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SHARED SERVICES: A GUIDE TO CREATING COLLABORATIVE SOLUTIONS FOR NONPROFITS

SHARED SERVICES: A GUIDE TO CREATING COLLABORATIVE

SOLUTIONS FOR NONPROFITS

Authors

Jackie Cefola, Third Sector New England

China Brotsky, Tides

Roxanne Hanson, The NonprofitCenters Network

Research and Production

Tuan Ngo, The NonprofitCenters Network

This guide was produced

with generous contributions from

The San Francisco Foundation

Pierre and Pamela Omidyar Fund at Silicon Valley Community Foundation

P.O. Box 29195 • San Francisco, CA 94129 • 415.561.6365

www.nonprofitcenters.org

About this Guide

This guide was developed by The NonprofitCenters Network to help organizations

create successful shared services programs. The NonprofitCenters Network publishes guides, studies,

and reports based on best practices gathered from an international community

of nonprofit center leaders and shared services providers.

We also provide consulting on creating shared spaces and services.

To find more information, articles, and sample documents, please visit our

Resource Center at www.nonprofitcenters.org/shared-services-guide.

About The NonprofitCenters Network

The NonprofitCenters Network, a program of Tides, is a community of leaders and professionals

from the nonprofit, philanthropic, financial, real estate, and public sectors.

We offer training, consulting, educational resources, and connections to help you

create and operate nonprofit shared facilities and services.

Our mission is to increase the capacity and effectiveness of the nonprofit sector by supporting

the development and ongoing operations of multi-tenant nonprofit centers

and other quality nonprofit workspaces. Our vision is a future when every nonprofit organization

has access to the workspace it needs to support and sustain healthy, vibrant communities.

About Tides

Tides believes healthy societies rely on respect for human rights, the vitality of communities,

and celebration of diversity. From donor-advised funds to fiscal sponsorship, from green nonprofit centers

to programmatic consulting, from grants management to risk management and more,

Tides gives you the freedom to focus on the change you want to see.

For more information visit www.tides.org.

©2010 The NonprofitCenters Network and Tides. All rights reserved.

http://www.nonprofitcenters.org/shared-services-guide

http://www.tides.org

CONTENTS 6 Author’s Introduction

7 How to Use this Guide

PART 1: SHARED SERVICES OVERVIEW9 What are Shared Services?

The Need for Nonprofit Shared Services

Shared Services by Sector

11 What Benefits do Shared Services Offer?

Purchasing Power

Efficiency

Employee Retention

Quality Resources

Collaboration and Innovation

Stability and Investment

13 What Services can be Shared?

Shared Physical Resources

Shared Staffing

Shared Programs

PART 2: PLANNING CONSIDERATIONS19 How to Get Started

20 Who Provides Shared Services?

Mission Fit

Capacity

Resources

21 How are Shared Services Structured?

Independent Provider

Joint Venture

Fiscal Sponsorship

Networked Services

Shared Governance Models

Shared Services and Mergers

Choosing the Right Structure

25 Who Will Use Shared Services?

Market Assessment

27 How are Shared Services Funded?

Are Shared Services Profitable?

29 How are Shared Services Managed and Staffed?

Staff Roles

31 How are Costs and Benefits Allocated?

Four Allocation Models

The NonprofitCenters Network www.nonprofitcenters.org ©2010 The NonprofitCenters Network and Tides. 4

CONTENTS PART 3: PLANNING TOOLS34 How to Create a Shared Services Plan

Shared Services Planning

Financial Projections

36 What Communication Skills are Necessary?

Shared Services Agreements

Confidentiality and Privacy

Marketing

Communications and Feedback

Branding

38 Conclusion

PART 4: CASE STUDIES41 Al Sigl Business Center

42 Centre for Social Innovation

43 Children & Family Services Center

44 The Foraker Group

45 GroundWork group

46 Nonprofit Enterprise at Work (NEW) npServ™ Program

47 Public Health Foundation Enterprises

48 Third Sector New England’s Fiscal Sponsorship Program

49 Tides, Inc.

50 United Community Services Co-op

PART 5: APPENDICES52 The NonprofitCenters Network: Shared Services Options

54 Merage Foundation: Staffing Shared Services

Alliance Central Office Staff Roles and Responsibilities

55 Merage Foundation: Governance Structure

For the Children’s Home Child Care Center Network

Merage Foundation: Family Home-Based Day Care

57 • Schedule of Projected Operating Revenues, Expenses and Start-up Costs – Cash Basis

58 • Summary of Significant Projection Assumptions and Accounting Policies

61 Centre for Social Innovation: Standard Sub-Lease to Tenants

64 2008 Letter of Agreement Between Tides, Inc. and Partner Organization

66 Appendix A – Tides Shared Cost Model

67 Appendix B – Service List

68 United Community Services Co-op: Application for Membership and

Subscription of Shares

69 Children and Family Services Center: Services Agreement

78 References

79 About the Authors

80 Become a Member


AUTHOR’S INTRODUCTIONDear Readers,

You are holding in your hand the first comprehensive guide for nonprofit leaders looking to create shared services

programs. The topics and case studies explored in this guide are based on interviews with executives of shared services

programs and knowledge we gathered through field research across the United States and Canada. Shared services and

programs are a major example of the nonprofit sector’s current focus on innovation, including how to collaborate in

new ways and how to operate more efficiently.

For 20 years I’ve had the good fortune to work with Tides as we’ve become a vital resource for the nonprofit social change

sector through our grantmaking, nonprofit management, and nonprofit spaces programs. Over the years, we have found

that efficient infrastructure is a critical part of facilitating social innovation and making the world a better place.

Drawing together resources, ideas, and energy of people across the nonprofit world, collaborative workspace and

services offer nonprofits greater financial stability through cost-saving. Experiences in the private, public, and nonprofit

sectors prove these gains are possible when shared services are designed effectively. Shared services reduce redundancy,

increase synergy, promote idea sharing and funding resources, and offer nonprofits a way to thrive in changing and

uncertain markets. In a time when funders are demanding effectiveness, solid organizational infrastructure is critically

important. This guide will help you leverage and share expertise across organizations in an efficient manner.

Tides and The NonprofitCenters Network are committed to building a community of shared services providers who can

enrich the field through peer networking and research. I encourage you to visit The NonprofitCenters Network website

at www.nonprofitcenters.org/shared-services-guide to find

more resources, sample documents, and case studies. We are

also available for consulting to nonprofit leaders embarking

on this process.

Many people were involved in putting together this publication.

I want to thank the nonprofit leaders who generously shared their

experiences and lessons learned. These dedicated changemakers

have highlighted both their successes and mistakes for the

benefit of the entire nonprofit sector. I also want to thank

The NonprofitCenters Network community, a group of people

that is leading the movement on shared spaces and services.

Their ingenuity and fortitude in forging a new collaborative

landscape is furthering the strength of our sector. Lastly, this

publication would not have been possible without the generous

support of our funders.

Warm wishes,

China Brotsky

Senior Vice President, Tides

Executive Director, The NonprofitCenters Network

We wish to thank the following people who

helped us with review of the guide, research,

production, and for providing valuable

information for this guide:

• Tim Beachy, United Community Services Co-op

• Mark Bertler, Public Health Foundation Enterprises

• Peggy Egan, Children & Family Services Center

• Neel Hajra, Nonprofit Enterprise at Work

• John Hrusovsky, GroundWork group

• Barbara Jiang, Independent Consultant

• Diane Kaplan Vinokur, University of Michigan

• Deborah Linnell, Third Sector New England

• Eli Malinsky, Centre for Social Innovation

• Dennis McMillian, The Foraker Group

• Daniel Meyers, Al Sigl Business Services

• John Powers, The Alliance Center

• Daniel Saat , Tides, Inc.

• Kay Snowden, Third Sector New England

• Jonathan Spack, Third Sector New England

• Kuleana Design



This guide is developed for nonprofit center leaders

looking to extend shared services to their tenants and

for nonprofit executives seeking innovative ways to do

more with less.

While qualitative as well as quantitative data demonstrate

that nonprofit organizations benefit from shared services,

this is the first comprehensive guide for nonprofits looking

to create shared services. This guide provides step-by-step

guidelines for you to follow to build your own successful

shared services program. It includes best practices,

models, and case studies.

The writers of this guide realize that shared services

programs come in different sizes, from three organizations

sharing a copier to new ventures aimed at serving

multiple organizations. We encourage you to apply

information from this guide appropriate to the size and

level of complexity, realizing that not everything here

will apply to all programs.

Information provided in this guide does not take the place

of legal or financial counsel. Different local regulations

and policies impact different shared services offerings.

An attorney and an accountant should be consulted

when planning any large-scale shared services program.

It is often easier for organizations to share certain

resources, such as staff or equipment, when they come

together in one location. However, shared services do not

require organizations to co-locate. Organizations have

successfully shared infrastructure, staff, and programs in

dispersed locations. To explore the range of opportunities,

this guide includes successful shared services programs

created both inside and outside nonprofit centers.

Creating a multi-tenant nonprofit center involves a

complex set of legal and real estate considerations that

are not covered in this guide. If you are interested in

developing a new nonprofit center, please contact

The NonprofitCenters Network or visit

www.nonprofitcenters.org.

Definition of Shared Services: Physical resources, staff, and programs which are

governed and allocated across traditional

organizational boundaries.

Nonprofit organizations are increasingly

collaborating to develop shared services.

HOW TO USE THIS GUIDE

Nonprofit organizations face challenging times. Volatile financial markets are impacting funding opportunities,

while demand for services as well as operating expenses are increasing. For the majority of nonprofit

organizations with already limited resources, these challenges indicate a need for a new paradigm.


> For updates on shared services, case studies, and sample documents, please visit

www.nonprofitcenters.org/shared-services-guide.


http://www.nonprofitcenters.org

PART 1: SHARED SERVICES OVERVIEW

n What are Shared Services?



n What Benefits do Shared Services Offer?

Purchasing Power

Efficiency

Employee Retention

Quality Resources

Collaboration and Innovations


n What Services can be Shared?


Shared Staffing

Shared Programs


New economic challenges are fueling the growth of

shared services among today’s nonprofit organizations.

The United States is home to almost 1.5 million registered

nonprofit organizations, over 80% of which report annual

revenue and assets below $100,000 (National Center

for Charitable Statistics 2008). Small budgets limit the

ability of these organizations to access the standard

administrative resources they need to help them succeed.

The current economic crisis is increasing demand for

social services provided by nonprofit organizations.

At the same time, economic volatility is leading funders

to conserve resources and re-evaluate funding priorities,

while day-to-day operating expenses are increasing

even when revenues do not.

A survey conducted by Nonprofit Finance Fund reported

that approximately 73% of nonprofits nationally saw

increased demand for their services in 2008 and the

majority (76%) anticipated a significant increase in the

need for services in 2009 (Nonprofit Finance Fund, 2009).

But while demands for services are up, increases in

operating costs are negatively impacting organizations’

ability to stay in business and serve their clients. For

example, between 2009 and 2010, health insurance

premiums nationally are anticipated to rise between

10 to 11%. At the start of 2009, 14% of nonprofits

nationally had no cash, including any reserves, that is

readily available; 17% had enough to cover one month of

expenses; and 19% had enough cash to cover more than

six months of expenses (Nonprofit Finance Fund, 2009).

For the majority of nonprofit organizations with already

limited resources, the challenges outlined above will

require fundamental structural changes. For some, the

solution is sharing services.

Most nonprofit organizations have a traditional

organizational model with their own core operations

such as purchasing, public relations, human resources,

IT support, equipment, and workspace. The current

economic crisis is leading nonprofit organizations to

look for new, cost-effective structures.

Shared services offer a long-term solution by allocating

much-needed resources across traditional organizational

boundaries. Shared services increase purchasing power

and reduce costs, increase operating efficiency and reduce

risk, improve access to high-quality services, and foster

the collaborations that lead to program innovation.

Experiences in the private, public, and nonprofit sectors

prove these gains are possible when shared services are

designed effectively.

WHAT ARE SHARED SERVICES?

Multiple organizations, or multiple programs within a larger organization, establish shared services

to collaboratively and more efficiently make use of physical spaces, equipment, staff, and program

resources. We define shared services broadly as the collaborative use of resources across traditional




Private Sector

The trend to develop shared services originated in the

private sector in the late 1980s as a response to changes in

the economic climate. Businesses aggressively outsourced

overhead functions to reduce costs. New technology

solutions and customized production techniques

increased the need for coordination along the supply

chain. Increased competition in global markets furthered

the need for organizational partnerships and strategic

alliances (Cooke, 2002).

By 2002, approximately 80% of Fortune 100 companies

had implemented some form of shared services (Cooke,

2002). Between 2001 and 2003 an estimated 20,000

strategic alliances were formed in the private sector, with

the number of businesses forming alliances growing at

25% each year since 1987 (Zineldin & Bredenlöw, 2003).

Corporate executives continue to implement shared

services today because of the benefits they generate.

A majority of executives surveyed report that the

benefits achieved from shared services in the private

sector include:

n Reduced costs

n Performance improvement

n Increased productivity

n Better functional technology

n Increased collaboration and teamwork

Executives further claim that by implementing shared

services, costs were reduced an average of 14%. Most

also thought shared services improved their employee

recruitment and retention efforts (AT Kearny, 2004).

Public Sector

A 2005 survey indicated that, internationally, 66% of the

senior government executives asked were already

engaged in or developing shared services. Most executives

also described shared services as very important to

meeting current business challenges (Accenture, 2005).

Nonprofit Sector

Collaboration is a long-standing strategy in the nonprofit

sector, in part, fostered by funders. However, very little

quantitative information is available about the number

of successful shared services programs currently

operating in the nonprofit sector, though one study

reported that 65% of nonprofit organizations with

budgets under $1 million engage in cross-organizational

alliances (Kohm, La Piana, & Gowdy 2000).

While sector-wide research is scarce, numerous studies

provide information about shared services strategic

restructuring, strategic alliances, mergers, and other

strategies used by nonprofit organizations (Kohm,

La Piana, Gowdy, and McCambridge are just a few

sources in this large field of study).

Other sources describe shared services models employed

within a variety of specific fields, such as early childhood

education, (the Merage Foundation) (Stoney, 2009),

anti-poverty through asset ownership (McCulloch

& Woo, 2008), and health care access (Crooks, Spatz, K.J.,

& Warman, 1997; Ginsburg, 2008; Wellever, 2001).


Purchasing Power

By purchasing services collectively, organizations can take

advantage of bulk purchasing discounts and economies

of scale. This helps organizations build their purchasing

power by lowering per unit prices and generating new

savings typically available only to large institutions.

Efficiency

Shared services reduce the duplication of functions and

infrastructure across nonprofit organizations. Through

shared services, organizations decrease the expense of

redundant services and increase investment in program-

related activities to fulfill their missions. Shared services

can also standardize processes across organizations,

leading to faster service.

Employee Retention

Nonprofit staff are often forced to fill a variety of roles.

Shared services can offer the opportunity for both skilled

technical staff and program staff to focus on their core

competencies, creating higher job satisfaction. With staff

resources focused on their specialties, organizations can

realize better quality control and reduce their overall risk.

Centre for Social Innovation: Affordable Community The Centre for Social Innovation (CSI) in Toronto

offers shared facilities and services for 170

member organizations. Organizations pay an

affordable base rent for workspace, plus an

amenities fee to cover shared services. The

financial savings are important, but only part of

the value, as the center also creates important

opportunities for social networking and

collaboration.

More information about the Centre for

Social Innovation is in Part 4: Case Studies.

WHAT BENEFITS DO SHARED SERVICES OFFER?

“ The most important thing that tenancy at CSI has done for my organization’s ability to achieve

its mission is to [give us] access to a healthy, inspirational environment where our own ideas

can be tempered against like-minded people, groups, and organizations,

greatly increasing access to a talent-pool of social capital, and thus significantly

improving our overall organizational development.” Tenant | Centre of Social Innovation, Toronto


Quality Resources

Shared services allow nonprofit organizations to access

specialized expertise, improved services, and new

technologies that could otherwise be unaffordable

or unavailable.

Often agencies have differing levels of sophistication

and/or capacity. Generally shared services provide the

opportunity for all agencies to rise to the highest level

of service, utilizing best practices. This situation leads to

an increased capacity for agencies currently operating at

a lesser level of service. An example of this would be an

agency that used dial-up access for Internet suddenly

having access to T1 services.

Collaboration and Innovation

Shared services are founded by organizations that want

to work together to better serve their communities.

Successful collaboration can generate cross-organizational

learning, improve service coordination, and broaden

constituent access to community agencies. Shared

services organizations can go a step further to facilitate

innovative programs that cut across traditional



When mission-based nonprofit organizations create

shared services programs, they are creating long-term

systems to keep the associated resources, expertise, and

financial exchange in the nonprofit sector. Shared services

can also provide built-in back up, reducing the risk of

losing institutional knowledge and practice when an

individual staff person leaves, and creating overlapping

service teams.

MACC CommonWealth, LLC: Minimized Risk MACC CommonWealth was founded in 2007

to provide shared administrative and program

services to leading human service providers

in Minneapolis/St. Paul. MACC CommonWealth

currently serves ten member organizations with

shared human resources, information technology,

and financial services. Among the many benefits,

shared services have reduced risk for all

participating organizations. Instead of relying

on individual employees or service providers,

member organizations access a larger shared

services team. This improves the standardization

of services and at the same time reduces the

risk of fraud.

For more information about MACC

CommonWealth, visit www.mcwmn.org.

npServ™: Enhanced Services NEW in Ann Arbor, Michigan, offers shared

information technology services with the npServ

system. Through npServ, nonprofit organizations

utilize a centralized server, Linux software, email,

and data management systems that are managed

by a team of information technology experts.

Participating organizations reduce investment

in hardware and software while gaining access to

high-quality maintenance and security systems.

npServ also provides affordable, on-call,

technology support.

More information about NEW’s npServ program

is in Part 4: Case Studies.


“It is comforting and supportive to be

in the company of organizations that

share our goals of making a difference.” Kate Sipples | South Africa Partners, tenant of

Third Sector New England’s Nonprofit Center

http://www.mcwmn.org

Virtually any resource that does not uniquely fulfill an

organization’s mission has the potential to be shared.

But every shared services provider does not have to offer

possible resources to its partners. Setting the scope

of services and associated performance goals are very

important steps in shared services planning.

This guide includes a comprehensive list of shared

services options. (See “How are Shared Services

Structured” section for more information.)

Shared services can be categorized into three main

groups: shared physical resources, shared staffing,

and shared programs.


Sharing physical resources creates savings by

reducing the time rooms or equipment are idle,

dividing up fixed costs among several users and

taking advantage of bulk purchase discounts.

Commonly shared physical resources include:

n Workspaces, libraries, kitchens, conference rooms,

technology centers, cafés

n Performance areas, galleries, theaters, auditoriums

n Busses, transportation systems

n Copiers, printers, fax machines, postage meters

n IT, hardware, software, online applications,

infrastructure like wiring and server rooms

n Communications systems, telephone,

video conferencing, LCD projectors

WHAT SERVICES CAN BE SHARED?

