rss feed

Nonprofit Outsourcing: Should You Consider Hiring Contractors Instead of Employees?



<<Back to Blog

Small nonprofits often operate on a shoestring budget, with staff juggling multiple responsibilities. Outsourcing nonprofit operations can be a touchy subject, but understanding both the pros and cons of hiring contractors can help you make informed decisions for your organization.

Why Do Companies Hire Contractors Instead of Employees?

Businesses in general may opt to hire contractors instead of employees for a variety of reasons. And those reasons can apply to nonprofits, too.

Hiring contractors can save on costs, provide flexibility, and give access to specialized skills. It can also reduce the administrative burden associated with managing employees. Consultants, program directors, or event professionals are examples of flexible contractors with specialized skills for nonprofits.

What Are the Advantages of Outsourcing Nonprofit Operations?

Here are some of the pros of nonprofit outsourcing:

Cost Savings

Outsourcing can help nonprofits reduce operational costs, such as staff salaries, benefits, and office space. The savings can be channeled towards expanding programs and furthering the organization's mission.

Access to Expertise

Outsourcing provides access to skilled professionals in areas like finance, marketing, or IT. They can help your nonprofit shine without the need to maintain in-house expertise.


As nonprofits grow, their operations often need to be flexible. Outsourcing allows you to scale your operations up or down as your needs and objectives change. You can add or remove outsourced services as needed, without the burden of hiring or letting go of full-time staff.

Increased Focus on Your Mission

Outsourcing non-core functions can free up valuable time and resources, allowing your staff to focus on program development and fulfilling your organization's primary mission.

Improved Efficiency

Outsourcing brings in experts who already have the know-how, saving time and resources that would be spent on staff learning and mastering new skills to fill gaps.

Are There Disadvantages to Nonprofit Outsourcing?

Understanding the potential drawbacks of outsourcing nonprofit operations can help you avoid the most common mistakes and make the best decision for your organization.  

Loss of Control

Outsourcing can sometimes feel like handing over the reins of your favorite horse. This loss of control over specific functions can impact the quality of services and your organization's ability to respond quickly to changes.

Risks to Confidentiality and Data Security

Sharing sensitive information with outsourcing providers can expose your nonprofit to data breaches or privacy violations. Ensure the contractor you choose has strong security measures in place and an established, reputable freelance business.

Impact on Organizational Culture

Outsourcing can ruffle some feathers within your organization. Staff may feel threatened by the loss of job security or resentful towards the contractor, which can ultimately impact your organization's culture. Mitigate this by welcoming the contractor into your operations and considering staff feedback.

Potential Hidden Costs

Outsourcing can be a cost-effective solution, but beware of hidden costs. Contract negotiation, vendor management, and fees for additional services not included in the initial agreement can add up quickly. Be clear, concise, and consistent with any contractors you hire.

Quality Concerns

Contractors may not always have a clear understanding of the unique needs and priorities of your organization. Look for someone with experience in the nonprofit sector and maintain good communication throughout.

Best Practices for Nonprofit Outsourcing

Here’s how you can ensure the highest level of success possible for your outsourcing partnerships!

1. Thoroughly vet providers: Research and select reputable providers with proven track records to minimize risks and ensure a great experience for both parties.

2. Establish clear communication channels: Good communication is the key to successful outsourcing. Make sure there's open and effective communication between your nonprofit and the contractor you hire to avoid misunderstandings and missteps.

3. Set performance metrics: You can't manage what you can't measure. Setting measurable goals and tracking performance is essential for a successful outsourcing experience.

Support Networks Can Help

With the growing popularity of remote work, your options for bringing on expert contractors are better than ever.  

Join nonprofit support networks like NPO Centric to bounce ideas off other nonprofit leaders and seek recommendations for contractors who can accomplish exactly what you need!

NPO Centric’s online membership program focuses on content and advice for nonprofit professionals looking to make their organizations more successful, equitable, and sustainable. Join us today! >