Services Center CNP Technologies The Employers Association North Carolina Center for Nonprofits Npower Charlotte Region Premier Inc. TriNet United Way of Central Carolinas
Market Research • National Provider Interviews > > > > > > > > > > >
California Association of Nonprofits, Los Angeles, CA CCA for Social Good, Manchester, NH The Foraker Group, Anchorage, AK GroundWork Group, Columbus, OH Lumity, Chicago, IL MACC Commonwealth, Minneapolis, MN NEW’s npServ, Ann Arbor, MI Nonprofit Purchasing Group, Del Mar, CA PHMC, Philadelphia, PA Pittsburgh Cultural Trust, Pittsburgh, PA United Community Services Co-op, Vancouver, B.C.
Market Research • HR & Employee Benefits Interviews > > > > > > >
Robert Chambers, McGuireWoods, LLP Jef Fullagar, CarolinaPEO Employer Services Assurance Corporation Morgan Stanley Smith Barney National Association of Professional Employer Organizations Wells Fargo Insurance Services Woolard Financial Advisors
• Corporate Partner Interviews > Bank of America > Duke Energy > Wells Fargo
Nonprofit Clients • • • • •
Based on national and local research Loyal to existing providers Require “high-touch” services Undercapitalized Ideal budget size between $1-4M
Purchasing
Purchasing Interest in joint supply and equipment purchasing Relatively small volume of spending 75% use donated furniture or equipment Supply purchasing has extremely low margins, very competitive • No self-sufficient purchasing model at this time • Sector partnerships possible for specialized equipment and supplies • • • •
Technology
Technology
Technology • • • •
65% of organizations interested in shared IT services Hardware investments made in last 3-5 years Software procured at up to 95% discounts Top needs > Training > Sector-specific niche applications > Systems integrations/large projects
HR and Employee Benefits • 85% of organizations express interest in joint insurance • Spending ~$13.35M on employee benefits • Insuring 640 employees • Over 70% satisfied with current insurance and benefits providers • Health care cost increases are big concern • Commitment to maintain benefits
HR and Employee Benefits • Top needs > Affordable health insurance > HR consulting services/risk management
HR and Employee Benefits • Regulatory environment allows pooled employee benefits, but insurance companies will not write • Changes in health care environment make group purchasing model practically unavailable • Corporate HR providers will not work with “high risk” organizations
Shared Services Providers Results of national research: • Often nonprofit organizations • Typically grow organically • Take 3-5 years to reach self-sufficiency • Achieve impact through multiple services
Shared Services Options 1. 2. 3. 4. 5.
Establish New Managed Services Organization Incentivize Commercial Providers Grow Local Nonprofit Providers Use State Association Benefits No Managed Services
Structure Options
Structure Options
Structure Options
Structure Options
Structure Options
NPower Charlotte Region • Technology Training Tools > User groups > Onsite coaching
• Technology Capacity-Building Projects > Project Grants
Year Up, New York, NY
Technology Solution • Value Proposition > Successful peer-learning and problem-solving model > Customized for real-world needs of nonprofit organizations > Focus on nonprofit-specific applications and technology uses > Identifies best practices and top technology solutions > Provides cost-efficient ongoing professional development and learning opportunities
Technology Solution • Outcomes > > > >
Better use of technology tools by nonprofits Enhanced e-visibility for nonprofits Increased nonprofit staff efficiency Mutually-beneficial relationships between corporate partners and nonprofits
Children & Family Services Center • Service contract for HR Services • Participants maintain existing benefits plans • Core HR services > > > >
Payroll Personnel policies and templates Employee management support HR training
• Optional services > Recruitment > Benefits bidding
HR Solution • Value Proposition > Trusted team of HR advisors who know the nonprofit sector to help mitigate risk > High-touch services > Best practices of Charlotte-Mecklenburg nonprofits > Fully compliant payroll services > Ongoing HR training specifically designed for nonprofits > Keep current benefits providers
HR Solution • Outcomes > Improved staff morale and retention > Decreased HR risk > Increased recruitment of qualified, valuable staff members
Catalyst Community Fund Support • NPower: $264,800 • Children & Family Services Center: $ 50,000 (feasibility study & business plan)
The NonprofitCenters Network
The premiere learning community for shared nonprofit space and services www.nonprofitcenters.org
Contact Roxanne Hanson Director of Education and Consulting, Tides PO Box 29198 San Francisco, CA 94129 [415] 561.6311 rhanson@tides.org China Brotsky Senior Vice President, Tides PO Box 29198 San Francisco, CA 94129 [415] 561.6300 china@tides.org www.tides.org
Questions?
Today’s Agenda I.
Welcome
Holly Welch Stubbing
II.
Overview of MSO Charge
Tom Brydon
III.
Research Findings
China Brotsky & Roxanne Hanson
IV.
IT Shared Services
Chris Meade
V.
HR Shared Services
Peggy Eagan
VI.
Closing Remarks & Questions
David Snider
IT Shared Services Lead
NPower Charlotte Region Chris Meade, Executive Director
NPowering Change in the Community Nonprofit Tech Needs
Technology Resources
Shared Technology Services
NPower Shared Services
How To Get Involved?
• User Groups – Register for a current group and/or submit interest form
• IT Coaching – Submit an interest form
• Project Pool – Wave 1 is by invitation, Wave 2+ via open call for ideas
• Solutions Center – Schedule an Assessment
Today’s Agenda I.
Welcome
Holly Welch Stubbing
II.
Overview of MSO Charge
Tom Brydon
III.
Research Findings
China Brotsky & Roxanne Hanson
IV.
IT Shared Services
Chris Meade
V.
HR Shared Services
Peggy Eagan
VI.
Closing Remarks & Questions
David Snider
HR Shared Services Lead
Children & Family Services Center Peggy Eagan, Executive Director
Potential HR Services
Next Steps: Want to learn more? Meetings:
April 21 & May 5 11:30 -1:30 (Lunch provided)
Contact:
Peggy Eagan: 704-377-2899 Barb Bailey: 704-560-9431
Today’s Agenda I.
Welcome
Holly Welch Stubbing
II.
Overview of MSO Charge
Tom Brydon
III.
Research Findings
China Brotsky & Roxanne Hanson
IV.
IT Shared Services
Chris Meade
V.
HR Shared Services
Peggy Eagan
VI.
Closing Remarks & Questions
David Snider
Thank you!