OPPORTUNITIES

nEasily valued, divided, and monitored

nCan be consistently available across a wide variety

of organizations

nCan maximize space and equipment use

nDistribute fixed capital expenses associated

with physical resources

nReduce staff time spent purchasing,

maintaining, and managing physical resources

nCan provide higher-quality workspace,

equipment, and other resources

nTake advantage of bulk purchasing discounts

nConsolidate insurance

CHALLENGES

nCan require large initial investment

nRequire appropriate features and amenities

to be pre-determined

nProvide limited short-term flexibility

nNeed systems to manage requests and mitigate

conflicting priorities

nRequire time and systems to administer and

share/apportion costs

nLiability may need to be mitigated and insurance

may need to be obtained

Nonprofit CentersNonprofit organizations that co-locate their

workspaces in a multi-tenant nonprofit center

have a unique opportunity to leverage their shared

spaces to facilitate shared services. Hundreds of

nonprofit centers are organizing and operating in

North America and around the world, each with

a distinct offering of shared physical resources,

staff, and programs.

For more information about nonprofit centers,

visit www.nonprofitcenters.org.

Opportunities and Challenges of Shared Physical Resources


http://www.nonprofitcenters.org

Physical resources are typically easy to value, divide,

monitor, and therefore, share. Participating organizations

generally pay a rental or usage fee for these types

of resources. They do not necessarily require a high level

of trust among participating organizations. Nonprofit

organizations often start by sharing these types of

resources, sometimes informally.

Physical resources can require large upfront investments

and early decisions about preferred features or amenities.

Once purchased, there is less flexibility to change a

physical resource to suit an organization’s needs. For

example, organizations that jointly lease a copier should

decide in advance if they need color, duplex printing,

binding, and other special functions. These features

cannot easily be added once the copier is rented.

It could take several months to several years to upgrade

or change physical resources to meet new demands.

Shared Staffing

Virtually all operations and support staff have the

potential to be shared because these functions typically

are not unique to an organization’s mission or programs.

Shared staffing structures can include permanent and

temporary employees, consultants, contractors, interns,

and volunteers. Commonly shared staff functions include:

n Administration, reception, clerical, and

purchasing services

n Facilities management, property management,

janitorial staff, security

n Financial management, accounting, reporting,

risk management

n Human resources, recruiting, hiring, training,

professional development, payroll, volunteer

management

n Information technology services, help desk, network

support, website design and maintenance

OPPORTUNITIES

nEnable staff to focus on mission-related activities

to improve services for community

nReduce risk by accessing broader shared staff

and applying standardized processes

nKeep qualified, experienced staff in the

nonprofit sector

nIncrease access to specialized expertise

nImprove staff recruitment and retention by

allowing staff to focus on their core competencies

nReduce staffing costs

CHALLENGES

nEnsure shared staff have time, capacity, and desire

to serve multiple organizations

nFind qualified staff to support the needs of

organizations with different missions and programs

and work styles

nMove from existing staff to shared staff

nMaintaining confidentiality

nRequire time and systems to administer and

share/apportion costs

nManaging competing priorities

Opportunities and Challenges of Shared Staffing


Shared staff can do work more closely tied to

mission and program-related activities. These

functions include:

n Organizational governance, board relations

n Fundraising, direct mail, grant writing

n Advocacy

n Communications, marketing, public relations

n Specialized programmatic expertise

n Data management

Underlying all shared staffing efforts is the intention to

match work with staff skill sets. These shared efforts free

up leadership and program staff to focus on their mission-

related activities, increases operating efficiency, and

potentially reduces costs. Shared staffing also reduces risk

with organizations accessing more standardized services.

Organizations use shared staffing to access a broader

range of expertise and specialized skills. Regardless of

the position, shared staff must have the capacity, ability,

and desire to work for more than one organization

across missions and programs.

Nonprofit organizations have long taken advantage of

external consultants or vendors to provide professional

services, such as accounting, grant writing, facilities

management, and computer support. There are even

commercial service providers whose businesses focus

primarily on working with the nonprofit sector.

In many ways, shared staffing among nonprofit

organizations is similar to this familiar outsourcing

strategy. However, shared staffing can re-allocate existing

personnel to provide support to multiple organizations,

while keeping a qualified staff person in the nonprofit

sector. This allows the expertise, experience, and

associated financial exchange to remain managed

and owned by mission-based organizations.

Shared Staffing at Public Health Foundation Enterprises Founded in 1968, California-based Public Health

Foundation Enterprises (PHFE) is the largest public

health nonprofit organization in the United States.

PHFE enables clients to focus on mission-related

activities rather than overhead functions. PFHE’s

comprehensive offering of shared services

includes: financial services, human resources

including staffing, contract and grant management,

project management, systems analysis and design,

quality assurance, and administrative support.

More information about Public Health

Foundation Enterprises is in Part 4: Case Studies.


Shared Programs

Nonprofit organizations have been providing

collaborative programs and community events for many

years. From complementary client services to educational

community workshops to advocacy campaigns, many

nonprofit organizations are collaborating on mission-

related activities. Over the last decade, organizations are

encouraged by the funding community to think and

work creatively with each other. Examples of shared

programs include:

n Client intake, related service provision, referrals

n Emergency disaster response

n Curriculum research, development, and delivery

n Community events

n Local and national advocacy campaigns

Shared programs can create long-term value through

program innovation and evolution. Organizations working

together can learn from each other and find new ways to

leverage their individual resources to meet the needs of

their community together. Such changes lead to more

effective programs and better service for constituents.

Ultimately, the best shared community services reduce

redundant efforts, help clients meet multiple needs in one

place, and increase the participating organizations’ impact.

At the same time, larger scale shared programs can require

time-intensive staff coordination and resources that

are not always adequately planned for in advance by the

participating organizations or their funders. Some

organizations worry that shared programming will either

take away from their core work or blur their organizations’

identities, confusing funders and constituents.

Clear service agreements and ongoing constituent

communications help to address these concerns, and can

lead to greater community support.

OPPORTUNITIES

nCan lead to service innovations

nIncrease service reach and visibility

among constituents

nCan reduce redundant efforts and increase

organizational efficiency

nEnhance service for clients who need to access

multiple organizations

nEnhanced program quality

CHALLENGES

nAllowing sufficient time and resources for program

development and implementation

nRequires a high-level of trust and commitment

among participating organizations

nEnsuring community visibility and shared credit for

all participating organizations

Opportunities and Challenges of Shared Programs

Collaboration Database for Shared Services Started by the Lodestar Foundation, the Nonprofit

Collaboration Database provides real-life

examples and models of nonprofit organizations

working together. Through the database, one can

explore different types of collaboration models,

difficulties faced when forming a collaboration,

ways challenges were overcome, metrics for

measuring outcomes, and much more. For more

information, visit www.thecollaborationprize.org.


http://www.thecollaborationprize.org

Shared Programming at the Children & Family Services Center The Children & Family Services Center (CFSC) in

Charlotte, NC serves nine nonprofit organizations

that provide direct services to local constituents.

As a key shared program, organizations are

developing a shared client intake form to facilitate

client service across organizations located in

the center. By using a shared client intake form,

organizations benefit from receiving standardized

information about new clients–whether the client

comes to the organization directly or is referred

through a partner. This saves time and increases

the quality of experience for both the client

and practitioner.

More information about the Children & Family

Services Center is in Part 4: Case Studies.

“ Becoming a part of the Children & Family

Services Center is one of our most

significant strategic decisions.

CFSC efficiently and effectively deals

with all the day-to-day details that previously

bogged down our most important work...

that of serving our clients.

Through collaboration, we get better services

at a reduced cost. It is a win/win!”

Jen Algire | Executive Director

Community Health Services,

tenant of CFSC


PART 2: PLANNING CONSIDERATIONS

n How to Get Started

n Who Provides Shared Services?

Mission Fit

Capacity

Resources

n How are Shared Services Structured?


Joint Venture

Fiscal Sponsorship

Networked Services

Shared Services and Mergers


n Who Will Use Shared Services?

Market Assessment

n How are Shared Services Funded?


n How are Shared Services Managed

and Staffed?

Staff Roles

n How are Costs and Benefits Allocated?

Four Allocation Models

Shared services programs often evolve over time,

beginning as more limited projects. When trust and

capacity grow, the scope of shared services expands to

address more complicated staffing functions and

programs. If a new shared services program is missing

one of the above components, this may not be the

right time to offer it.

Implementing a large shared services program can

sometimes require big organizational change. It requires

intensive planning efforts and considerable buy-in

from different stakeholders. Additionally, there are

many trade-offs that parties involved must consider

around control of accountability for services being

provided. Clients have to be comfortable outsourcing

the work. Significant investments are also required

along with complicated financing and allocations.

However, organizations can choose to share non-core

activities, such as equipment and space. These are

often less threatening to the organizations involved.

The benefits include a simpler management structure,

easier financing, and the ability for organizations to

enter and participate as they like.

HOW TO GET STARTED

If you are ready to launch an ambitious shared services program, the following table summarizes a planning

process for determining which shared services models are appropriate for your organization.

Theleveloftrustrequiredbytheparticipatingorganizationinsharingservices

andprogramsvariesdependingonthesizeandnatureofthesharedservices.

Sharingequipmentandspacerequireslowertrustlevelthansharingstaff.

Short-Term Programs

Equipment Space StaffOngoing Programs

Fiscal Sponsors

LOW HIGH

Mission Fit The scope and goals of the shared services support the mission and programs

of the provider

Organizational The provider has space, equipment, staff, time, money, and other resources available

Capacity to develop and operate the proposed shared services

Scope of Services The provider has the expertise needed to provide high-quality services to other

organizations in this proposed service field. Consider the scope of your services:

nShared physical resources

nShared staff

nShared programs

Market Demand Participating organizations have recognized a need for the proposed shared services

Competitive The provider can offer a competitive advantage to participating organizations over

Advantage other providers in price, service delivery, timeliness, availability, and quality

TRUST


Shared services can be provided by both for-profit and

nonprofit organizations. Organizations looking to create

a shared services program can operate it by creating a

commercial business, nonprofit organization, or a social

enterprise. Although this guide is primarily aimed at

nonprofit organizations and enterprises, the principles

outlined here are valid for all programs.

Anyone developing a shared services program should

undertake a thorough planning process that includes

an honest assessment of internal capacity and

external interest. Successful programs determine an

appropriate scope and goals by balancing their mission,

capacity, resource availability, and market demand.

Mission Fit

Nonprofits are mission-based organizations that exist

to address a social need. Some shared services are

developed by organizations in response to constituent

requests. Others are funder-driven or result from existing

collaborations with program partners. Regardless of the

initial motivation, a successful shared services program

will support the mission of your organization. Program

goals should identify the specific operational or

programmatic benefits to your organization, partners,

and community.

If a proposed shared service does not match your

organization’s existing mission, consider creating a

new or supporting organization with a mission that is

compatible with the new services. When an organization

decides to provide a service that does not fit its exempt

purpose, it can potentially create competing priorities,

staffing, and unrelated business income tax.

Capacity

Similar to any other programmatic effort, shared services

require a mix of leadership, personnel, space, equipment,

materials, and money. Shared services providers must be

able to dedicate resources to these new services by

re-allocating existing staff and infrastructure or hiring

new staff. Providers must also be prepared to purchase

the needed support systems. New shared services

providers will need to honestly assess the start-up

capital and operating funds they need in order to

ensure adequate capacity for these new programs.

Shared services providers must also be prepared to invest

resources and time to build relationships and trust among

participating organizations. Like commercial service

providers, potential clients will examine the quality of

your services, your reputation in the community, and your

customer service skills.

Resources

Shared services programs require both start-up

investment and ongoing revenue. See “How Are Shared

Services Funded” section for more information.

WHO PROVIDES SHARED SERVICES?


The structure for any shared service is customized

to suit the mission, capacity, and operations of

participating nonprofit organizations. Different

relationships and structures are used to develop

shared services.

Academics and practitioners describe many different

types of collaborative structures (see Kohm, La Piana,

McCambridge, Zyzis). There are four common structures:

n Independent provider

n Joint venture

n Fiscal sponsorship

n Networked support


In this structure an independent nonprofit organization

provides shared services to independent client

organizations. Both the shared services provider and

the clients maintain their own board of directors.

Typically, the shared services are provided through

a service agreement or contract. In a nonprofit center,

the service agreement may be included in or written

as an addendum to a lease agreement.

This model offers the most flexibility for the shared services

provider to work with a wide variety of clients, from large

to small, regardless of their mission. This structure enables

all participating organizations to maintain their own legal

status, and offers clients the most flexibility in choosing

which services to purchase and use. Because this structure

can be similar to a familiar vendor-client relationship, it

can work well for an organization that will be marketing

to clients who may be new to shared services.

Joint Venture

The joint venture structure is used to provide shared

services to participating organizations who are involved

in the governance of the shared services program.

This can take the form of a supporting organization,

cooperative, or even a program housed within an existing

organization. The joint venture’s mission supports the

missions of participating organizations. The joint

venture’s services are developed under the direction

of the participating organizations to suit their missions

and needs.

Supporting organizations can be useful in large-scale joint

ventures when shared services require significant plan-

ning, investment, and ongoing coordination or need an

independent legal structure due to funding requirements.

When the joint venture is just the simple sharing of a

piece of equipment or conference room, documenting

the agreement among the parties is still important.

A simple letter of agreement is often sufficient.

Fiscal Sponsorship

A fiscal sponsor provides a legal structure and fiduciary

responsibility for groups or organizations that do not

have their own tax-exempt status. Applying for tax

exemption and ongoing administrative responsibilities

require a significant investment in legal, financial, and

accounting expertise that can be overwhelming for

smaller or new organizations. Through fiscal sponsorship,

organizations contract with a sponsoring organization

to become part of the sponsor’s legal structure under

their tax-exempt status. Full-service fiscal sponsorship

also provides sponsored groups with shared governance,

financial services, risk management, and human

resources services.

HOW ARE SHARED SERVICES STRUCTURED?

The Strategic Solutions Initiative From 1998-2003, expert strategist David La Piana

and his team of associates completed extensive

research, analysis, case study documentation, and

communication to support over 5,000 nonprofit

leaders engaging in or considering strategic

restructuring. La Piana’s “Strategic Solutions

Partnership Matrix” includes partnership models for

administrative consolidation, joint programming,

management service organizations, joint ventures,

and parent-subsidiary structures. These partnerships

involve a change in control for at least a portion

of one or more of the organizations involved.

Extensive information about the Strategic Solutions

project and other studies of strategic restructuring

and partnership in the nonprofit sector is available

at www.lapiana.org.


http://www.lapiana.org

Fiscal sponsorship frees up sponsored groups to focus on

their program activities, while relying on the operational

expertise of the fiscal sponsor.

Fiscal sponsorship requires mission alignment between

sponsored organizations and the fiscal sponsor. The

mission of the fiscal sponsor determines which programs

and activities will be eligible to participate in their fiscal

sponsorship services. The fiscal sponsor’s board of

directors takes fiscal responsibility for all sponsored

projects, but each group maintains an advisory board

to guide its programmatic goals.

Examples of Fiscal Sponsorship Providers

Third Sector New EnglandThird Sector New England (TSNE) builds the capacity of progressive social change organizations. As one of its

core programs, TSNE offers projects based in New England and New York access to finance, accounting, human

resources, and information systems services through fiscal sponsorship.

Fiscal sponsorship clients are organizations that for varying reasons do not have independent 501(c)(3) tax

status. Instead, they utilize TSNE as a sponsor and become affiliated organizations. Clients are able to then focus

more on core competencies related to their mission and programs, rather than administration and overhead.

More information about TSNE’s Fiscal Sponsorship Program is in Part 4: Case Studies.

TidesTides is the largest full-service fiscal sponsor in the United States. As of this writing, over 200 sponsored

projects work under Tides’ tax-exempt status and legal structure, operating both domestically and globally.

Tides also provides these projects with comprehensive financial, risk management, and human resource

services. In addition, Tides hosts the National Network of Fiscal Sponsors. See the Network’s web page at

www.tidescenter.org/fiscal-sponsorship/nnfs/ for more information on the field of fiscal sponsorship.

Cooperative Shared Services with United Community Services Co-op The United Community Services Co-op in

Vancouver, BC was founded in 1998 to provide

supportive shared services to a collective of

nonprofit organizations.

Shared services in this joint venture include:

bulk purchasing at discounted rates for office

equipment and supplies, IT services, human

resources assistance, strategy consulting, and

executive coaching. Nonprofit organizations that

wish to access these and other shared services

purchase and own shares in the cooperative valued

at $50 per share. In owning shares, each member

organization has an ownership stake in the

cooperative, and with it the responsibility to

participate in organizational governance

and development.

More information about the United Community

Services Co-op is in Part 4: Case Studies.

“The Co-op not only saves us money, but it

also provides us with resources, space, and

opportunities to think creatively and test

innovative ideas around how we do our business.

It empowers our organization to focus on our

mission and programs as effectively as possible.” Tim Agg | Executive Director, PLEA Community

Services Society, member of

United Community Services Co-op


http://www.tidescenter.org/fiscal-sponsorship/nnfs/

Networked Services

Networked services provide the opportunity for large,

multifaceted organizations to consolidate operations

for various legal entities or businesses. This structure for

shared services is often seen among the largest nonprofit

organizations including those in academia, the arts,

advocacy, and service provision. Networked shared

services are typically offered to subsidiaries, regional

offices, state or local chapters, supporting organizations,

or franchises.

Networked services allow organizations with a single

“brand” to unify their service standards and reduce

overhead costs. At the same time, networked shared

services increase access to expertise and build

purchasing power for participating affiliates.

See Tides, Inc. case study as an example.

Shared Governance Models

In fiscal sponsorship and networked services models,

the board of the provider governs the sponsored projects

or affiliated organizations. While client organizations

often retain advisory committees for their program

work, the provider’s board takes legal and fiduciary

responsibility for the client organizations.

Independent organizations are also experimenting

with shared governance by choosing some or all of

the same board members. These overlapping members

ensure consistency and effective communication

among organizations serving similar constituents. Shared Services and Mergers

Shared services do not necessitate a change in an

organization’s programs, mission, or operations. In fact,

shared services can be a viable alternative to what has

become an increasing chorus of calls from funders for

organizational mergers. By leveraging resources across

organizations, shared services allow nonprofits to gain

efficiency and increase impact while maintaining

organizational independence.

Tides Networked Shared Services Benchmarking StudyIn 2009, Tides conducted a cross-industry study

of networked shared services models. The study

explored ten organizations that created different

business and organizational models to improve

efficiencies, reduce costs, and create economies

of scale. The study gathered the best practices

from nonprofits, hospitals, universities, and

for-profit organizations. For more information,

visit www.tides.org.


http://www.tides.org


In deciding which structure is best for a particular shared services program, consider the following questions:

n How closely aligned are the missions of the client or participating organizations with your organization’s mission?

n What types of services will you provide?

n How much operational integration will be required?

n How large are the client or participating organizations?

Mission Scope of Operational Client Size

Alignment Services Integration

Independent Not required Any Less integrated Large and/

Provider or small

Joint Not required Any. Ideal for Less integrated Any. Ideal for

Venture shared organizations

programming with similar size

Fiscal Required Any. Ideal for More integrated Ideal for small

Sponsor accounting and to mid-size and

human resources unincorporated

organizations

Networked Most closely Any More integrated Ideal for large

Services aligned – organizations

unified identity


Successful shared services organizations conduct detailed

market research. Understanding the pressing needs and

barriers for the organizations you want to serve will help

you develop a shared services program to meet a demand

in the nonprofit sector.

Start by gathering information about the organizations

that may be using the shared services. Assess the

organizational interest of your target market. Surveys,

interviews, and focus groups are useful tools in your

market research. Your research should answer these

key questions:

n What services do the organizations in this area need?

n Which current services cause them the most pain?

n Where are they vulnerable to costly risks?

n What are the potential barriers to their participation

in a new shared services program?

