VE study of virtual back-office solutions could cut admin costs 60%, increase revenues 20%, for 22,000 NNE non-profits

ViTAL Economy recently completed a national study of back-office service solutions that could dramatically lower administrative costs for 22,000 small non-profits serving Maine, New Hampshire and Vermont. This research study, a FairPoint Connect NNE initiative, was the result of 18 months of interviews with hundreds of NNE non-profit leaders who noted that a top priority was sharing a back-office administrative services portal that did not compete with the mission of each non-profit.

VE also reviewed existing research; evaluated existing back-office shared service platforms and interviewed dozens of non-profit leaders. The research team, led by Frank Knott, documented that 75% of NNE non-profits:

  • Had annual operating budgets of $500,000 or less
  • Were one of the top 3 NNE employment sectors
  • Impacted 15% of regional gross product
  • Had a disproportionately large overhead rate compared to non-profits with annual operating budgets over $3 million

VE recommended a 10-point solution path to establish an on-line shared software and technical support portal focused on:

  • Finance, accounting and funder audits
  • Human resources and volunteer management
  • Case management and compliance
  • Donor management and fundraising
  • Information and communications technology technical support
  • A virtual help desk

Return on investment (ROI) analysis indicates that such a service could improve non-profit audit compliance by 90%, increase operating revenue by 20% and lower back-office operating costs by 60%.

Non-profit leaders accepted the research recommendations and asked VE and Connect NNE to help develop a business strategy to launch a non-profit, back-office services portal.