The Benefits of Outsourcing for Non-profits from a Response Management Perspective

As the President of Merkle Response Management Group, I lead the many facets of our business – from client satisfaction, product enhancements and new services, to sales presentations, business strategy, employee engagement and process improvement. No two days are ever alike. In my free time, I like to create things. I am a frustrated artist at heart who enjoys Plein Air landscape painting, and crafting furniture and home accessories from wood. I also enjoy working on my restored ’66 VW Bug. Non-profits are in the business of relationships and depend on fostering close connections with donors to generate the funds that sustain their missions. You might think this special circumstance would make it less likely for non-profits to outsource certain operations to a response management firm, but there are many benefits to doing so.

1. Staffing. From a non-profit perspective, a very tangible benefit of outsourcing is the elimination of some of the hassles of staff management. More than most businesses, non-profits experience a wild swing in workload during the year due to traditional seasonality and mailing schedules. This makes it difficult to anticipate staffing needs. Additionally, there’s the related issue of having to fill vacant positions, or consider coverage when people are sick or on leave. Outsourcing solves this problem and allows a non-profit’s staff to focus efforts on their mission.

2. Turnaround. For sensitive hi-touch exception work, outsourcing provides a faster turnaround time than returning that work back to the non-profit to handle. Items such as tributes, high dollar donors, declined credit cards and others can be dealt with quickly. If a non-profit takes care of these transactions internally, there’s a greater chance that they might remain on an employee’s desk longer than desired due to other demands, priorities and workload.

3. Costs. Most non-profits are typically located in large metropolitan areas where labor and benefit rates are higher, so it costs more for them to take care of certain donor management functions. Direct response management companies like Merkle Response are generally located in urban areas with a lower labor cost. Non-profits can realize significant savings in pure dollar amounts by outsourcing work to vendors in these lower cost locations.

4. Focus on the mission. By outsourcing necessary but time-consuming activities, non-profits can focus their attention on mission-critical tasks to grow their donor base such as reactivating lapsed donors, reaching out to high dollar donors and cultivating new ones. Most non-profits operate with very lean staffs so outsourcing allows them to focus on their mission and advance it among constituent groups, growing their donor ranks and enhancing their overall impact and effectiveness.

5. Quality. Outsourcing to a response management company allows non-profits to take advantage of both the latest technology and quality certifications without having to assume the costs of either. Merkle, for example, has an ISO 9001:2008 quality certification, a globally-accepted documentation process for consistently measuring and maintaining quality across an entire organization. We also conduct an annual SSAE16 audit (formerly called the SAS70) of generally accepted accounting practices, ensuring that we’ve undergone a third party audit that evaluates business processes and controls by objectively “testing” internal processes, from receipt of mail through deposit of funds. Similarly, certification as a Tier 1 processor compliant with Payment Card Industry (PCI) standards ensures that a response management company adheres to PCI Data Security Standard (DSS) requirements for security management, policies, procedures, network architecture, software design and other critical protective measures.

6. Technology. Non-profits don’t have the necessary resources to continually invest in the ever-changing technology of donation processing and donor care. Outsourcing allows them to enjoy the benefits of the newest scanning software and hardware, automated mail opening equipment, robust fulfillment and inventory management systems, state-of-the-art contract center systems and an in-house staff of IT professionals to make it all work seamlessly.

The benefits of outsourcing for non-profits are clear. The disadvantages? None that I can think of. How does it look to you?