As an example, some successful shared services providers

have developed to serve early childhood education

organizations. Due to the nature of their work, they

focus on billing, risk management, and professional

development functions across their organizations,

freeing up over-burdened teachers and staff to focus

on the children they serve.

Next, understand who is currently providing the

proposed shared services to your potential clients.

Are the functions being covered by an external service

provider or dedicated staff members, or added on to

someone’s job?

Every shared service has competitors. Who are the

competing suppliers of the technologies or services that

are being replaced? Analyze current providers for their

scope of services, structure, customer base, and pricing

and costing strategies. New shared services must have

an advantage over current providers to ensure success.

The geographic scope of your service area is also

important. For example, the size and density of the

service area can significantly impact initial investment

and ongoing expenses, such as transportation, office

space, and staff time. A location geographically central

to your clients can build your visibility and reduce travel

time for service staff if they need to provide service

onsite. However, services that can be provided remotely

could allow you to rent less expensive office space

in a more remote location.

WHO WILL USE SHARED SERVICES?


Market Assessment

Defining the market for a shared service is challenging.

Market assessment is an iterative process. Realize that

the first iteration is likely not final, for the customer base,

geography, and competition adjust as the shared service

adapts over time.

Customers include all constituents who receive services

from the shared services provider. Each customer, also

called a “participating organization” throughout this guide,

may represent a variety of stakeholders, including board

members, staff, and clients. Understanding the needs and

interests of all relevant stakeholders can help providers

develop appropriate services and marketing messages.

Shared services providers need to understand who are

the current vendors of their potential clients. In order to

effectively meet the needs of your customers, shared

services providers must consider the following key

characteristics:

n Budget and staff size, geographic reach, and issue focus

n Current purchasing habits and vendors

n Preferred cost and benefit allocation structures

Identifying a target market for your shared service will

depend on a variety of factors related to your business

model. Your business model will help identify: a) the

number of participating organizations required; b) the

minimum participation or usage required; c) the

maximum number of organizations served; and, d) the

selection criteria for participants (if necessary).

In defining a customer base, it is important to

acknowledge any existing relationships and address

concerns around conflicts of interest. It is also important

to recognize that legal agreements and financing terms

sometimes govern a participating organization’s eligibility.

For example, Third Sector New England’s Nonprofit Center

offers office space, meeting rooms, shared services, and

programs to progressive change organizations in Boston.

Financing for the center was obtained through the

issuance of a public bond. Per the terms of the bond,

the center must offer the vast majority of services only

to organizations that are registered as 501(c)(3) nonprofit

organizations or those fiscally sponsored by 501(c)(3)

organizations. Corporations, limited liability partnerships,

cooperatives, and sole practitioners are not eligible

to utilize or rent facilities in the center per the terms

of financing.


All shared services require careful financial planning

similar to planning completed for a new business venture,

nonprofit organization, or program. Sufficient access to

funding is essential. Initial funding may be needed for

start-up investments and expenses. Continued revenue is

required for operating the shared service over time.

Shared services rely on diverse funding streams to meet

their financial needs. This section provides general

information about funding sources for shared services.

Earned Income

Shared services programs generate revenue on an

on-going basis to cover operating costs. With simple

equipment sharing, costs may be modest. With shared

staffing for accounting or human resources, operating

costs may be much more. Ideally, earned revenue should

cover the cost of on-going services as well as costs to

buy replacement equipment, market the program, etc.

Some programs that provide subsidized services

decide that earned income will not cover costs.

There are a variety of ways to structure operating revenue.

One model is for clients or participants to pay after use.

This model reduces the need for true-ups, but requires

the provider to submit whatever funds are needed in

advance. Other models require participants make advance

deposits or retainers, which are then adjusted to actual

as the services are provided. More information on how

to allocate costs and set pricing is covered later in

this section.

Shared services also offer benefits to nonprofit providers

that go beyond financial surplus:

n Development of a mission-enhancing service

n More efficient use of resources (resources that may

have previously been underutilized)

n Broader visibility and reach in communities

being served

n Possible program innovation as a result of new

relationships with organizations receiving services

n Possible earned income stream

Start-Up Costs

The costs of setting up a complex shared services

program can be substantial. In addition to whatever

hiring or equipment purchase is needed, the needs

assessment, marketing, and communications programs

can be costly. This section focuses on diverse sources

for this start-up funding, as well as continued operating

subsidy if needed.

Shared services are funded through a variety of

traditional sources, similar to funding for other

programming activities. Funding for shared services

usually starts with organizational sources for other

programs and general administrative support. This

typically includes grants from public and private

institutions, contributions from major donors, and

the collection of membership fees.

Funders are attracted to shared services for different

reasons. Shared services offer a new model for

organizational management, administration, and

programming. They create value for participating

organizations by building economies of scale and

purchasing power, as well as increasing efficiencies

and access to services. Shared services lead to

organizational collaboration, which can lead to

program innovation. They raise the visibility of the

nonprofit sector by providing an example of

organizations working together to develop

innovative solutions. These are powerful incentives

for potential funders.

HOW ARE SHARED SERVICES FUNDED?

Fundraising for Shared Services The Children & Family Services Center in

Charlotte, NC encourages agency staff to self-

organize, not only in finding creative solutions to

collaboration on client services and programs, but

also by participating in planning and funding

shared overhead services.

More information about the Children & Family

Services Center is in Part 4: Case Studies.


When larger funding requirements exist, for example, to

fund the purchase and start-up of a multi-tenant nonprofit

center, organizations often engage in a capital campaign.

If responsibility for the capital campaign is shared across

multiple nonprofit organizations, mutual expectations

must be clearly understood and documented.

Corporate Support

Shared services may generate opportunities for corporate

donors beyond their support for mission. All shared

services create value for a network of participating

organizations. Access to this network may be attractive

for corporate supporters and sponsors.

Debt or Investment Funding

Start-up costs may also be funded through debt

and program-related investments from banks and

foundations. The debt can be paid back by ongoing

fees from participating organizations. The key is

developing a business plan that shows sufficient return

from fees to pay off debt over time. Potential lenders

include major donors, public and private funding

institutions–especially those interested in program-

related investments – and participating organizations

themselves. In exceptional cases, the financial return

may also be attractive to private investors, who then

provide funding in exchange for an equity stake

in the shared service.


Shared services not only create value for participating

organizations, they can also be a social enterprise of the

service provider. Because customers pay for the services

they receive, there is a steady stream of earned income.

Financial profitability is a goal for some shared services

providers. Others seek to break-even or offer subsidized

services to participating organizations. Some programs

anticipate the need for on-going subsidy. Regardless,

all successful shared services programs are built on a

financially sustainable business model. If earned income

is not expected to cover operating costs at the fee levels

the market allows, it is important to identify in advance

what other sources are needed to generate enough

revenue to cover expenses. Sources can include grants,

loans, government contracts, and private investment.

Corporate Support for the GroundWork group Columbus, OH-based GroundWork group provides

shared information technology services to a

network of nearly 150 nonprofit organizations.

GroundWork group’s services are wide-ranging,

including: technology consulting and services,

educational opportunities, and technology

products. Businesses have many opportunities to

support the GroundWork group’s network. Their

staff are encouraged to volunteer as board

members, business partners, and educators to

support organizations in the network. Businesses

also develop technological solutions for the

network including: the Network Documentation

process, the Security Pilot Project, the Office

Supply Discount project, the Overstock Liquidation

process, the Telecomm Pilot Project, the Website

Pilot Project, and the IT In A Box Managed Services

demonstration project. Businesses donate used

equipment to the network and also contribute

direct funding.

More information about the GroundWork

group is in Part 4: Case Studies.

Not All Services Require Start-Up Funding The Alliance for Sustainable Colorado was able to

install Internet service of greater bandwidth and

speed because the Alliance Center’s on-site and

virtual (off-site) tenants could together afford the

cost of the higher quality service. Organizations

pay less collectively and individually than they

would for lower quality service contracted

individually. The Alliance applies a modest

administrative fee to pay for its administrative

costs and everyone benefits. No outside grants

or funding were required.


Governance, management, and staffing are three

components in developing any shared service. All

nonprofit shared services providers are governed by a

board of directors. Board members should include

interested community members who can help the

provider meet its mission. It can, but does not always,

include client representatives. The governing body will

set and review key policies regarding the budget,

financial performance, management, and operations

of the shared service. A board dominated by client

representatives may not be willing to raise service fees

for their own organizations, even if it meets the needs

of the service provider. Community board members

allow the provider to access high level technical/

professional knowledge that can lead to better board

decision-making.

Staff Roles

There are four primary tasks that shared services

providers will need to provide:

Strategy and Management

Managers provide the overall leadership and foster

the shared service from start-up to full operation.

Managers develop the business plan, set policies, and

oversee service delivery and communications.

Marketing and Relationships

A marketing specialist will focus on recruiting new clients

and retaining those clients. This can involve ongoing

communications with existing clients, and mediating any

conflicts that arise among participating organizations.

Service Delivery

Service providers are subject-matter experts, responsible

for supplying the shared physical resources, staff, and

programs to constituents.

Accounting

Billing structures can become somewhat complex.

Someone will need to make sure that participating

organizations are billed on a regular basis, and keep up

with their payments.

It is important to have the right people with the right

capacity and resources to fulfill each function. One person

may fill more than one role, but often the skill sets

required for each function are distinct. Your IT network

service expert may or may not be the right person to

market your services. The service director may not

have time to provide services, recruit new clients, and

handle invoices and billing questions. Regardless of the

structure, all team members are responsible for achieving

the goals of the shared service and adding value for

participating organizations.

In addition to staffing considerations, it is also important

to identify who will manage the shared services staff.

A single administrator can be more focused and develop

specialized competencies related to the shared service.

A single administrator also has more defined authority

and decision-making responsibility.

HOW ARE SHARED SERVICES MANAGED AND STAFFED?

Management and Staffing The Merage Foundation has published a list of

staff roles and responsibilities for a centralized

office providing shared services. Written by Louise

Stoney, an expert in shared services for childcare

providers, this list includes specific areas of

responsibility in the broader roles of leadership,

management, finance and administration,

operations, office support, and accounting.

The list is included as an Appendix to this guide.


It is important to note that an agency providing shared

services has become a service provider, and the agencies

utilizing shared services are now clients or customers. It is

important for the shared services provider to think about

what it means to provide good customer service.

A Service Level Agreement is a useful tool in clarifying

and documenting expectations of what services are in

the scope, clarifying deliverables and the timeliness of

those deliverables.

Staffing and management for shared services can utilize

personnel employed within participating nonprofit

organizations. This model has some challenges. The use

of internal personnel may create competing priorities

and increase staffing responsibilities and liability.

External management and staff may raise costs but

reduce the staffing burden and liability associated with

providing the service.

Tides: A Commitment to Collaborative Solutions Bringing together people, ideas, and resources, Tides actively promotes change toward a healthy and just society

founded on the principles of social justice, broadly shared economic opportunity, a robust democratic process,

and a sustainable environment. To accomplish this wide-reaching vision, Tides has created a unique array of

shared services to work with forward-thinking philanthropists, activists, and institutions.

By offering customized solutions and structures, on an integrated platform, Tides enables its partners to

transform their vision into concrete results and impact. These services include structures and vehicles for

grantmaking, nonprofit management, real estate, and consulting services.

Tides is an independent provider of quality shared workspace, technology, and programs to over 70 tenant

organizations via the Thoreau Centers for Sustainability in San Francisco and New York. Tenants are primarily

established independent nonprofit organizations who value the community and efficiency of sharing facilities.

Tides has created a range of networked services to support its varied activities with consolidated administration,

finance, governance, and communications. The range of centralized services continues to grow in this

networked model.

More information about Tides is in Part 4: Case Studies.

Services to Donors and Foundations Tides offers a range of philanthropic services, including donor-advised funds, a form of shared services created

in the philanthropic arena. Donors make contributions of cash or other assets to a fund within Tides, and

retain the privilege of recommending grants. In addition to grantmaking vehicles, Tides supports grantmaking

programs through consulting services that include strategic planning, management of application processes,

proposal evaluation, and more. Tides also administers contracts to consultants and vendors on behalf of private

foundations to link grantmaking programs to evaluation, communications or research resources. By taking on

the expenditure responsibility of these activities, Tides relieves the funding institution of significant logistical,

administrative, and regulatory burden. In brief, the funder makes a single grant to Tides and Tides in turn

manages and administers the activity of the grant and fulfills all reporting requirements. This service offers the

additional benefit of helping foundations meet their grantmaking payout requirements while working within

the restrictions of their internal programs.

More information about Tides’ shared services programs is in Part 4: Case Studies.


With an understanding of the customer base, a framework

is developed to allocate the shared services’ costs and

benefits. All shared services generate value. This value or

benefit is divided among participants. The costs or

expenses of the shared service are also allocated. Usually

organizations are charged a service fee, such as an

initiation fee, annual fee, membership fee, hourly rate,

service rate, license fee, or rental fee. Sometimes

non-monetary payments (e.g. bartering) are also

accepted among participating nonprofit organizations.

There are many factors to consider in allocating the

costs and benefits of a shared service:

n The mission of the shared services provider

n Business model goal to generate profit, break even,

or subsidize services

n Feasible number of participating organizations

n Projected shared service usage

n Customers’ size as measured by headcount, budget,

or square footage of office space

n Participating organization commitment, based on

when an organizations begin to participate, initial

investment, and/or ongoing resource contributions

n Start-up expenses, operations costs, and future

investments

n Participating organizations’ willingness to pay

n The price of competitive offers

n Other market trends

Four Allocation ModelsThe allocation of costs and benefits for shared

services requires consistency and a clear rationale

that can be easily explained to potential customers.

Most often, costs and benefits are allocated according

to four methods.

Equal Allocation

The simplest approach: participants pay an equally

divided portion of total expenses for equal access

to services.

Usage

Organizations pay a service fee based on how much

they use the shared service or when it’s used, i.e. nights

and weekend usage may cause higher costs.

Customer Size Per Capita

A sliding scale method that allocates more costs to

participating organizations with more staff, bigger

budgets, or larger offices. Use this model when larger

organizations would typically have the opportunity to

use the shared service more often.

Commitment Level

A sliding scale method that rewards organizations

with higher levels of commitment; organizations that

initially invest, house the shared services, or show some

other financial or non-financial commitment receive

benefits but bear lower costs compared to other

participating organizations.

HOW ARE COSTS AND BENEFITS ALLOCATED?


Discounted pricing is important to offer when there is a benefit to bulk purchase or making a longer time commitment.

Similarly, organizations can bundle their shared services offerings to encourage organizations to more fully participate.

For example, the Thoreau Center for Sustainability, along with most other multi-tenant nonprofit centers, bundles

associated shared services into the rental price for space. Tenant organizations are charged one rental fee that includes

the costs for office space, public amenities, and services, which encourages tenants to participate in shared services

beyond their workspaces and divides the costs for shared services equitably.

Shared services providers often combine different allocation methods–square footage, organization’s head count, actual

usage–for different services, to meet the needs of diverse organizations while covering basic costs.

Fee Structure For Fiscal Sponsorship

Sponsored organizations pay a percentage of their annual revenue to their fiscal sponsor. In some models, sponsored

organizations with revenue in excess of a designated amount in a calendar year pay a smaller percentage. Some

fiscal sponsors charge a higher percentage for funding from government sources because government grants entail

significantly more auditing and reporting services.

Organizations collecting monetary or non-monetary payment from shared services should consult with an attorney and

accountant to ensure that appropriate policies and systems are in place for recognizing and reporting earnings.

Sample Cost and Benefit Allocations for Shared Conference Room

Allocation Method Intention Benefit Allocation Cost Allocation

Equal Allocation Simplicity and equality 25% or 10 hours 25% or $250

across all organizations per week per month

Usage Fee-for-service Use of room as needed Hourly fee, plus

allocation of rental fee

that is not paid for by

hourly use

Size of Organization Sliding scale based Large organization: Large organization:

on size or access 15 hours per week $375 per month

to resources Medium organization: Medium organization:

10 hours per week $250 per month

Small organization: Small organization:

5 hours per week $125 per month

Commitment Level Sliding scale that Group housing Group housing

rewards commitment conference room conference room

within its office: within its office: $0

10 hours per week Other three

Other three organizations:

organizations: $333 per month

10 hours per week

As an example, four organizations design a shared service to jointly use a conference room. The organizations spend

$1000/month to rent, staff, and provide support services to make the room available 40 hours/week. Below are examples

of potential cost and benefits allocations.


PART 3: PLANNING TOOLS

n How to Create a Shared Services Plan



n What Communication Skills are Necessary?



Marketing


Branding

n Conclusion


The shared services plan is a written document that

communicates the intention, scope, performance goals,

and financial estimates to potential partners, staff, and

funders. Similar to a business plan or program plan,

the shared services plan and associated financial

statements make the case with organizations interested

in co-founding the service. The plan also shows the

expertise and motivation of the author or founding

organization. The plan proves that the shared service

adds value for participating organizations and that

the author brings the right resources to the table to

ensure success.

Creating a shared services plan is an important step

in assessing the financial viability of a projected shared

services program. It should be received and approved by

the board of directors before undertaking the venture.

The shared services plan is also a point for stating

expectations and performance goals for the shared

services’ first few years, as well as providing an evaluation

framework. Evaluation involves comparing real outcomes

to performance goals. The broader constituent base,

participating organizations, governing bodies,

management, staff, and funders participate in shared

services evaluation. Important areas for consideration are:

n Mission – Does the shared service support and enhance

the mission of participating organizations?

n Participant satisfaction – Are participating

organizations receiving the value they expect?

nOperations – Are governance, management, and

staffing procedures effective?

n Market performance – Is the shared service meeting

performance expectations as compared to competitors

and other market forces?

n Budget – Is the annual budget for the shared service

appropriate?

n Cash flow – If the shared service requires monetary

transactions, are the flows of cash in and out

sustainable?

n Revenue/profit – If the shared service generates

monetary income and/or profit, are the earnings in line

with expectations?

n Funding – Are funding sources appropriate given

current and future needs?

HOW TO CREATE A SHARED SERVICES PLAN



All shared services plans, regardless of funding and

financing methods, include financial projections.

The purpose of financial statements is to portray

concisely how the shared services will financially impact

participating nonprofit organizations. Financial

projections include projected revenue, operating

budgets, and cash flow statements, preferably for the

first three to five years of projected operations. Some

shared services, especially those involving significant

investment in physical space or resources, also require

sources and uses of capital, for example, a multi-tenant

nonprofit center or similar shared workspace. These

projections take into account:

n Start-up investment, including necessary investments

in new resources and the market value for existing

resources allocated to the shared service. Likely start-

up investment includes management and personnel,

purchase cost or licensing fees for data management

systems, office space and supplies, infrastructure

including utilities, and communications-related

expenses;

n Operating expenses, including direct and indirect

costs and any resource depreciation over the duration

of the service’s operations; and,

n Anticipated return on investment if and when the

start-up and operating expenses are recouped.

Planning with the Merage Foundation’s Shared Services ToolkitThe Merage Foundation invests in, and takes risks

with, innovative social entrepreneurs. In support

of their mission, the foundation provides

numerous excellent resources in their Shared

Services Toolkit to help early childhood education

providers plan and implement shared services.

Within the Toolkit, the foundation provides an

example of a shared services planning document,

“Governance Structure for the Children’s Home

Child Care Center Network.” This three-page

document concisely presents the proposed

organizational structure, decision-making

framework, management and staffing plan,

governance method, budget and financial

management, quality assurance and professional

development, technology, and other services.

