Should your nonprofit outsource to an AMC?
If you’re like most nonprofit leaders, you want to dedicate your time to mission-critical work. But if you run a relatively new nonprofit with a bare-bones staff, you probably need to pay considerable attention to administrative and business tasks. Hiring an association management company (AMC) could be a cost-effective solution for your time- and staffing-challenged organization.
Sharing overhead costs
AMCs are paid to manage a nonprofit’s business, leaving executives and staffers to take care of their organization’s mission. An AMC’s clients — generally an array of nonprofits, including trade associations, professional societies and charitable organizations — share overhead costs.
Many AMCs serve as the contracting nonprofit’s headquarters, providing it with significant savings on space and equipment costs. Perhaps your nonprofit has employees to fill essential operations roles, but you need regular attention paid to other critical functions. These could include strategic planning, membership development, employee benefits administration or IT management. You pay only for the services you need, generally as a flat fee or monthly retainer.
How do you know if your nonprofit might benefit from engaging an AMC? First, conduct an organizational audit to evaluate whether your nonprofit keeps up with its administrative needs. If your current staff doesn’t have the time, skills or tools to address these needs, you have a few options: Hire additional employees, reduce activities or engage an AMC that offers the expertise you need.
Meet the candidates
If you decide to go the AMC route, you’ll need to identify potential candidates. One possible starting point is the AMC Institute, which provides accreditation to qualified AMCs and has a search tool for finding them on its website.
To simplify the evaluation process, choose the top three or four firms based on the types of services they provide, years of experience and cost. Also determine if one AMC can handle all of your nonprofit’s needs.
Then conduct interviews in person or via video conference. Ask the AMCs about their work with current clients and the length of those relationships. Also question potential AMCs about the specific services you require and their level of experience and expertise managing such services. Be sure to review each AMC’s references — paying special attention to references from organizations similar to your own — before engaging one.
Help making the decision
AMCs are particularly useful for nonprofits that are growing rapidly. Maybe you intend to hire an employee to manage a specific function but are unable to justify the expense right now. An AMC might fulfill your short-term need. We can help you conduct an organizational audit to determine where such needs lie and how an AMC might help.
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