Forward-Thinking Cooperative Revolutionizes Nonprofit Office Operations, Nets $5 Million in Savings
The innovative Back Office Cooperative, a collaborative group of nonprofit organizations in Chicago, is celebrating its fifth year of operation and $5 million in collective savings for its members. The cooperative was formed in 2008 with lead investments from the United Way of Chicago and the Chicago Community Trust and pro bono consulting assistance from McKinsey and Company. It has leveraged collective scale purchasing and shared best practices, to improve operational efficiency and reduce costs, allowing members to direct more resources toward their service missions.
The Back Office Cooperative works with members to identify areas of need, then negotiates with business partners to offer products and services at a level of savings the agencies would not be able to achieve individually. Current Cooperative offerings include finance and accounting services, supplies and food, energy,janitorial services, telecommunications, and insurance.
“Through collaboration, efficient supply chain management and the use of the same innovative business practices used in the business world, the Back Office Cooperative has saved members a total of $5 million dollars since its inception,” says David McConnell, Back Office Cooperative Board Chair and Chief Financial Officer for One Hope United, a founding member of the Cooperative. “Applying these sound business principles to our daily administrative operations enhances our ability as nonprofits to do the work we set out to do—helping people and changing lives.”
Membership in the Cooperative has grown from a handful of founding agencies in 2008 to 30 members today. Members include human services organizations, schools, health providers and community development organizations.
“In these difficult economic times, the Back Office Cooperative helped El Hogar Del Ninño manage costs and reduce expenses. They have offered keen advice and insight into multiple areas of cost reduction. I’ve experienced BOC and their key vendors, such as Expense Reduction Analysts, to go well above and beyond in providing excellent service. With their guidance we were able to substantially reduce cost in the areas of insurance and office supplies. We are very happy to be associated with their services and will continue to grow our relationship with them in the future.” stated Mario Perez, Executive Director of El Hogar del Nino.” In 2012, El Hogar Del Nino, saved $26K in just over one year after becoming an affiliate member.
Ric Estrada,President and Chief Executive Officer of Metropolitan Family Services, said: “We have saved more than $1 million in our five years with the Back Office Cooperative. As the human services sector continues to face funding challenges,adopting self-sustaining initiatives like this has a real impact on our agency and the families we serve.” Metropolitan is a founding member of the Cooperative and is one of its largest members.
About Metropolitan Family Services
Metropolitan Family Services empowers families to learn, to earn, to heal, to thrive. Part mentor, part motivator, part advocate, since 1857 Metropolitan Family Services has been the engine of change that empowers Chicago-area families to reach their greatest potential and positively impact their communities.