A copy of this document is available as an

Appendix to this guide. The Merage Foundation

also provides financial statement information

about budgeting and cash flow management,

including a Draft Start-up Budget for a Home-

based Alliance. This budget is also included as an

Appendix to this guide.

More information about the Merage Foundation

and the free Shared Services Toolkit at

www.merage.org.


http://www.merage.org

Communications have a big impact on the success of

a shared service. Shared services require strong

communications among participating organizations

and service providers.

Important communications at different stages of the

development process include:

n A shared services plan and associated financial

statements to share with potential founding

organizations and funders

n Service agreements with participating organizations

n Marketing materials

n Ongoing communications and updates about

shared services operations and opportunities for

customer feedback

A shift to shared services presents many opportunities,

but also some challenges. Agencies used to managing

their own services often have unique methods of

accomplishing work, and often do not find the need for

hard deadlines. Shared services generally require

agencies to standardize their approaches to ensure

efficiencies, and deadlines become more important.

This change of work culture often is perceived as a loss

of autonomy and control. It is important to balance

concerns about change in work culture with advantages

gained through better services and economies of scale.


Typically, all shared services are structured by a written

agreement, also termed a service contract, memorandum

of understanding, license agreement, or lease. The

agreement defines roles, responsibilities, and costs and

benefits received for all participating organizations and

service providers. The agreement outlines policies

and systems for providing the service and provides

accountability in the case that something goes amiss.

A shared services agreement with an external provider

is typically reviewed by legal counsel and contains

statements of expectations about the:

n Mission and desired outcomes of the shared services

n Relationship among participating organizations

n Legal structure

n Governance, management, and staffing responsibilities

n Allocation of the shared services’ costs and benefits,

financial and non-financial, including minimum

participation requirements

n The expected timeline for start up, development, and

if applicable, end date

n Communication standards

n Required investments, financial and non-financial

n Liability of provider and participating organizations

The following examples are included as appendices

to this guide:

n Centre for Social Innovation, Standard Sub-Lease

to Tenants

n Letter of Agreement between Tides, Inc. and

Partner Organization

n United Community Services Cooperative

Application for Membership

In some cases, collaborations are very limited by

scope and resources and do not require written

documentation. For example, multiple organizations

co-organize a one-time educational workshop for

constituents. In this case, organizations may treat the

collaboration as part of regular operations and create

a simple memorandum of understanding (MOU).

However, any time that a split of financial resources

is involved, a written agreement before engaging in

shared services is highly recommended, even if just a

simple Memorandum of Agreement.


Some shared services require careful management

of confidential information, such as donor or client

information. For example, organizations providing

health care to patients are required to enforce the

Health Insurance Portability and Accountability Act

(HIPAA) as well as other privacy and confidentiality

standards (Ginsburg 2008).

WHAT COMMUNICATION SKILLS ARE NECESSARY?


It is possible to maintain private information among

organizations sharing services. Clear communication

policies and procedures need to be in place.

Participating organizations should also agree to and

sign a written service agreement that details the scope

of shared services and associated communications.

Marketing

In general, shared services, like other commercial service

offerings, need to be marketed to ensure that customers

understand the value of the service. Shared services

providers should craft their marketing messages to

provide information about the service, to spark interest,

and ultimately, to increase sales.

Many mission-based organizations use marketing that

concentrates on mission, program, and services provided.

Shared service providers should consider using a more

customer-focused approach by identifying customer

needs as opposed to just describing services available;

and by developing an ongoing relationship rather than

focusing on the point of sale.


Once the shared service is up and running, plan the

content, format, media vehicle, and frequency of

communications to reach different constituents. Regular

and ongoing communications build trust and facilitate

collaboration. Communications keep participants

informed and motivated to support the shared service.

In planning these communications consider:

n Topics to be communicated to constituents

n Transparency in governance and decision-making;

how much information about governance and

management is necessary for constituents

n Frequency for different communications including

a projected schedule for in-person meetings

n Methods for customer feedback

n Projected costs for each type of communication

and resulting benefits that are anticipated

Ongoing communications also facilitate customer

feedback. Shared services provide value to all participating

organizations. Participating organizations need multiple

venues to provide feedback about the shared service.

Expect feedback to reflect changing needs of participants

and their constituents.

Marketing, communications, and public relations are an

important part of shared services delivery. Participating

organizations communicate with one another

independently and this communication should be

encouraged. However, a staff person representing the

shared services also needs to manage communications

as part of their shared services responsibilities.

Branding

Branding for shared services communications may or may

not be necessary. A separate brand makes sense if the

shared service is structured as a new program, venture,

or organization; the shared service has a mission that

sufficiently is distinct from founding organizations;

and/or the shared service requires new organizations

to participate on an ongoing basis.

However, if the shared service is more limited in scope,

not public facing, or structured as a program of a

participating nonprofit organization, separate branding

may not be needed.

Negotiation and CommunicationThrough his research, consulting, and extensive

experience with nonprofit leaders, David La Piana

outlines five stages for strategic restructuring

including “Negotiation and Communication.”

A list of eight procedures is offered for effective

negotiation, which includes board authorization

and the development of a “good faith” negotiations

resolution, due diligence, communication, and

rumor control, board discussion, and agreement.

In completing any negotiations, organizations are

said to face “fact-oriented” barriers, for example

financial or legal liabilities pending, as well as

“human-oriented” barriers, such as fear or lack

of trust.

More information about La Piana’s FiveStages

forStrategicRestructuring, and in particular

Negotiation and Communications at

www.lapiana.org.


http://www.lapiana.org

CONCLUSION

OPPORTUNITIES

Consider the mission fit, organizational capacity, resources, and external market.

Recognize that the shared services’ scope and services may grow over time as

trust builds among participating organizations.

Many structures are suitable for shared services. Common structures involve

collaboration among independent organizations, fiscal sponsorship, joint

venture, and networked support of affiliated organizations. Different structures

require different levels of mission alignment and organizational integration.

One key to success is good market research to ascertain the pool of potential

users of the services, how much they will pay, and what services they need.

Shared services create a variety of funding opportunities. Participating

organizations support the organization through fees for service. The provider’s

traditional funders can also be looked to for support. All shared services should

be based on a plan for adequate funding – whether it is earned income or

ongoing grant revenue – to subsidize the shared services program.

Governance, management, and staffing represent three critical sets of

responsibilities. Governance generally flows from the shared service’s structure.

Management and staffing systems ensure that the people in these roles have

the knowledge, experience, and capacity to do the job well.

Costs and benefits of the shared service are allocated to customers to match

the cost to provide the service, the goal of the service, and the mission of the

shared services provider.

Key Challenges and Opportunities for Shared Services

Nonprofit organizations are facing challenging times as operating expenses and demands for services are increasing.

Shared services offer a better business model by creating value through allocating resources across traditional

organizational boundaries. Shared services increase purchasing power and reduce costs, increase operating

efficiency and reduce risk, heighten access to high-quality services, and foster collaboration and innovation. This

guide provides step-by-step guidelines for nonprofit organizations creating a shared services program for the first

time or for service providers looking to expand their business offerings. The table below is a summary of the steps

outlined in this publication.

CHALLENGES

Setting a realistic

scope and

performance goals

Choosing the “right”

structure for

shared services

Market assessment

Accessing funding for

planning, operations,

and future growth

Creating governance,

management, and

staffing systems

Allocation of

costs and benefits

continuedonnextpage


OPPORTUNITIES

Similar to a business plan, a shared services plan demonstrates the value added

by the program and assesses the financial viability of a projected shared services

program. All plans should include financial projections, regardless of funding

sources. Financial projections include projected revenue, operating budgets,

and cash flow statements for the first three to five years.

Different communications tools convey information to different constituents

at different points in time. A written shared services agreement generates

consensus among partner organizations. Ongoing communications, including

customer feedback, guide the shared service over time and ensure it meets

long-term performance goals.

CHALLENGES

Creating a shared

services plan

Communicating

effectively with

customers, and

other constituents


PART 4: CASE STUDIES

n Al Sigl Community of Agencies

n Centre for Social Innovation

n Children & Family Services Center

n The Foraker Group

n GroundWork group

n Nonprofit Enterprise at Work (NEW) npServ™ Program

n Public Health Foundation Enterprises

n Third Sector New England’s Fiscal Sponsorship Program

n Tides, Inc.

n United Community Services Co-op

AL SIGL COMMUNITY OF AGENCIES MANAGEMENT SERVICE ORGANIZATION

Mission: Al Sigl is a resource organization that provides shared and dedicated facilities, enhanced awareness, and financial support for a partnership of independent human service agencies to help them achieve their goals and the goals of people with disabilities.

Client Base Six member agencies and two affiliate agencies

Annual Budget $9 Million

Structure Independent nonprofit organization

Founded 1962

Website www.alsigl.org

Location Rochester, New York

Contact Daniel Meyers, President

Al Sigl Community of Agencies (Al Sigl) provides high-quality,

affordable facilities and shared business services to independent

non-profit organizations that serve people with disabilities and

special needs. Al Sigl Community of Agencies is a network of

six Member Agencies on five campuses in the Greater Rochester

area. Shared services offerings have included:

n Human resources management and administration

n Risk management

n Facilities management and maintenance

n Telecommunications

nPublic relations and communications

n Management information systems

In 1998, Al Sigl began providing non-programmatic,

administrative services to its agencies. Member Agencies

could purchase the service functions from a menu of services

through a one year contract that is negotiated annually.

Al Sigl hires managers to oversee the different service functions

and one vice president to manage all of these services

At first, Al Sigl aggregated its Member Agencies’

telecommunication services and negotiated on their behalf

for the most competitive price available. Al Sigl’s successful

efforts saved Member Agencies 60% on their bills without

having to change existing equipment, vendors, or services.

Until 2008, Al Sigl offered its Member Agencies risk

management and insurance services. The success of this shared

services program extended beyond the legal capacity allowed

by New York State law, which limits the scope of licensed

brokers. Also, the success of the program raised the specter of

unrelated business tax for Al Sigl. In response to both concerns,

Al Sigl negotiated the transfer of the business to a for-profit

insurance brokerage, which now services Al Sigl’s Member

Agencies in addition to its other not-for-profit clients.

Key Lesson Learned

n Start the planning process early. Al Sigl initiated planning and

strategic thinking in 1992, six years before they began offering

their first shared services program. They started by convening

stakeholders and champions of the program together to

form a study committee.

n Be patient. When Al Sigl first started offering HR services,

Member Agencies did not fully recognize the benefits of

having a well-orchestrated human resources department.

With time, Al Sigl demonstrated what a robust HR

department could do for organizations and demand

increased dramatically.

n Raise money to cover the costs of operating shared services.

For many years, Al Sigl was able to cover its operational costs

through revenue earned. Recently, this has not been true.

n Lock in customers. Instead of offering only one-year contracts,

Al Sigl now offers multi-year contracts.

n Learn to adapt to changes. Despite intensive planning up-

front, Business Services could not have predicted its evolution.

n Strong leadership is key in forging change in business

planning, and successful execution. Always have leaders in

your pipeline.


CENTRE FOR SOCIAL INNOVATION SUPPORTING INNOVATION BY PROVIDING SHARED WORKSPACE

The Centre co-locates a diverse set of organizations and

individuals who work for social innovation. Founded in 2004,

the Centre provides physical desk space, virtual resources,

and social opportunities to nurture collaboration, community,

and innovation. Shared services include:

n Office space

nMeeting rooms

nInternet and phone services

nReception services

nCross organizational marketing and electronic newsletter

nOffice equipment

nOptional health and dental insurance

nCollaborative programs

nShared bicycles

Four different types of workspaces address participants’ different

needs. Private offices and private desks support those seeking

longer-term, and full-time, rental arrangements. Hot Desks offer

limited access to workspace at lower commercial rental rates.

Visitors are also offered temporary workspace, billed by the day

or by the week.

All who locate at the Centre sign rental agreements to pay a

base rent for desk or office space plus a basic amenities fee.

The amenities fee, though separated out from rent, is not

optional. Additional fees are charged for particular services

based on usage. For example, fees for copier use vary by the

number of copies made. This billing system is equitable in that

all organizations pay basic fees for shared office space and

equipment to support the community, while those who use

more services pay for them.

The Centre sets pricing for shared spaces and services to cover

the operating expenses. This matches the Centre’s mission to be

financially self-sustaining.

Members of the Centre also sign a Cooperation Policy, pledging

to actively support the community and maintain a culture of

collaboration. This commitment is evidenced by numerous

inter-organizational programs and a highly diverse calendar of

public events that take place at the Centre each month.

Key Lesson Learned

n Create multiple shared spaces offerings to suit

participants’ needs.

nCreate cost structures that are equitable and also strengthen

the community of participating organizations.

nEncourage a general commitment of participating

organizations, beyond a rental agreement, that supports

the mission of the shared service and its community.

Mission: To catalyze social innovation in our home base of Toronto and around the globe. We believe that society is facing unprecedented economic, environmental, social, and cultural challenges. We also believe that new innovations are the key to turning these challenges into opportunities to improve our communities and our planet.

Participants 180 organizations and projects

Annual Budget $1 Million


Founded 2004

Website www.socialinnovation.ca

Location Toronto, Canada

Contact Eli Malinsky, Project Manager


CHILDREN & FAMILY SERVICES CENTER FACILITATING PROGRAM COLLABORATION TO BETTER SERVE CHILDREN AND FAMILIES

The Children & Family Services Center was founded in 2001 by

nine nonprofit organizations co-locating to better serve the

children and families of Charlotte, NC. The collaboration began

by sharing office space and property management. Over time,

participating organizations developed shared programs and

supportive services. The center’s shared services now include:

n Office space and meeting rooms

n Internet and phone services

n Client services and programs

n Administrative services

n Technology support and replacement programs

n HR and financial services including shared retirement

and health benefits

More than 60 collaborative client services have been

documented at the center thus far. Most shared programs

happen among two or three organizations. Typically, one

organization identifies a need and enlists neighbor agencies

to fill that need as appropriate. For example, organizations in

the center are currently planning to design a shared intake

form for clients receiving services. This will enable partner

agencies to share client information more easily, enhance

the services clients receive, and increase service delivery.

Center staff support programmatic collaborations as requested

but encourage agency staff to self-organize. Program staff

are experts in client needs and services, so they are best

suited to identify new areas for collaborative solutions.

Shared programming is one of the key indicators of success

at the center.

A range of evaluation methods are used to capture the value

these shared services create.

The center also supports shared administration and technology

support and upkeep. Tenant organizations participate in

planning and funding shared overhead services. Their

relationships, based on trust and a history of working well

together, have recently led to the successful implementation

of shared human resources and finance services.

Key Lesson Learned

n Shared programs develop organically over time because they

require trust and awareness across organizational boundaries.

n Program collaboration should not be forced but rather

facilitated as requested by participating organizations.

n Evaluate the performance of programs relative to goals, even

when goals are difficult to measure.

n Create opportunities for organizations to not only participate

in, but also be responsible for the governance and funding

of shared overhead services.

Mission: Improving the lives of children and families through an innovative partnership of community resources that promote strong families and advocate for change.

Participants Nine nonprofit organizations, all serving children and families

Annual Budget $800,000


Founded 2001

Website www.childrenfamily.org

Location Charlotte, North Carolina

Contact Peggy Eagan, Executive Director


Mission: The Foraker Group is dedicated to increasing the leadership and management skills of professionals and volunteers working in Alaska’s nonprofit and tribal organizations.

Participants 470 members, all serving nonprofit organizations

Annual Budget Over $5 Million


Founded 2001

Website www.forakergroup.org

Location Anchorage, Alaska

Contact Dennis McMillian, President & CEO

THE FORAKER GROUP OFFERING HIGH-QUALITY FINANCIAL AND MANAGEMENT SERVICES TO SUPPORT THE ALASKAN NONPROFIT SECTOR

The Foraker Group is dedicated to building the strength of

Alaskan nonprofits through educational opportunities,

organizational development consulting, and the following

shared services:

n Financial management

n Human resources mentoring

n Health insurance

n Planned giving

n Website development

n Pre-development services

n Grant mentoring

The Foraker Group currently works with over 400 member

organizations, comprised of nonprofit organizations and native

Alaskan tribes. The majority of member organizations have

annual budgets below $250,000. Rates for membership vary by

budget size. Membership is renewed annually. An estimated

ten percent of all members contract for shared services,

primarily in the area of financial management.

The Foraker Group provides comprehensive financial

management services, offering accounting, payroll, reporting,

budgeting, audit preparation, payroll and benefit processing,

and reporting expertise. The Foraker Group offers these financial

services to member organizations without stipulations requiring

them to enter into fiscal sponsorship agreements. Member

organizations receive services while maintaining organizational

and programmatic independence. Due to the high quality of

services and affordable pricing, the Foraker Group’s financial

management services are quickly expanding to serve a greater

number of member organizations.

Financial management and other shared services are carefully

planned to generate earned income to cover the majority of the

Foraker Group’s operational expenses. Philanthropic support is

accepted primarily to defray the increased travel and service

costs due to serving organizations in remote locations.

Currently, the Foraker Group is exploring new technology

solutions, including video conferencing and Skype, to serve

an even broader geographic area without incurring associated

travel costs.

Key Lesson Learned

n It is possible to offer shared services, including financial

management, without requiring participants to become

fiscally sponsored or change organizational structure.

n Create pricing strategies that consider the resources and

location of participating organizations.

n Carefully plan shared service offerings to meet constituent

demand and generate sufficient earned income.

n Partner with funding organizations to reduce the costs

affiliated with serving constituents in high-cost

geographic areas.


GroundWork group AFFORDABLE AND SUSTAINABLE INFORMATION TECHNOLOGY SOLUTIONS WHICH SERVE AS A STRATEGIC ENABLER OF NONPROFIT SUCCESS

GroundWork group was founded in 2005 with the help of

United Way of Central Ohio and Tony R. Wells, who wanted to

address the business needs of nonprofit organizations and

leverage technological solutions to enable nonprofits to

succeed. Shared services offerings include:

n Technology planning and infrastructure

n Information management

n Telecommunication system

n Ongoing technical support and management

n Network management

n Thin client and data center

n Web development, hosting, and maintenance services

n Email, data storage, back-ups, antivirus

n Technology maintenance and security

n Data center hosting

GroundWork group helps reduce costs and create efficiencies

through its shared technological solutions. Participating

organizations receive a suite of managed services, including

infrastructure management, technology, and network and

telecom assessments. Customer organizations benefit from the

collective solutions of the participating community. A product

developed by GroundWork group for one member organization

can be adapted to use with another customer.

GroundWork group also offers education to nonprofits to share

industry best practices and how to best leverage technology as

a strategic part of the nonprofit business. GroundWork group

helps place information technology professionals on the board

of nonprofit organizations.

GroundWork group has two types of membership: full members

who pay an annual membership fee of $500 and associate

members who do not pay an annual fee. Additional fees for

services are charged at below-market rates with the rate

determined by the level of membership. These services

include an integrated suite of web-based data management

tools to help nonprofits manage their relationships with their

constituents, event registration, and operations more effectively.

Key Lesson Learned

n Establish partnerships with private organizations willing to

provide services to nonprofits at below-market prices instead

of relying on outside funding to help subsidize the costs

to nonprofits.

n Before launching your shared services program, secure

funding to cover some of the costs for the initial investment,

first few years of operations, and programming.

n Actively engage and educate the funding community on the

benefits of shared IT.

n Be prepared to articulate how much it costs to run a business

from a technological perspective.

n Build strategic partnerships with stakeholders from the

nonprofit, foundation, local business, and information

technology communities. Get them to support and invest

in your idea.

