Cooperative model opens doors to revenue generation
After several forced relocations, nine human service organizations in Charlotte, N.C., decided to put their destinies in their own hands—not in those of a landlord. Although sharing office space was the catalyst that brought the group together, even before the first capital dollar was raised, the group was already working toward a much deeper collaboration.
“The CEOs of each agency realized up front that we could construct a building and save money on rent. Or we could do something really different,” says Mark Pierman, president and CEO of United Family Services, a member of the Alliance for Children and Families. “We all went into this with the idea that we were going to find other ways to collaborate. We wanted one plus one to equal three.”
The nine organizations formed the Children & Family Services Center (CFSC) in 2000, a separate 501(c)3 with a shared services and shared governance structure. In 2003, they moved into a newly constructed facility in a central, easily accessible location that provides clients with a one-stop-shop for child and family services. Members rent space and pay a monthly fee for facilities management and administration.
With the move, the agencies immediately gained operational efficiencies through new technology installed in the building. That necessitated a move to a common telephone and information technology platform—a major step toward sharing services rather than simply sharing space.
But what began as an infrastructure sharing arrangement took a giant leap forward in January 2009 when CFSC consolidated to share the finance, accounting, and human resource services of six partner agencies into one.
“My agency has more than 100 employees, but I don’t have a human resources director,” says Pierman. “By sharing this service, I’ll receive a level of expertise for less than I could purchase it as an individual agency. I’ll have backup, so if a key administrative staff member is on vacation, the work will still get done. Sharing these services also frees my staff and me to focus on what we do best: delivering mission-related services.”
The partner agencies are also discussing sharing management for development activities, public relations, and other services.
Ultimately, CFSC hopes to develop service products that can be sold to other nonprofit agencies to generate revenue. Already CFSC is able to generate some revenue by leasing office space not used by partner agencies to other tenants at market price.
For Pierman, it all comes down to making sure children and families in the community receive better services. “I know this is the right thing to do,” he says. “The impact on children and families is greater when we’re working together rather than when we are acting individually.”
Collaborations require hard work and total commitment, not just in the planning and start-up phases, but on an ongoing basis, Pierman says, explaining how CFSC has weathered several challenges.
“Trust was one of the biggest issues at the beginning and probably still is. These agencies had no prior history of working together,” he says. CFSC hired a skilled consultant to help the agency executives get to know each other, communicate openly about difficult issues, and build trust. CEO turnover has had an impact; only two of the agency CEOs in place when CFSC was formed are still there. When they leave, trust must be rebuilt among a new team.
Pierman cautions other potential collaborators to expect to invest a huge amount of time and energy up front, on the part of the agency CEO and other key staff members. And he notes that saving money shouldn’t be the motivation for collaborations of this sort. “The benefits are more in the level of expertise and strategic value rather than cost-savings.”
CFSC has become a central hub in the Charlotte community for child and family advocacy. “The mission of my agency is to inspire individuals, families, and communities to find solutions that
create a better future,” says Pierman.
“This collaboration through CFSC is the perfect illustration of our mission at work.”
For more information about United Family Services visit the organization's website. Learn more about the Children & Family Services Center.
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