Mission: To strengthen the impact of nonprofit organizations by enhancing their ability to achieve their missions through sustainable and affordable information management, education, and technology solutions.

Participants Over 150 organizations

Annual Budget $1,061,450

Structure 501(c)(3) nonprofit member-based organization

Founded 2005

Website www.groundworkgroup.org

Location Columbus, Ohio

Contact John Hrusovsky, CEO


NEW’s npSERV™ PROGRAM OFFERING NEW AND INNOVATIVE SHARED TECHNOLOGY SERVICES

npServ provides nonprofit organizations with shared

technology services that reduce costs and increase efficiency.

Shared services include:

n Technology infrastructure

n Data management

n Remote access

n Email

n Web development services

n Ongoing support

n Technology maintenance and security

Participating organizations benefit from npServ shared

infrastructure, a single powerful server that can support the

computing needs of up to thirty simultaneous users.

Organizations that subscribe to npServ reduce costs by

minimizing their need to purchase updated hardware and

software. npServ also reduces participants’ technology

maintenance and security costs.

Participating organizations pay initial fees that include server

setup, email licensing, and networking fees for up to three years

of operations. There is also an ongoing service fee that is billed

per user per month. Currently the majority of operating expenses

for npServ are funded through grants. By 2011 it is estimated

that earned revenue from npServ will repay initial investments

and ongoing operating costs.

The npServ system is actively managed by full-time information

technology staff employed by NEW. Staff provide expert,

ongoing guidance and hands-on support for participating

nonprofits. In addition, a growing community of npServ users

support each other by sharing best practices. npServ staff

facilitate feedback and lessons learned by meeting with

participating organizations on site during set-up and periodic

service appointments.

Key Lesson Learned

n Implementing shared services requires a tremendous amount

of planning and investment. NEW invested two years to

research and develop the npServ system.

n Keep a “sales” perspective when offering shared services.

The service provider should actively educate participating

organizations about the added value of the shared services.

This process may take some time.

n Use a combination of billing techniques to pay for initial

set-up and ongoing services.

n Rely on traditional funding sources for the start up of a new,

shared service, then price ongoing shared services to be

financially self-sustaining while meeting revenue and

mission objectives.

Mission: To help nonprofits succeed by strengthening nonprofit management and offering solutions to issues facing our nonprofit community.

Client Base Over 145 individuals from 16 nonprofit organizations

Annual Budget Over $1.2 Million

Structure Program of a nonprofit organization

Founded 2007

Website www.new.org

Location Ann Arbor, Michigan

Contact Neel Hajra, President and CEO


PUBLIC HEALTH FOUNDATION ENTERPRISES PROVIDING COMPREHENSIVE, HIGH-QUALITY, SHARED SERVICES TO IMPROVE THE OPERATIONS OF PUBLIC HEALTH PROGRAMS WORLD-WIDE

Public Health Foundation Enterprises (PHFE) is the largest public

health nonprofit organization in the United States, providing

hundreds of organizations with access to high-quality fiscal

sponsorship, infrastructure management, and consulting

services. Through these supportive services, Public Health

Foundation Enterprises enables clients to focus more on

mission-related activities rather than overhead functions.

PHFE’s comprehensive offering of shared services include:

n Fiscal services

n Human resources

n Contract and grant management

n Project management

n Systems analysis and design

n Quality assurance

n Administrative support

Founded in 1968, Public Health Foundation Enterprises was

initially structured as a program of the Los Angeles County

Health Department to serve governmental public health

organizations. Over time, many nonprofit organizations and

unincorporated groups also requested PHFE’s assistance with

project management, fiscal sponsorship, and financial and

human resource services. In response, PHFE evolved into an

independent nonprofit to better serve a diverse client base

with shared services and consulting expertise. Currently

an estimated 10% of PHFE’s clients are non-governmental

organizations.

A written memorandum of understanding (MOU) is used to

define the relationship between PHFE, client organizations,

and principal investigators/project directors. Because of the

wide-range in services offered and clients served, the terms

of MOUs are often customized.

All shared services are offered to client organizations in a

“pay-as-you-go” pricing model. PHFE’s shared services generate

earned income to cover expenses and contribute to a reserve

fund. Due to the nature of governmental contracting, PHFE also

maintains a line of credit to ensure sufficient cash flow.

PHFE’s shared services are evaluated through annual customer

satisfaction surveys, site visits, and numerous opportunities for

clients to provide direct feedback. This year, personal interviews

will also be completed with selected clients to gain more

detailed feedback.

Key Lesson Learned

n Shared services can be structured to serve both governmental

and non-governmental organizations.

n Customize service agreements when offering a wide range of

shared services to a diverse client base.

n Create multiple opportunities for clients to evaluate service

offerings and provide direct feedback over time.

Mission: Public Health Foundation Enterprises is dedicated to improving the health and well being of people and communities by providing a wide spectrum of quality management and direct consulting services.

Constituents Over 140 clients and partners worldwide

Annual Revenue Over $100 Million


Founded 1968

Website www.phfe.org

Location City of Industry, California

Contact Mark Bertler, CEO


THIRD SECTOR NEW ENGLAND’S FISCAL SPONSORSHIP PROGRAM PROVIDING FINANCIAL, ACCOUNTING, HUMAN RESOURCES, AND INFORMATION SYSTEMS SUPPORT TO GROUPS ENGAGED IN PROGRESSIVE SOCIAL CHANGE

Third Sector New England’s Fiscal Sponsorship Program provides

back office support to progressive social change groups that,

for varying reasons, typically do not have their own 501(c)(3) tax

status. Standard fiscal sponsorship offerings include:

n Financial management

n Accounting

n Contract management

n General management support

n Information systems advice

n Employee relations and benefits management

Third Sector New England’s Fiscal Sponsorship Program

supports its projects with services such as preparation of

financial reports, audits and tax filings, insurance and risk

management, administration of payroll, benefits and

personnel policies, and technology systems advice.

Fiscally sponsored projects are brought under the corporate

umbrella of Third Sector New England; legal and tax-exempt

status extend to these programs because Third Sector New

England serves as the legal employer and corporate parent for

all of its fiscally sponsored projects and project staff. These

socially progressive groups gain access to expert support and

state-of-the-art infrastructure without an organizational

investment in personnel and systems. This efficient model

enables groups to focus on core competencies related to their

mission and programs, rather than administration and overhead.

Clients pay a fee for fiscal sponsorship, based on their expenses.

Administrative costs are allocated to projects based on their

actual expenses. All potential projects are vetted for mission

fit, leadership, sustainability, governance, staffing, and a

commitment to partnership. These groups must also be based

in New England or New York City. These factors support the

broader mission of Third Sector New England.

Key Lesson Learned

n Rely on mission, vision, and values to guide decisions about

the level of support offered and projects accepted.

n Recognize market trends and respond with supportive

services, e.g. high costs to obtain and sustain independent

501(c)(3) tax status, demand from nonprofits for expert

financial analysis and record-keeping.

n Be very specific about what services are included and provide

referrals to other trainings or consultants for services outside

fiscal sponsorship (e.g. fund development, strategic planning).

n Get input from project directors and staff on a regular basis

through formal and informal communications.

n Use diverse programs and services to build community

among participating groups and other stakeholders.

Mission: Third Sector New England provides information and services to build the knowledge, power, and effectiveness of nonprofit organizations that engage people in community and public life. We act also to promote wider recognition of community-based organizations as the primary stewards of our core societal values. The ultimate intention of our work is to create a more just and democratic society.

Participants Over 60 individuals from six nonprofit organizations

Structure Program of nonprofit parent organization

Founded 1959

Website www.tsne.org

Location Boston, Massachusetts

Contact Kay Snowden, Program Director


TIDES, INC. PROVIDING CENTRALIZED SHARED SERVICES TO SUPPORT THE OVERALL TIDES ENTERPRISE

Tides, Inc., an internal division of Tides, was founded in 2003

to offer centralized business services and leadership to Tides’

client-facing units including Tides Shared Spaces, Tides

Foundation, and Tides Center.

Centralized shared services have evolved to include:

n Administration

n Facilities management

n Human resources

n Information technology

n Marketing and business development

n Finance

n Executive leadership

n Governance

Tides, Inc. employs staff who provide infrastructure to the whole

of Tides, including the offices of the Chief Executive Officer and

Chief Financial Officer. The range of centralized leadership and

shared services continues to grow into a networked model.

While each partner organization provides different external

client services, Tides, Inc. is not a public-facing brand. Instead

Tides, Inc. provides essential infrastructure support only to

Tides organizations. Costs for Tides, Inc.’s services are billed

on a monthly basis to partner organizations in two ways:

core services are expensed based primarily on headcount;

and additional special project-based work is charged as a fee

based on usage.

Key Lesson Learned

n A successful network requires organizations to affiliate

strongly with the mission and operations of both the

meta organization (including the shared service

provider) and their specific operating division.

n Shared services require strong support and leadership of

the Board, Chief Executive, and Chief Financial Officers to

champion and operate them effectively.

n Affiliates must build trust and adjust operating procedures

to support collective work and purpose. This operational

and cultural change takes time.

n Centralized shared services are intuitively more efficient

because they reduce staff redundancies (for example,

having one receptionist for the whole). However,

substantial start-up coordination is required. This may

reduce cost savings.

n Some shared services can build purchasing power through

centralization, including administration and facilities. Other

shared services, such as information technology, may not

build purchasing power per se, but will increase the quality

of services provided by centralizing expertise.

Mission: To partner with philanthropists, foundations, activists, and organizations across the country and across the globe to promote economic justice, robust democratic processes, and the opportunity to live in a healthy and sustainable environment where human rights are preserved and protected.

Participating Tides Shared Spaces, Tides Foundation, Organizations Tides Center

Annual Budget Combined budget of over $134 Million

Structure Affiliated nonprofit organization

Founded 1976

Website www.tides.org

Location San Francisco, California

Contact Daniel Saat, Senior Financial Analyst


UNITED COMMUNITY SERVICES CO-OP POOLING RESOURCES TO ENHANCE SUSTAINABILITY AND ENCOURAGE INNOVATION IN THE NONPROFIT SECTOR

The United Community Services Co-op provides a wide range of

shared services to nonprofits organizations in British Columbia,

the majority of which are members of the co-operative. Shared

services for member organizations include:

n Strategy consulting

n Executive coaching

n Telephone systems

n Information technology

n Discounted pricing for office equipment and supplies

n Credit union services

n Human resources services

Member organizations vary greatly in mission and scale. Each

member organization owns shares of the co-operative, valued

at $50 per share. Members purchase different quantities of

shares on a sliding scale as determined by their organization’s

annual revenue in the year they join. Members govern the

co-operative and help determine new directions for growth.

A total of 4,200 shares have been sold in the co-operative’s ten

years of operations. There is no end or closing date for shares;

members can apply to sell their shares when they wish to exit

the co-operative.

Members may also purchase customized services and incur

additional charges based on the amount of service utilized.

The fees for these optional services are discounted below

market-rate for members. No other annual fees are assessed.

Members join the co-operative because of high-quality services

offered at relatively low cost. Organizations also gain visibility

and connection with other stakeholders interested in innovation

in the nonprofit sector.

In addition to supporting its members with direct services, the

co-operative has helped thirty other co-operatives start up

shared services for the benefit of the nonprofit sector.

Key Lesson Learned

n Create shared services that add substantial value for member

organizations and allow members to decide which services

they require. Do not mandate participation.

n Shared services can re-establish a sense of ownership in the

nonprofit sector because services can be financed and

governed by participating organizations themselves, rather

than public or private funding.

n The financial savings from shared services is only one part of

the value created. Shared services also help people to work

together in new ways. The innovation that can result from this

collaboration adds great value.

n Communicate lessons learned to help raise the visibility and

effectiveness of shared services in the nonprofit sector.

Mission: To provide leadership by pooling resources, creating opportunities for innovation, and providing an independent voice for the nonprofit sector.

Membership 107 nonprofit organizations

Annual Budget $993,000

Structure Small business cooperative

Founded 1998

Website www.ucscoop.com

Location Vancouver, British Columbia

Contact Tim Beachy, CEO


PART 5: APPENDICES

n The NonprofitCenters Network: Shared Services Options

nMerage Foundation: Staffing Shared Services

Alliance Central Office Staff Roles and Responsibilities

n Merage Foundation: Governance Structure

For the Children’s Home Child Care Center Network

nMerage Foundation: Family Home-Based Day Care

• Schedule of Projected Operating Revenues, Expenses and Start-Up Costs – Cash Basis

Under the Hypothetical Assumptions in Notes A and B

During the First Year of Operations

• Summary of Significant Projection Assumptions and Accounting Policies

nCentre for Social Innovation: Standard Sub-Lease to Tenants

n2008 Letter of Agreement: Between Tides, Inc. and Partner Organization

Appendix A – Tides Shared Cost Model

Appendix B – Service List

nUnited Community Services Co-op: Application for Membership

and Subscription of Shares

nChildren and Family Services Center: Services Agreement

THE NONPROFITCENTERS NETWORK SHARED SERVICES OPTIONS

TYPE OF SERVICES

Shared Things

1. Space

Workstations & Offices

Conference/Meeting Rooms

Computer Lab

Kitchen(s)

Parking/Bike Lockers

Showers and Locker Room

Event/Performance Spaces

Storage Facilities

Resource Library

2. Equipment

Telephone Systems

Fax Machines

Copiers/Printers

Filing Cabinets

Postage Machine

Paper and Office Products

Computers & Network Hardware

Printers

Event Technology (Conference Calls,

LCD projectors, etc.)

Vehicles/Busses

Shared People

1. Administrative Support

Guest Services/Reception

Clerical Support

Records Management

Security

Janitorial

Purchasing (Bulk Buying)

Maintenance/Repairs

Mail and Shipping Services

Already Shared

Already Shared

High Impact

High Impact

Willing to Share

Willing to Share


> Use this worksheet to survey your potential clients or partners’ needs. The result of this survey may inform which

shared services to offer and guide your business strategy.

THE NONPROFITCENTERS NETWORK SHARED SERVICES OPTIONS

2. Information Technology Services

Technical/Software Training

Service and Repair

User Technical Support

Application Development/Integration

General Technology Strategy

Technical Operations

3. Financial Management

Accounting/Bookkeeping

Credit Management

Insurance

Asset Acquisition and Tracking

Payroll

4. Fundraising

Grant Writing and Review

Direct Mail

Event Management

5. Marketing/Public Relations

Marketing Strategy and Planning

Media Relations

Graphic Design

Marketing List Management

Box Office

Mailing House

Copywriting

6. Human Resources

General HR Support

HR Policy and Compliance

New Hire/Termination Coordination

Recruiting

7. Programs/Client Services

Client Intake

Client Referral

Client Services

Educational Events

Campaigns

Other

Already Shared High Impact Willing to Share


MERAGE FOUNDATION: STAFFING SHARED SERVICES ALLIANCE CENTRAL OFFICE STAFF ROLES AND RESPONSIBILITIES

Leadership Tasks (shared among management team)

n Build relationships with current and prospective providers

(Alliance members)

n Vision and big picture

n Nurture relationships with state and national policy-makers

and partners

Program Leadership/Management

n Oversee professional development system/supports

for all sites

n Oversee teacher recruitment and support for all sites

n Mentor site supervisors

n Supervise mentor teacher(s) and coaches, including hiring

and matching them with participating sites

n Support quality improvement process (accreditation or

quality rating)

Fiscal and Administration Leadership/Management

n Oversee fundraising and development, including: developing

and implementing fundraising plan for central office, visiting

each site several times a year to develop and help implement

local fundraising plan, writing grants, building relationships

with funders, etc.

n Oversee Alliance technology needs and resources

n Plan and supervise budget process, including monitoring

cash flow, projecting future expenditures, etc.

n Monitor revenues regularly, including enrollment at all sites

n Hire and supervise administrative/fiscal staff, fundraising

and development consultants

Operations Management

n Manage center relationships; visit centers weekly

n Manager of record for center site supervisors (including

performance reviews)

n Problem solve operational issues at sites

n Assist with recruitment and full enrollment of all sites

n Oversee enrollment process (required information,

records, etc.) in all sites

n Liaison to local advisory or non-profit boards in all sites

n Support integration of new sites

n Human Resources (employment contracts, health insurance,

retirement plans, flex spending)

n Oversee bi-monthly payroll processing

n Substitute pool manager

n Licensing liaison

n Insurance contracts (Liability, D & O insurance, Health

insurance, Health Reimbursement) account management

n Oversee central office staff recruitment

Office Support

n Bank and credit card statement review and reconciliation

n Banking and credit card processing

n Tuition billing and collections

n Technology

n Cash management

n Prepare documents and reports for tax purposes (state,

federal, local)

n Manage payroll

n Liaison for labor department, IRS, local business license, etc.

n Supervise accounting and enrollment

n Manage vendor relations

Accounting and Enrollment/USDA/ Recruitment Support

n Weekly payroll processing

n Weekly enrollment tracking (gathers/compiles data from

all participating sites)

n Maintain individual records on all children enrolled

n Monthly bank reconciliation

n Data entry for all financial transactions

n Print tuition bills

n EFT and credit card processing

n USDA paperwork

n Recruitment background check

n Sub-pool scheduling and coordination

Certified Public Accountant (CPA) on retainer

NOTE: This is a list of tasks that can be centralized; the exact staffing

pattern will vary based on individual Alliance needs and resources.


MERAGE FOUNDATION: GOVERNANCE STRUCTURE FOR THE CHILDREN’S HOME CHILD CARE CENTER NETWORK

The Organizational Structure

The Children’s Home, a 501(c)3 non-profit agency, directly

operates a child development center and also provides

management services to ten community-based early childhood

programs. Five of the community-based sites are independent

non-profit agencies with a governing board of directors. The

remaining five sites are located in public schools.

Centralized staff includes the following positions: CEO,

Executive Director of Off-Site Services, Associate Director of

Off-Site Services, Administrative Assistant, Finance,

Maintenance, and Food Service. Only one of the community-

based sites has a full-time, on-site director. Management/

oversight in the remaining sites is provided by central staff

hired by the Children’s Home; these staff divide their time

among the sites and ensure that each program has a manager

on site at least 50% of the time. At least one lead teacher at

each site is the designated “go to” person in the event that

management staff is not on site.

Decision-Making

Contracts with each participating center (and/or each

funding source) clarify that central staff from the Children’s

Home is responsible for all management decisions, including

the following:

n Daily supervision of the center

n Hiring, termination and supervision of employees working

at the sites

n Hiring, termination and supervision of central (shared) staff

n Developing annual site budget and monitoring the expense

allocation for each site

n Enrollment of children (both individual enrollment decisions

as well as enrollment policies and procedures)

n Fee collection/accounts receivable

n Accounts payable

n Meeting with parents

n Referrals if children have special needs

n Quality control

n Fundraising and development plans and activities

n Technology (centrally and at the sites)

Personnel Management

Teachers and assistants at the five independent, non-profit

child care centers are employed by the non-profit board, but

supervised by management staff from the Children’s Home.

Each center negotiates a contract with the Children’s Home

that includes authority for the Children’s Home CEO to hire

(and if necessary, terminate) staff at local sites. Site Directors

approve timesheets and supervise teachers, assistants and

other on-site staff.

Teachers and assistants at the five school sites are employees

of the Children’s Home. Central staff process payroll and

administer benefits. The sites all have the same benefits and

employment policies. Wages are not identical. The Board of

Directors at each of the five independent sites determines

the wage scale for that site. The Children’s Home determines

wages for staff in all other sites.

Board of Directors

Each of the five independent sites has its own board of

directors. The CEO of the Children’s Home reports to the boards

of each agency and attends their monthly board meetings.

The President of the board of each agency is an “ex officio”

member of the Children’s Home board. Additionally, one

member from the Children’s Home Board serves on each of

the contract agency boards.

Each center carries its own liability and accident insurance

policy, however, with one exception – the policies are purchased

together using the same insurance carrier.

Budget

Budgets for each community-based site, as well as for the

Children’s Home central staff, are established by the CEO. The

Treasurer and Board for each site work with the Children’s

Home CEO in developing the annual budget, and must approve

it each year. The Children’s Home is responsible for monitoring

the budget, and makes monthly reports to each off-site board.

continuedonnextpage


MERAGE FOUNDATION: GOVERNANCE STRUCTURE FOR THE CHILDREN’S HOME CHILD CARE CENTER NETWORK

Financial Management (Financial tracking, banking and tuition management)

All fiscal and administrative services are coordinated, using the

same automated systems and reports. The Children’s Home is

responsible for:

n USDA Food Program management for all centers.

One USDA food claim is submitted each month on behalf

of all sites.

n Billing all funders. Bills are prepared by the Children’s

Home financial office; parent fees are collected at each site

by the Children’s Home management staff.

n Payroll for all sites. Each site has its own payroll and bank

account, but they are all maintained by the Children’s Home

financial office.

n Contract Negotiation. The Children’s Home CEO helps to

negotiate contracts with funders and serves as a liaison to

such funders as the United Way, Head Start and the County

Government.

n Fundraising. The Children’s Home central staff provide

leadership in fundraising, including grantwriting.

Quality Assurance and Professional Development

All sites use the Creative Curriculum and all are required to

participate in the Tennessee Quality Rating System (QRS).

STAR monitors conduct annual classroom assessments at

each site. The Children’s Home staff ensures, however, that each

site is prepared to succeed and therefore conducts informal

observations and assessments when necessary. (The top rating

in Tennessee’s QRS is three stars. Of the 10 programs that

participate in the Children’s Home network, two have received

a Three-Star rating and the remaining eight have a Two-Star

rating. The long-term goal is for all centers to achieve three stars.

Central staff conducts child assessments in all sites. Teacher

in-service training is frequently conducted with staff from all

10 sites. Additionally, the Children’s Home works closely with

the local child care resource agency and parent center to

coordinate training.

The Alliance does not have a formal system for substitutes,

however, the sites frequently share staff and are often able to

cover the need for substitutes internally.

Comprehensive services are not available at all sites, but staff

is available for consultation as needed.

Technology

All centers use ProCare software. Central staff provides training

in how to use the software.

Other Services and Support

The Children’s home collectively negotiates contracts to

cover the following services in all sites: liability, health and

disability insurance; maintenance and janitorial services,

supplies and equipment, food purchasing. (Each site maintains

its own kitchen.) Donations are frequently awarded on behalf

of the entire network.


MERAGE FOUNDATION: FAMILY HOME-BASED DAY CARE SCHEDULE OF PROJECTED OPERATING REVENUES, EXPENSES AND START-UP COSTS - CASH BASIS UNDER THE HYPOTHETICAL ASSUMPTIONS IN NOTES A AND B DURING THE FIRST YEAR OF OPERATIONS

First Year Projected Revenue and Expenses from Operations

Projected Revenue from operations:

Program Service Fees $ 108,700

Projected Expenses for operations:

Employee compensation and benefits: 163,150

Rent and occupancy 36,000

Insurances 6,500

Telephone and communications 4,000

Printing, copying, and newsletters 2,500

Marketing and program outreach 2,400

Licensing 2,250

Provider training and conference 2,000

Office supplies and postage 2,000

Accounting 1,500

Bank fees 1,200

Travel - mileage reimbursement 1,000

Criminal investigations 1,000

Payroll Processing fees 1,000

Miscellaneous 1,000

Dues, subscriptions and memberships 500

Provider Direct Assistance 500

Total projected expenses for operations 228,500

Projected Revenue required from other sources

for operations the first year $ 119,800

Projected Start-Up Costs

Equipment purchases 19,000

Software 38,000

Pre-opening marketing, community awareness, materials 25,000

Organization costs 9,000

Website development and hosting service 5,000

Deposits 3,000

Provider and Parent Start Packages 1,000

Total Projected Start-Up Costs 100,000

See accompanying summary of significant projection

assumptions and accounting policies. continuedonnextpage


MERAGE FOUNDATION: FAMILY HOME-BASED DAY CARE SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

NOTE A – Nature and Limitations of the Presentation

The accompanying financial projection for an organization

providing family home-based day care resource and referral is

based on hypothetical assumptions about operating revenues

and expenses, and start-up costs for the first year of operations.

Financial results of comparable start-up operations are not

available and prospective start-up costs, operating revenues

and expenses for such an organization are highly subjective.

The projection presents, to the best of the consultant’s

knowledge and belief, an organization’s expected start-up

costs and results of operations for the hypothetical projection

period. Accordingly, the projection reflects the consultant’s

judgment as of October 5, 2006, the date of this presentation,

of the expected conditions and its expected course of action

if the organization occurs.

The presentation is designed to provide information to assist

the task group in analyzing the feasibility of starting a system

of family home day care providers in Rhode Island and in

exploring the sustainability of such an organization for the

first year of operations under the assumptions listed in the

following notes. It should not be considered to be a

presentation of expected future start-up costs, operating

revenue and expenses. Accordingly, this presentation should

not be used for other purposes.

The assumptions disclosed herein are those that the consultant

believes are significant to the presentation. Even if the

organization occurs, there will usually be differences between

projected and actual results, because events and circumstances

frequently do not occur as expected, and those differences may

be material.

NOTE B – Organization and Nature of Operations

The system for family home-based day care providers resource

and referral is assumed to be formed as a non-profit corporation

in Rhode Island and will be exempt from federal income taxes

under provisions of section 501 ( c ) (3) of the Internal Revenue

Code. The Organization is assumed to be formed to provide

high quality, developmentally appropriate, affordable family

home-based day care for a Rhode Island community

providing training, resource and referral services for an initial

ten-independent, home-daycare providers as well as families

placing their children with these providers for home day care.

The Organization is also assumed to provide weekly provider

and parent orientations, monitoring of the family home day

care facilities through monthly site visits as well as monthly

new provider training.

The Organization will handle all administrative requirements

of each independent, home-day care provider associated with

the Organization. The major administrative activities will

include; resource and referral activities, proper licensing, insuring

health and safety requirements are met, monthly monitoring

of the homes, provider and parent orientation, child care

billings and collections, paying providers, provider training,

and marketing activities.

NOTE C – Basis of Accounting and Presentation

The accompanying projection has been prepared on the

cash basis method of accounting which differs from generally

accepted accounting principles.

NOTE D – Initial Funding Sources

The projection assumes that the Organization will receive

funding for start-up costs and first year of operations from

grants, parent fees, and state subsidy payments. The projection

assumes no loans or other financing sources will be utilized for

start-up costs and the initial year of operations.

NOTE E – Operating Revenues

The projection assumes the program service fees in the initial

year will include the revenues from administration of the

family home-based child care services. The service fees are

optimistically based upon an initial ten providers having 5 full-

time children in their homes paying monthly child care fees of

$950 for the entire year. The Organization will charge an initial

enrollment fee of $300/child and receive 16% of parent billings

as the program administration fee. Child care fees are paid on

the first of the month for which care is to be provided and

assumes all child care fees are paid currently. Additionally, each

provider will pay a one-time membership fee of $250 to cover

the administrative documentation, security, and licensing costs.

The initial year revenues are optimistically expected to total

$108,700, consisting of: child care resource and referral fees

totaling $91,200, child registration fees totaling $15,000, and

provider registration fees totaling $2,500.

continuedonnextpage



NOTE F – Personnel Compensation

The projection assumes that three employees are needed in the

first year of operations. A local sponsor will assume the hiring

cost and responsibility of hiring these three employees include

an executive director, child care specialist, and an accounting/

administrative person with initial salaries of $60,000, $45,000,

and $45,000, respectively. The board of directors of the

Organization will consist of volunteers. Employee compensation

is assumed to include only the benefits required by law which

include the following:

Payroll taxes:

Social Security and Medicare: 7.65%

Federal Unemployment: .08% of up to $7,000 annually

Rhode Island Employment Security: 2.34% of $16,000

annually per employee

Rhode Island Job Development Fund: 0.21% of $16,000

annually per employee

Workers Compensation Insurance: $0.80/$100 of salary

NOTE G – Rent and Occupancy

The projection assumes that office space adequate for three

employees having access to conference room space suitable for

parent and provider orientations and training can be acquired in

Rhode Island for approximately $3,000 per month. Office space

must be safe, well lit and have adequate access suitable for

parents with strollers, for instance; elevators and ramped parking

and sidewalks.

NOTE H – Other Initial Year Operating Expense Assumptions

The projection assumes the first year of operations will closely

approximate the usual operating expenditures of Infant Toddler

Family Day Care of Northern Virginia Inc. The significant

operating expenses have been scaled for the difference in

personnel and providers and families served. The following

summarizes significant assumptions for the projected

operating expense:

1. Insurances include:

a. Professional liability insurance covering the employees

of the Organization and providers associated with the

Organization. The anticipated cost of $1,000,000

coverage is approximately $5,000 consisting of a policy

fee of $500 and a rate of $7.22 per child per month.

b. General liability insurance is assumed to cost approximately

$1,000 annually.

c. Business asset insurance is assumed to cost approximately

$500 annually.

2. Telephone service is anticipated to be approximately $200

per month. Internet service is anticipated to be approximately

$80 per month. Toll calls are anticipated to be approximately

$640 for the year.

3. Printing and copying could vary widely depending upon

whether the organization will outsource this function, leases

or purchases a copier. The projection assumes the major

printing of standard documents will be outsourced and

other routine daily copies will be accomplished in-house.

These printing costs are anticipated to be approximately

$2,000 annually. Paper and toner for the in-house printing is

anticipated to be approximately $300 annually and a

quarterly newsletter is anticipated to be approximately

$200 annually.

4. Operational marketing and program outreach for the first

year of operations will be handled via the start-up costs,

however, the cost of telephone book listings, Internet listings,

etc. will be included in the operating expenses. These listings

are anticipated to be approximately $200 per month.

5. Licensing fees are expected to be paid by the Organization.

The anticipated licensing fees for the initial year are

anticipated to be approximately $2,250. The Department

of Children, Youth and Families Licensing Division fees have

been established at:

a. Child Placing Agency License – $1,000

b. Group Family Day Care Home License – $250

c. Family Day Care Home certification – $100

6. Provider training and conference includes the annual training

requirements for the providers. This service is assumed to be

paid by the Organization. The anticipated training conference

for the first year is anticipated to cost $2,000.

7. Office supplies and postage are assumed to be ratably higher

in the initial year of operations. These items are ongoing office

consumables anticipated to be approximately $2,000.

8. Accounting consists of the annual organizational filings

required by the IRS and state agencies including, but not

limited to the Form 990 and Forms 1099’s for the providers.

approximately $100 per month.

continuedonnextpage



9. Banking fees assume the Organization will attempt to set up

as many online banking functions as possible, including ACH

payments for provider pay. The fees are anticipated to be

approximately $100 per month.

10. Travel is anticipated to be predominantly mileage

reimbursement to employees at the Standard IRS Mileage

reimbursement rate. These reimbursements are anticipated

to be approximately $1,000 for the first year.

11. Criminal Investigations are generally required annually

for all employees, providers and provider’s household

members. The initial criminal history and child protective

services reports are anticipated to cost approximately

$1,000 for the first year.

12. Payroll processing is assumed to be outsourced to a third-

party payroll service. The service will provide all processing

and reporting requirements for three payroll employees

and is anticipated to cost $1,000 annually.

13. Dues, subscription and memberships in various related

organizations associated with day care and early childhood

development are anticipated to cost approximately

$500 annually.

14. Provider direct assistance may be required to insure any

low-income day care providers associated with the system

have all required equipment to pass health and safety

regulations and/or adequate safe, age-appropriate

developmental equipment for their day care children.

The child care specialist may also provide certain equipment

or items necessary for a monthly activity during the

monitoring visit. These items are assumed to require

approximately $500 in the first year of operations.

15. Miscellaneous expenses of $1,000 are assumed to be

needed for any unexpected expenditures needed during

the initial year.

NOTE I – Start-Up Costs

The projection assumes the following expenditures will be

anticipated to start the Organization:

1. Office furniture and equipment is assumed to be needed

as follows:

a. Desks and chairs at an anticipated cost of

approximately $1,500

b. Three computers including set up and installation

is anticipated to cost approximately $8,500

c. Telephone system including installation is anticipated to

cost approximately $5,000

d. Conference room furniture and equipment for provider

and parent orientations as well as provider training is

anticipated to cost approximately $2,000

e. Other miscellaneous office equipment and furniture

such as a multi-function machine, postage meter,

calculators, file cabinets, etc. is anticipated to cost

approximately $2,000.

2. Software for contact management database, accounting

and other program development packages can vary greatly

in cost and ability to integrate. The consultants assumed

the software to be purchased would be an integrated

contact management database and accounting package

which integrates all provider and parent information to

avoid redundancies of data entry and has e-commerce

capabilities. The anticipated costs were based upon the costs

for a similar system developed for Infant Toddler Family Day

Care of Northern Virginia, Inc. of approximately $36,000

which includes licensing, installation and set up. Additionally,

various other software packages would be required to

create newsletters, develop child activities and increase

efficiency. These additional software licenses for three users

are anticipated to cost approximately $2,000.

3. Pre-opening marketing and community awareness,

brochures, logo development along with printed materials

including stationery are anticipated to be outsourced to

a professional firm at a cost of approximately $25,000.

4. Organization costs are assumed to include the following:

a. Legal and accounting fees for incorporation, state

and local registration and Internal Revenue Service

filings for classification as a 501 ( c ) (3) are anticipated

to be approximately $8,000.

b. Development of provider and parent agreement

including the legal review are anticipated to be

approximately $1,000.

5. Website development and hosting services are anticipated to

cost approximately $5,000.

6. Deposits for leased space is anticipated to be one month’s

rent, $3,000.

7. Provider and Parent Start Package development, design, and

printing are anticipated to cost approximately $1,000.


SAMPLE

CENTRE FOR SOCIAL INNOVATION STANDARD SUB-LEASE TO TENANTS

The following information details the specific sub-lease agreement between the named parties.

1. Sub-lessor: Centre for Social Innovation, a non-profit corporation registered in Ontario

2. Sub-lessee:

3. Sub-lessee name for

promotional activity

4. Name of individual

responsible for billing

and oversight

5. Name and email address of

individual using the space

6. Move-in date:

7. Rent start date:

8. Term of sub-lease: One year sub-lease expiring on [ DATE ]

9. Termination of sub-lease: If for any reason the Sub-lessee wishes to leave the Centre before the sub-lease expiry date,

the Sub-lessee may bring their case to the Sub-lessor. If it is mutually agreeable to both parties,

the Sub-lessor may select to release the Sub-lessee of their sub-lease obligations.

Notice will be given at least 60 days in advance of any changes in the sub-lease agreement.

10. Rental area of premises Suite #. This rent also includes access to the common space areas.

11. Annual base rent The Sub-lessee agrees to pay $ per year for the rental of the space in the Centre for

Social Innovation.

12. Monthly base rent $ per month payable in advance on the first day of each month. GST will be billed in addition

to this base rent. Sub-lessees are requested to pay with post-dated cheques.

13. Security deposit The Sub-lessee agrees to pay a Security deposit in the amount of $, payable in advance of the

first day of the sub-lease. This security deposit is held by the Head Lease holder as security

for the due performance of the sub-lease agreement. This amount, less any costs for repair

of damages to the premises by the Sub-lessee, will be returned to the Sub-lessee at the

termination of the sub-lease.

14. Set-up fee The Sub-lessee agrees to pay a one time Set-up fee of $, payable in advance of the first day of

the sub-lease. This amount covers the administrative work required to set up access to the

Centre as well as the costs of signage. $ of this amount will be returned to the Sub-lessee at

the termination of the sub-lease if all keys and pass-cards are returned.

15. Additional rent – Refer to Exhibit C for a list of Centre for Social Innovation shared amenities.

Basic shared amenities Shared amenities have been established at a rate of $ per month plus GST and will be paid in

advance with the rent.

NOTE: Local and state law on

commercial leases vary widely.

Be sure to consult a local lawyer to

adapt this and other sample lease

agreements to fit your needs.


> Find this sample document and more at www.nonprofitcenters.org/shared-services-guide.


SAMPLE


16. Additional amenities The Sub-lessee understands that the cost of variable and additional amenities, such as meeting

room usage in excess of the sub-lease agreement, and any long distance or photocopy charges

incurred, will be billed monthly and payable upon receipt, separate from this agreement.

Photocopies and printing will be charged at a cost of $0.05 per page in black & white and $0.20

per page in color. Long-distance expenses will be charged based on actual long-distance costs,

with a North American long-distance fee of $0.03/minute.

17. Taxes The Goods and Services Tax (GST) must be paid additionally on all rent, set-up fees, shared

amenities and other expenses as approved by the Sub-lessor and the Sub-lessee.

18. Meeting rooms The Sub-lessee is entitled to X hours per month for usage of meeting room space. Refer to

Exhibit C for additional information.

19. Promotion and branding The Sub-lessee will permit the Sub-lessor to use its name in promotional materials and to

otherwise identify its association with the Centre for Social Innovation. The Sub-lessee is

requested to adopt the following standard for the presentation of its address:

NAME

@ Centre for Social Innovation

215 Spadina Avenue

Toronto, ON M5T 2C7

Sub-lessor’s Address for Notice Sub-lessee’s Address for Notice

20. The Sub-lessee is bound by the terms of the Head Lease held between the Centre for Social Innovation and Urbanspace Property

Group. Urbanspace Property Group and the Centre for Social Innovation are working collaboratively to establish a successful joint

venture at the J.A.S. Robertson Building in the form of the Centre for Social Innovation. Communication between Urbanspace

Property Group and the Centre for Social Innovation with regard to building management and building maintenance issues will

be shared with the Sub-lessors as available. The Sub-lessee will not do or omit to do anything that may breach the Sub-lessors

obligations as a tenant of the Head Lease. The terms and conditions of the head lease are outlined in Exhibit A.

21. Should the Head Lease holder increase the additional rent paid by the Sub-lessee (Centre for Social Innovation) section 4.07 of

the Head Lease, this increase will be distributed proportionately among the sub-lease holders. The Centre for Social innovation

will provide 60 days notice of any such change.

22. The Sub-lessee will take all reasonable precautions to ensure the security of the building, the Centre for Social Innovation and

the individual suites. The Centre for Social Innovation is a cooperative co-location work space that is premised on the spirit of

community and neighbourhood watch.

23. The Sub-lessor reserves the right to terminate the sub-lease agreement with 60 days notice if the Sub-lessee fails to pay rent, fails

to honour the terms of this agreement and for any other substantive reason, provided that both parties have attempted and failed

to reach a resolution.

24. The Sub-lessor will hold property and liability insurance as befitting to protect its interests, and its interests solely, as outlined in

the stipulations with the Head Lease agreement. The Sub-lessor will not carry contents insurance to protect the property of the

Sub-lessees, and is in no way responsible for any such damages to Sub-lessee’s property, or property belonging to agents, officers,

trustees and employees of the Sub-lessee. Further, the Sub-lessee agrees under this sub-lease agreement to hold the Sub-lessor

harmless in the event of any damage caused to the Sub-lessee’s property.


SAMPLE


25. It is the responsibility of the individual Sub-lessee to carry its own contents and liability insurance. The Sub-lessor also requires

that each tenant provide proof, in certificate form, of this insurance, and that this certificate show the operations that the Sub-lessee

will carry out, the Centre for Social Innovation as Certificate Holder and the Centre for Social Innovation as an additional insured.

26. The sub-leased premises shall be used by the Sub-lessee for the administration and management of their social mission

organization and for no other reason without express permission of the Sub-lessor.

27. The Sub-lessee agrees to adhere to the latest version of the Centre for Social Innovation (CSI) Tenant Cooperation Policies.

See Exhibit B, updated January 2007. Updates to the CSI Tenant Cooperation Policies will be made as necessary by the CSI Board

of Directors upon the recommendations of the Tenant Committee. The Board will seek at least 75% agreement from the tenants

before new policies are put into effect.

28. The Sub-lessee may not transfer this sub-lease agreement and may not sub-let their space to any other party without the

written approval of the Sub-lessor and the head Sub-lessor. Consideration of sub-lease agreement transfer will not be

unreasonably withheld.

29. The Sub-lessee is responsible for leaving the suite as it was found. Repairs as a result of damage to the space by the Sub-lessee

upon termination of the sub-lease will be deducted from the security deposit.

30. The Sub-lessor reserves the right to dispose of any goods without liability if the sub-lease is terminated and the goods are not

removed within 30 days.

31. Both parties will do their best to implement the true intent of this sub-lease.

Exhibit A Head Lease between Urbanspace Property Group (the Robertson Building) and The Centre for Social Innovation

Exhibit B Centre for Social Innovation Tenant Cooperation Policies UpdatedJanuary2007

Exhibit C Centre for Social Innovation Shared Amenities list.

The undersigned agree to the terms and conditions outlined herein and the attached exhibits.

Sub-lessor: Sub-lessee:

NAME, Executive Director NAME

For the Centre for Social Innovation ADDRESS

215 Spadina Ave, Suite 120

Toronto, ON M5T 2C7

Signature Signature

Date Date


2008 LETTER OF AGREEMENT BETWEEN TIDES, INC. AND PARTNER ORGANIZATION

This Agreement is made between PARTNER ORGANIZATION (“Client Partner”), with a principal place of business at ADDRESS and

Tides, Inc. (“Consulting Partner”), with a principal place of business at ADDRESS. This Agreement will become effective when

signed by both parties and will continue until terminated by either party; provided however that Exhibit C shall be updated annually

by mutual agreement.

1. Services Performed by Consulting Partner

Consulting Partner agrees to provide the services described in Exhibits A – B, which are attached to and made part of this

Agreement.

2. Consulting Partner’s Invoices and Payment

Client Partner shall pay Consulting Partner annual fees (for Tides, Inc. Network Services) in 12 monthly installments according to

the payment schedules described in Exhibit C, which is attached to and made part of this Agreement. Consulting Partner’s

Annual Fees shall be mutually assessed on an annual basis between Client Partner and Consulting Partner and billed to Client

Partner in advance.

The monthly fees may be adjusted at midyear depending on a variety of circumstances; including executive decisions regarding

Tides Network expense budgets and cost sharing as well as headcount fluctuations across the Tides Network (see Headcount

Methodology Memo). Service, and Special Allocations, Fees are due and payable the first day of the month that service is rendered.

Client Partner shall pay Consulting Partner fees for Allocated Operating Expenses, which include but are not limited to work

supplies, equipment, vendors, and travel costs – all of which directly benefit the Client Partner’s business operations. Consulting

Partner shall submit monthly invoices for all Allocated Operating Expenses incurred on their behalf. Monthly invoices will

provide partial detail of Operating Expenses. Upon Client Partner’s request Consulting Partner will furnish full detail of

Operating Expenses.

Client Partner shall pay the amounts due upon receipt of invoice for Allocated Operating Expenses. These expenses will be billed to

Client Partner after being paid by Consulting Partner.

3. Confidentiality

Consulting Partner will use reasonable care to prevent the unauthorized use or dissemination of Client Partner’s confidential

information. Reasonable care means at least the same degree of care Consulting Partner uses to protect its own confidential

information from unauthorized disclosure.

Each Tides, Inc. employee will sign separate “Tides Confidentiality Agreements” which will apply to confidential information across

the entire Tides Network.

Confidential information does not include information that:

• Consulting Partner knew before Client Partner disclosed it

• is or becomes public knowledge through no fault of Consulting Partner

• Consulting Partner obtains from sources other than Client Partner who owe no duty of confidentiality to Client Partner, or

• Consulting Partner independently develops.

4. Contract Changes

Client Partner and Consulting Partner recognize that:

If any event occurs beyond the parties’ control require adjustments to this Agreement, the parties shall make a good faith effort to

agree on all necessary details. Such agreements shall be put in writing, signed by the parties and added to this Agreement.


2008 LETTER OF AGREEMENT BETWEEN TIDES, INC. AND PARTNER ORGANIZATION

5. Disputes

Any dispute between Client Partner and Consulting Partner about the failure of one or both parties to carry out the terms of this

agreement should be resolved by both parties acting in good faith. Any unresolved disputes will be decided by the CEO of

Tides Network, who has authority over the working relationship between the two parties.

(Client Partner): Tides, Inc. (Consulting Partner):

(Signature) (Signature)

(Typed or Printed Name) (Typed or Printed Name)

(Title) (Title)

Name Name

Managing Director Managing Director

Date Date


> NOTE: Shared services agreements and other sample documents are available for download

at www.nonprofitcenters.org/shared-services-guide.


APPENDIX A – TIDES SHARED COST MODEL 1. Introduction

In 2003 Tides, Inc. (“TINC”) and its partners (“Partners”) agreed to implement the cost sharing model described below in an effort

to improve accountability and offer new cost control options for Partners. Partners include NAMES OF PARTNER ORGANIZATIONS.

TINC is committed to developing a model that provides Partners the greatest ability possible to manage costs and utilize those

services needed for each individual organization and Tides as a whole to thrive.

2. Budget Structure

The monies exchanged between TINC and Partners are accounted for within two budgets: Services and Operating Definitions

of each follow.

2.1. Services Budget

The Services Budget accounts for the costs to provide Shared Activities in order to provide Administrative, Finance, HR and IT

services to Partners. Under the model, the Services Budget is comprised of two primary categories, Common and Flexible, each of

which contain two sub-categories:

A. Common – those services that benefit all Tides organizations in proportion to headcount.

i. Basic Services - recurring services, e.g., email, Internet connectivity, telecommunications, employee relations, Network

internal communications, as well as indirect costs required to administer TINC

ii. Tides-Wide Projects – one-time projects and initiatives to implement new shared infrastructure, process and services

B. Flexible – those services that Partners independently decide to contract from TINC.

i. Dedicated Services – recurring services, e.g., records administration, organizational specific web content updates, recruiting

ii. Organizational Projects – one-time projects for the benefit of a single partner, e.g., web site redesign, software upgrade.

The Services Budget is also organized according to Service Area: Administrative, Finance, HR, IT and General.

For a detailed list of the services TINC will offer to Partner annually see Appendix B – Service List.

2.2. Shared Operating Budget

The Shared Operating Budget is used to plan and account for buying tangible property or third-party services. This budget

contains all Tides-Wide purchases made by TINC to develop a common set of resources for Tides as a whole to conduct business.

Shared Operating expenses benefit multiple partners and are apportioned to each benefiting partner based on the allocation

method that best reflects actual or anticipated usage.

2.3. Direct Operating Expense Guidance

Direct Operating Expenses are incurred when TINC procures goods or services at the request of a single Partner for the sole

benefit of the requesting partner. Because these are 100% pass-through costs, TINC attempts to provide guidance on the

expense to be budgeted for these items, however, each Partner is responsible for representing direct expenses within its own

operating budget.

3. Reporting

Because regular customer reporting is critical for ensuring appropriate oversight, planning and accountability, TINC will implement

regular reporting to show service delivery in terms of actual vs. budget hours. We will strive to provide these reports quarterly.

At a minimum the regular reports will include:

• Budgeted hours - billing period, year-to-date, total for the year and remaining for the year

• Actual hours - billing period and year-to-date

• Budget to actual variance - billing period and year-to-date

4. Statement of Risk

TINC will use best efforts within the constraints of the annual budget to support this cost sharing model. There are risks attendant

with operating this model. Accordingly, TINC may not be able to adequately support the scope and timeliness of information

reporting needed. Following is a list of specific risks to consider. All parties will work with best efforts to make the model work.


APPENDIX B – SERVICE LIST FLEXIBLE

Administrative

Clerical Support

Credit Management

Facilities

Insurance

Records Management

Strategic Administrative Consulting

Finance

Accounting

Budget and Treasury Management

Financial Audit

Financial Services Consulting

General

Strategic Consulting

Human Resources

HR Consulting

Recruiting

Information Technology

Application Development

Strategic Technology Consulting


Technical Training

Telecom

COMMON

Administrative

Clerical Support

Credit Management

Facilities

Front Office

Insurance

Communications

Internal Communications

Marketing

Public Relations

General

Procurement

Self-Service

Strategic Consulting

User Coordination

Human Resources1

General HR Support

HR Policy and Compliance

New Hire / Termination Coordination

Information Technology

Application Development

Strategic Technology Consulting


Technical Support

Technical Training

Telecom


> NOTE: Shared services agreements and other sample documents are available for download

at www.nonprofitcenters.org/shared-services-guide.


UNITED COMMUNITY SERVICES CO-OP Incorporated under the Co-operative Association Act of British Columbia Incorporation # CP1790, October 7, 1998

APPLICATION FOR MEMBERSHIP AND SUBSCRIPTION OF SHARES

(Name of applicant organization)

as the applicant, hereby applies for membership in the United Community Services Cooperative and subscribes for the purchase of

2 shares in the capital stock of the Co-op in accordance with the terms and conditions of the Co-op’s Rules.

The applicant tenders the sum of $100.00 on account for the payment of the shares subscribed for and agrees to make payment for

additional shares as set out in the Co-op Rules as the Board of Directors may from time to time call for. The applicant agrees that the

failure to make such payment may be considered as an application to withdraw from the Association.

The applicant acknowledges receipt of a copy of the Rules of the Co-op and agrees to be bound by the Memorandum and Rules of the

Co-op, if the Co-op accepts it as a member. The applicant’s last audited yearly financial statements are attached.

The applicant appoints ________________________________________________________________________________________ as its

representative, until further written notice, to the Co-op.

Dated at _________________________________________________________________________________________________(city), BC

On __________ (day) of ____________________________ (month) ____________ (year)

_______________________________________ (Signature of applicant’s representative)

_______________________________________ (Title, relationship to applicant)

Attached

_______ $100.00 cheque for two Membership Shares

_______ Copy of latest Audited Financial Statement


CHILDREN AND FAMILY SERVICES CENTER SERVICES AGREEMENT

This Services Agreement (the “Agreement”) is entered into as of _______________, 2008, by and between CFSC SHARED SERVICES,

LLC, a North Carolina limited liability company (“Service Provider”), and ______________________, a ___________________ (“Agency”).

Preliminary Statement

Children and Family Services Center, Inc. (“CFSC”) is a not-for-profit corporation organized and existing pursuant to the laws of the

State of North Carolina. CFSC owns and operates the Carol Grotnes Belk Children and Family Center, situated on the land owned by

the City of Charlotte at 601 East 5th Street in the City of Charlotte, North Carolina 28202 (the “Building”). CFSC was organized for the

purpose of owning and operating the Building, leasing space in the Building at below-market rents to non-profit social service agencies

whose missions are focused on serving families and children in the greater Charlotte, North Carolina region (collectively, the “Building

Agencies”), and facilitating collaboration among the Building Agencies in both programs and back-office services. CFSC and Agency

have entered into a lease agreement dated [date] and [an] amendment[s] to the lease agreement dated [date] (collectively, the “Lease”),

pursuant to which Agency occupies office space in the Building as a Building Agency and enjoys the use of common areas, as well as

use of shared telephone and computer systems chosen and developed by CFSC in collaboration with the Building Agencies. As result

of CFSC’s mission to foster collaboration in back-office services, CFSC organized Service Provider, a wholly-owned subsidiary of CFSC, to

provide certain Services (defined below) to those Building Agencies that have elected to contract with Service Provider for the provision

of such Services (the “Participating Agencies”) for the benefit of the Participating Agencies and their clients. Agency, by a vote of its board

of directors, has determined that obtaining the Services from Service Provider is in the best interests of Agency, and consequently, Service

Provider and Agency are entering into this Agreement to set forth the terms and conditions regarding the provision of such Services.

Statement of Agreement

NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein and for other good and valuable

consideration, the receipt and sufficiency of which is hereby acknowledged, Service Provider and Agency agree as follows:

1. Services.

(a) DescriptionofServices. Subject to the terms and conditions of this Agreement, Service Provider agrees to provide the

following services to the Agency (collectively, the “Services”):

(i) Those certain human resources functions described on Exhibit A attached hereto (the “HR Services”); and

(ii) Those certain financial services described on Exhibit B attached hereto (the “Financial Services”).

(b) Expansion/ContractionofServices. Notwithstanding anything in this Agreement to the contrary, Service Provider reserves

the right to add or eliminate certain Services to be provided to Agency and the other Participating Agencies. Service Provider agrees

to seek input from the Participating Agencies in determining the scope of Services to be provided to the Participating Agencies, but

the final determination as to the Services to be provided shall be in Service Provider’s sole discretion. Service Provider agrees to

provide written notice to each Agency of any changes to the Services provided under this Agreement as soon as practical under the

circumstances.

(c) AgencySpecificServices. Service Provider reserves the right, in its sole discretion, to provide certain services (the “Agency

Specific Services”) to one or more Participating Agencies that are not offered to all Participating Agencies.

(d) Exclusivity. Agency agrees that it shall not seek any of the Services offered by Service Provider to Agency from any third

party, unless such Services have been terminated hereunder. To the extent that Agency has an existing third-party contract in place

for certain services at the time that Service Provider begins to provide such Services (an “Existing Service Contract”), Agency shall be

permitted to continue to obtain such services under such Existing Service Contract, but Agency agrees to terminate such Existing

Service Contract as soon as Agency is permitted to do so without incurring any penalty and agrees not to renew such Existing

Service Contract. Agency shall not receive any credit or reduction in Monthly Service Fees (as defined below) as a result of a third

party providing services pursuant to an Existing Service Contract.


> Find this sample document and more at www.nonprofitcenters.org/shared-services-guide.


CHILDREN AND FAMILY SERVICES CENTER SERVICES AGREEMENT 2. Term of Agreement. This Agreement shall commence on January 1, 2009 and shall end upon the sooner of (i) expiration

or termination of the Lease and (ii) termination hereunder pursuant to Section 6 or 7, as applicable (the “Term”). In the event Agency

exercises its options to renew the term of the Lease, this Agreement shall be extended automatically for a period coterminous with

the Lease. Notwithstanding the foregoing, Agency acknowledges and agrees that Service Provider may not provide all of the Services

beginning on January 1, 2009. Service Provider agrees to use commercially reasonable efforts to commence the Services as soon as

practicable.

3. Fees.

(a) Definitions.

(i) “Agency’s Proportionate Share” shall mean that percentage of the Service Costs for which the Agency shall be

responsible for reimbursing Service Provider. Service Provider and Agency acknowledge and agree that, as of January 1, 2009,

the Agency’s Proportionate Share shall be _______________ (___%)with respect to HR Services and _______________ (___%)

with respect to Financial Services. Agency’s Proportionate Share and the proportionate share of Service Costs to be paid by the

other Participating Agencies as of January 1, 2009 are set forth in the table attached hereto as Exhibit C (the “Allocation Table”).

Service Provider has the right to recalculate each Participating Agency’s Proportionate Share either on a periodic basis or if

Service Provider determines in good faith that such recalculation is necessary as a result of circumstances that may have

materially altered each Participating Agency’s proportionate share of the Service Costs. If Service Provider recalculates the

Agency’s Proportionate Share, Service Provider shall notify Agency in writing of the revised Agency’s Proportionate Share as set

forth in Section 3(c) below.

(ii) “Agency Specific Service Costs” shall mean the total costs expended by Service Provider (other than the Excluded

Costs) in providing Agency Specific Services, if any, to Agency.

(iii) “Excluded Costs” shall mean (A) costs reimbursed by insurance proceeds, warranties or any third parties, (B) collection

costs and legal fees paid in disputes with other Participating Agencies, (C) amounts payable by Service Provider which

constitute a fine, interest or penalty that are not payable as a result of any act or omission of Agency, and (D) the costs to

implement the provision of the Services detailed on Exhibit D attached hereto.

(iv) “Service Costs” shall mean the total costs of whatever nature (other than the Excluded Costs) incurred by Service

Provider in providing the Services to the Participating Agencies. The Service Costs include, without limitation, the cost of the

wages, salaries and benefits of the personnel hired by or contracted for by Service Provider, the cost of all contracts entered

into by Service Provider in connection with the Services, the costs related to equipment utilized by Service Provider in

connection with the Services, the costs related to Vendor Software (as defined below), the cost of rent and common area

expenses of the space occupied by Service Provider in the Building, costs to maintain and operate the entity that is Service

Provider, any sales, use, consumption, service, personal property, value-added or other taxes assessed in connection with the

Services, and any other expenses incurred by Service Provider in connection with the Services.

(b) PaymentofMonthlyServiceFees. Commencing on April 1, 2009 and for the remainder of the Term, Agency shall pay to

Service Provider the Agency’s Proportionate Share of the Service Costs as provided herein. On or before November 30th of each

calendar year during the Term, or as soon thereafter as practicable, Service Provider will reasonably estimate the Service Costs for

the following calendar year and advise Agency in writing (the “Annual Estimate”) of the Agency’s Proportionate Share of such

estimated Service Costs, including a breakdown of Agency’s Proportionate Share of Service Costs related to both HR Services and

Financial Services. The annual estimated amount of Agency’s Proportionate Share of the Service Costs set forth in the Annual

Estimate shall be payable to Service Provider in equal monthly installments (the “Monthly Service Fees”), in advance, on the first

(1st) day of each calendar month, without notice, demand, deduction or set-off. Notwithstanding the foregoing, any failure by

Service Provider to deliver the Annual Estimate by November 30th of any calendar year shall not relieve Agency of its obligation to

continue to pay Agency’s Proportionate Share of the Service Costs at the rate then in effect under this Agreement, and if Agency

receives such Annual Estimate from Service Provider after the beginning of the calendar year in which the Annual Estimate applies,


CHILDREN AND FAMILY SERVICES CENTER SERVICES AGREEMENT Agency shall pay any increases in Agency’s Proportionate Share of the Service Costs reflected thereby retroactive to the

previous January 1 on the first day of the calendar month that occurs not less than thirty (30) days from the date that Agency

receives such statement, and Service Provider agrees to credit any reductions in Agency’s Proportionate Share of the Service Costs

reflected thereby retroactive to the previous January 1 against the first Monthly Service Fee due from Agency that occurs ten (10)

days after Agency’s receipt of the Annual Estimate.

(c) AdjustmentofAgency’sProportionateShare. If Service Provider determines in good faith that the Annual Estimate should

be revised prior to distribution of the Annual Estimate for the subsequent year, Service Provider shall have the right to recalculate

the Agency’s Proportionate Share of the Service Costs set forth in the Annual Notice by written notice (each, an “Adjustment

Notice”) to Agency setting forth Agency’s revised Proportionate Share of the Service Costs (including a breakdown of Agency’s

Proportionate Share of Service Costs related to both HR Services and Financial Services) and the date (the “Adjustment Date”) such

revised Agency’s Proportionate Share shall become effective for purposes of calculating the Monthly Service Fees. Service Provider

agrees that the Adjustment Date shall occur on the first day of a calendar month and shall not occur less than ten (10) days from the

date that Agency receives the Adjustment Notice.

(d) Reconciliation. As soon as reasonably practicable after the end of each calendar year, Service Provider will furnish to Agency a

statement showing in reasonable detail the actual amount of Service Costs and the Agency’s Proportionate Share of such actual

Service Costs for the preceding calendar year. Any deficit will be paid by Agency within sixty (60) days after demand by Service

Provider. In the absence of a default by Agency hereunder, any surplus will be credited to Agency’s next payment or, if the term has

expired prior to such reconciliation, refunded to Tenant within ninety (90) days after Service Provider determines the actual Service

Costs for the prior calendar year.

(e) Cap on First Year Service Costs. Notwithstanding anything to the contrary in this Agreement, Service Provider and Agency

acknowledge and agree that the aggregate amount of Monthly Service Fees payable by Agency to Service Provider shall not exceed

_______________ and No/100 Dollars ($__________)between April 1, 2009 and March 30, 2010.

(f) PaymentofAgencySpecificServiceCosts. If Service Provider agrees to provide any Agency Specific Services to Agency, Agency

and Service Provider shall enter into an amendment to this Agreement or a separate written agreement to memorialize the

obligations of Service Provider and Agency with respect to such Agency Specific Services.

4. Obligations Related to Provision of Services.

(a) Service Provider. Service Provider agrees that the Services performed by Service Provider shall be performed by qualified

personnel exercising a degree of skill which would reasonably be expected from a third party service provider that is engaged in the

same type of service in the Charlotte metropolitan area and under the same or similar circumstances and conditions; provided,

however, the foregoing does not imply a higher standard of care for Service Provider than that which may be applicable to a

commercial provider of the applicable Services. At its sole discretion, Service Provider may provide certain Services through

third party vendors (each, a “Vendor”) selected by Service Provider in good faith. Additionally, Service Provider agrees to use

commercially reasonable efforts to cooperate with any third party performing services for Agency (including, without limitation,

Agency’s auditor) related to any of the Services or Agency Specific Services being provided by Service Provider, subject to such third

party executing a confidentiality agreement or other agreements reasonably required by Service Provider.

(b) Agency. Agency agrees to cooperate with Service Provider in any way reasonably necessary to facilitate the provision of

Services under this Agreement, including but not limited to: (i) providing any and all financial information reasonably required

by Service Provider to perform the Services requested by Agency in a timely manner; (ii) providing Service Provider with the names

of each employee of the Agency as of January 1, 2009; (iii) promptly updating Service Provider upon the addition or removal of

Agency employees; (iv) providing any and all information necessary to determine the Agency’s Proportionate Share in a timely

manner; and (v) complying with the rules and guidelines established by Service Provider or any Vendor in connection with the

Services to the extent that Service Provider notifies Agency of such rules and guidelines in writing. AGENCY ACKNOWLEDGES

THAT SERVICE PROVIDER MAY NOT BE ABLE TO PROVIDE THE SAME SERVICES PROVIDED TO OTHER PARTICIPATING AGENCIES IF


CHILDREN AND FAMILY SERVICES CENTER SERVICES AGREEMENT AGENCY FAILS TO PROVIDE INFORMATION OR OTHERWISE FAILS TO COOPERATE WITH SERVICE PROVIDER AS IS NECESSARY TO

PERFORM UNDER THIS AGREEMENT.

5. Records and Audit. Service Provider agrees to maintain books of record and account, recording the quantities and costs

of Services provided by Service Provider to Agency under this Agreement. Service Provider agrees to maintain financial statements,

records, accounts, back-up support and original documentation that is adequate to fairly reflect the accuracy of the Services provided

under this Agreement and to comply with applicable law. From time to time as agreed by the parties, Agency, at its sole cost, shall have

the right to have an independent certified public accounting firm mutually agreed upon by the parties, audit Service Provider’s books

of account and other records pertaining to a dispute arising from the Services provided under this Agreement for a period of one (1)

year following the end of the calendar year in which the disputed Services were rendered. Upon completing its audit, such certified

public accounting firm shall give an opinion on the accuracy of the Services and related financial statements, records and accounts.

Notwithstanding the above rights, Service Provider shall have the right to redact, from auditable records, information that is unrelated

to the provision of Services to Agency. Service Provider agrees to use reasonable efforts to cause any Vendor to act in accordance with

the provisions of this Section 5 to the extent commercially reasonable.

6. Service Provider Event of Default. Service Provider shall be in default hereunder in the event Service Provider has not begun

and pursued with reasonable diligence the cure of any failure of Service Provider to meet its obligations hereunder within thirty (30)

days of receipt by Service Provider of written notice from Agency of the alleged failure to perform; provided, however, if the default is

non monetary and of a nature which cannot reasonably be cured within such thirty (30) day period, then Service Provider shall have a

reasonable time to cure such default if commenced promptly and pursued with reasonable diligence. If Service Provider fails to timely

cure such default, Agency’s sole and exclusive remedy will be to terminate this Agreement and sue Service Provider for damages, such

rights and remedies being subject to the limitation of liability set forth in Section 9 below. Agency acknowledges that a breach of the

Lease by CFSC shall not be a default of Service Provider under this Agreement.

7. Agency Event of Default and Service Provider Remedies. The occurrence of one or more of the following events (each,

an “Agency Event of Default”) shall constitute a default by Agency: (a) failure to pay the Monthly Service Fee, Agency Specific Service

Costs or any other sum due under this Agreement within ten (10) days after written notice of failure of payment; (b) failure to perform

any other provision of this Agreement if the failure to perform is not cured within thirty (30) days after written notice thereof has been

given to Agency, provided, however, if such default cannot reasonably be cured within such thirty (30) days, then a default shall not

exist so long as Agency commences to cure such default within such thirty (30) day period and thereafter diligently pursues such cure to

completion; and (c) the occurrence of an event of default under the Lease beyond any applicable cure period. Upon an Agency Event

of Default, Service Provider shall have all rights and remedies available at law or in equity including, without limitation, the right to

terminate this Agreement, such rights and remedies begin subject to the limitation of liability set forth in Section 9 below.

8. Insurance/Waiver of Subrogation. During the Term, Agency will carry such insurance as required under the Lease.

During the Term, Service Provider will carry the following insurance with coverage amounts Service Provider deems reasonable in its

sole discretion: (i) commercial general liability insurance having minimum coverage amounts of $1,000,000 per occurrence, subject to a

$2,000,000 annual aggregate; (ii) crime/fidelity bond insurance in an amount of not less than $1,000,000 covering the dishonest acts of

Service Provider’s employees or Service Provider’s Agents performing under this Agreement; and (iii) errors and omissions/professional

liability insurance in an amount of not less than $1,000,000 per claim. Agent and Service Provider waive all rights of subrogation against

the other party, its directors, officers, employees, affiliates and successors to the extent that the insurance policies required to be carried

by this Agreement will recognize such waiver of rights. Upon written request from Agency, Service Provider shall deliver certificates of

insurance evidencing the insurance required hereunder.

9. Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE,

EXEMPLARY OR SPECIAL DAMAGES (INCLUDING WITHOUT LIMITATION LOST PROFITS), HOWEVER CAUSED AND BASED ON ANY THEORY

OF LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT, EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH

DAMAGES. IN NO EVENT SHALL THE AGGREGATE LIABILITY OF EITHER PARTY TO THE OTHER PARTY UNDER THIS AGREEMENT EXCEED


CHILDREN AND FAMILY SERVICES CENTER SERVICES AGREEMENT THE AGGREGATE AMOUNT OF MONTHLY SERVICE FEES PAID BY AGENCY FOR THE SERVICES AND THE AMOUNT OF FEES PAID FOR

AGENCY SPECIFIC SERVICE COSTS BY AGENCY. THE LIMITATIONS SET OUT IN THIS SECTION WILL APPLY IRRESPECTIVE OF THE NATURE

OF THE CAUSE OF ACTION, DAMAGE OR CLAIM, INCLUDING BREACH OF CONTRACT, WARRANTY, CONDITION, NEGLIGENCE, TORT OR

ANY OTHER LEGAL THEORY, AND WILL SURVIVE A FUNDAMENTAL BREACH AND/OR FAILURE OF THE ESSENTIAL PURPOSE OF THIS

AGREEMENT OR OF ANY REMEDY CONTAINED HEREIN. AGENCY FURTHER ACKNOWLEDGES THAT CFSC SHALL HAVE NO LIABILITY FOR

THE ACTS OF SERVICE PROVIDER, AND AGENCY HEREBY RELEASES AND WAIVES ALL CLAIMS AGAINST CFSC FOR INJURY OR DAMAGE

(OF EVERY TYPE AND NATURE INCLUDING, WITHOUT LIMITATION, CONSEQUENTIAL DAMAGES) TO PERSON, PROPERTY OR BUSINESS

RELATED TO THE SERVICES OR AGENCY SPECIFIC SERVICES. THE PROVISIONS OF THIS SECTION 9 SHALL SURVIVE THE TERMINATION OR

EXPIRATION OF THIS AGREEMENT AND REMAIN IN FULL FORCE AND EFFECT INDEFINITELY.

10. Assignment. Agency agrees that neither this Agreement nor any right or obligation hereunder is assignable or transferable

in whole or in part without the prior written consent of Service Provider and that any such purported assignment without such consent

shall be void. Agency further acknowledges that Service Provider will not consent to any assignment of this Agreement or of any right

or obligation hereunder unless it is assigned to a not-for-profit organization that has entered into a lease agreement with CFSC to be a

Participating Agency in the Building.

11. Intellectual Property, Ownership of Data and Confidentiality.

(a) DefinedTerms. For purposes of this Agreement, the terms set forth below shall have the following meanings:

(i) “Agency Data” shall mean all data and information that is submitted, directly or indirectly, to Service Provider by

Agency or obtained or learned by Service Provider as a result of the direct or indirect disclosure of data and information by

Agency in connection with the Services provided by Service Provider under this Agreement. Agency Data does not include

any data or information independently developed by Service Provider.

(ii) “Confidential Information” shall mean (A) all information marked confidential, restricted or proprietary and (B)

any other information that is treated as confidential by the Disclosing Party and would reasonably be understood to be

confidential, whether or not so marked; provided, however, Confidential Information shall not include information that a

Receiving Party demonstrates (1) is or becomes generally available to the public other than as a result of a disclosure by such

Receiving Party or its representatives, including any disclosures made on a IRS Form 990, (2) was within such Receiving Party’s

possession prior to its being furnished to such Receiving Party or its representatives by Disclosing Party or its representatives

pursuant hereto, but only to the extent that the source of such information was not known by such Receiving Party or

its representatives to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation

of confidentiality to, Disclosing Party or any other party with respect to such information; (3) becomes available to such

Receiving Party from a source other than Disclosing Party or any of Disclosing Party’s representatives, but only to the extent

that such source is not known by such Receiving Party or its representatives to be bound by a confidentiality agreement with,

or other contractual, legal or fiduciary obligation of confidentiality to, Disclosing Party or any other party with respect to such

information or (4) is independently developed by Receiving Party or its representatives without the use of or reliance upon the

Disclosing Party’s Confidential Information.

(iii) “Disclosing Party” shall mean, with respect to particular Confidential Information, the party that disclosed such

Confidential Information or the information underlying it.

(iv) “Receiving Party” shall mean, with respect to particular Confidential Information, the party to which such Confidential

Information, or the information underlying it, was disclosed by Disclosing Party.

(v) “Related Documentation” shall mean with respect to any Software or Tools, all materials, documentation,

specifications, technical manuals, user manuals, flow diagrams, file descriptions and other written information that describes

the function and use of such Software or Tools, as applicable.

(vi) “Service Provider Software” shall mean the object code of the Software and Related Documentation owned, acquired


CHILDREN AND FAMILY SERVICES CENTER SERVICES AGREEMENT or developed by the Service Provider and used in connection with the provision of the Services.

(vii) “Software” shall mean the source code and object code versions of any applications programs, operating system

software, computer software languages, utilities, other computer programs and Related Documentation, in whatever form or

media, including the tangible media upon which such applications programs, operating system software, computer software

languages, utilities, other computer programs and Related Documentation are recorded or printed, together with all

corrections, improvements, updates and releases thereof.

(viii) “Tools” shall mean any Software development and performance testing tools, know-how, methodologies, processes,

technologies or algorithms and Related Documentation used by Service Provider in providing the Services.

(ix) “Use” shall mean the right to load, execute, store, transmit, display, copy, maintain, modify, enhance, create derivative

works, make and have made.

(x) “Vendor Software” shall mean the object code of the Software that is licensed or leased by Service Provider from a

third party and used by Service Provider in connection with the provision of the Services.

(b) IntellectualProperty. Agency agrees that Service Provider shall retain all right, title and interest in and to all intellectual

property rights related to, in connection with, or deriving from the Services.

(c) ProprietaryRights. To the extent that Vendor Software and Service Provider Software is used in performing the Services,

Service Provider will grant to Agency, during the Term and solely to provide the Services, a non-exclusive, non-transferable, limited

right to have access to and (i) Use, to the extent permissible under any applicable agreements with Vendors, the Vendor Software

and Related Documentation in Service Provider’s possession, and (ii) Use the Service Provider Software. Nothing in this Agreement

will be construed to require Service Provider to provide Agency with access to any Software other than that to which it has a

contractual or other legal authority to do so. Except for the access and use rights set forth in this paragraph, Service Provider (or the

applicable third-party Vendor/licensor) retains all rights, title and interest in and to all Software.

(d) OwnershipofData. As between Agency and Service Provider, all Agency Data is, or will be, and will remain the property

of Agency. Without Agency’s approval (in its sole discretion), Agency Data will not be (i) used by Service Provider other than in

connection with providing the Services, or (ii) commercially exploited by or on behalf of Service Provider.

(e) Confidential Information. Without the prior written consent of a Disclosing Party, a Receiving Party agrees that all

Confidential Information provided by such Disclosing Party (i) will be held in confidence and not disclosed by Receiving Party to any

person other than Receiving Party and its representatives who need to know the Confidential Information to evaluate and perform

under this Agreement and who are informed of its confidential nature, (ii) will not be used by Receiving Party other than in

connection with this Agreement, and (iii) will not be used by Receiving Party in any way detrimental to Disclosing Party. A Receiving

Party shall use at least the same degree of care to safeguard and to prevent disclosing to third parties the Confidential Information

of the other as it employs to avoid unauthorized disclosure, publication, dissemination, destruction, loss, or alteration of its own

like information (or information of its customers) of a similar nature, but not less than reasonable care. Notwithstanding the

foregoing, a Receiving Party may disclose Confidential Information if it concludes, based upon a written opinion of counsel, that

public disclosure of such Confidential Information is required pursuant to any legal requirement or any legal proceeding, in which

case the party wishing to make disclosure will, to the extent legally permitted, (i) give the other party written notice of such

proposed disclosure, in reasonable detail, as far in advance of such disclosure as practicable, (ii) cooperate reasonably with the other

party in efforts to protect the information from disclosure, and (iii) limit its disclosure to the minimum required by law.

(f) Survival. The provisions of this Section 11 shall survive for a period of two (2) years after the expiration or termination of

this Agreement.

12. Miscellaneous.

(a) Notices. Any notice or demand which by any provision of this Agreement is required or allowed to be given by either


CHILDREN AND FAMILY SERVICES CENTER SERVICES AGREEMENT party to the other shall be deemed to have been sufficiently given for all purposes when made in writing and delivered by hand

or by nationally recognized overnight courier or sent in the United States mail as certified or registered mail, return receipt

requested, postage prepaid and addressed: (a) if to Agency, to the office of Agency at the Building or to such other place as Agency

may from time to time designate in a notice to Service Provider and (b) if to Service Provider, to the office of Service Provider at the

Building or to such other place as Service Provider may from time to time designate in a notice to Agency.

(b) IndependentContractor. In the provision of the Services, Service Provider is and shall be an independent contractor, and

nothing herein shall be deemed to cause this Agreement to create an agency, partnership, employment relationship or joint venture

between Service Provider and Agency. No officer, manager, director, employee, agent, affiliate or contractor of Service Provider will

be deemed to be an employee, agent or contractor of Agency. Neither party will have any right, power or authority, express or

implied, to bind the other.

(c) ForceMajeure. If the performance of this Agreement, or any obligation hereunder, except the making of payments, is

prevented, restricted, or interfered with by reason of any act or condition beyond the reasonable control of the affected party, such

as natural catastrophes, governmental acts or omissions, war or riot, the party so affected will be excused from performance to the

extent of such prevention, restriction, or interference.

(d) Waiver. Any waiver by a party of any provision or condition of this Agreement shall not be construed or deemed to be a

waiver of any other provision or condition of this Agreement, nor a waiver of any subsequent breach of the same provision or

condition. All waivers must be signed by the party waiving its rights. Without limiting the foregoing, the continuing provision of

Services by Service Provider after an Agency Event of Default shall not be deemed a waiver of any of Service Provider’s rights or

remedies under this Agreement with respect to such Agency Event of Default.

(e) Severability. If any article, Section, subsection, paragraph, clause or sentence of this Agreement shall be adjudged illegal,

invalid or unenforceable, such event shall not affect the legality, validity or enforceability of the remaining portions of this

Agreement as a whole or any portion thereof.

(f) Amendment. This Agreement may be modified only by written agreement, signed by Service Provider and the Agency.

This paragraph shall not be construed to limit the rights of the parties hereto to modify the obligations and liabilities as

provided herein, including, without limitation, Service Provider’s rights to modify the Services and to recalculate Agency’s

Proportionate Share.

(g) ThirdPartyBeneficiaries. This Agreement will not benefit, or create any right or cause of action in or on behalf of, any

person or entity other than Service Provider and Agency.

(h) GoverningLaw. This Agreement and all disputes arising out of or relating hereto shall be governed by and construed in

accordance with the laws of the State of North Carolina applicable to contracts made and performed entirely within the State of

North Carolina, without giving effect to any principles of conflicts of laws thereof or of any other jurisdiction. The parties hereby

agree that this Agreement is made and entered into in the State of North Carolina. The parties hereby consent to the jurisdiction of

the state and federal courts of the State of North Carolina.

(i) Merger. This Agreement, including the exhibits, represents the entire agreement between the parties.

[ Signatures on following page ]


CHILDREN AND FAMILY SERVICES CENTER SERVICES AGREEMENT IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as

of the date first set forth above.

SHARED SERVICES, LLC

By By

Name Name

Title Title


CHILDREN AND FAMILY SERVICES CENTER SERVICES AGREEMENT

EXHIBIT A

INITIAL HR SERVICES

[schedule of services to be provided]

EXHIBIT B

INITIAL FINANCIAL SERVICES

[schedule of services to be provided]

EXHIBIT C

COST ALLOCATION TABLE

EXHIBIT D

IMPLEMENTATION COSTS


Accenture (2005). Drivinghighperformanceingovernment:Maximizingthevalueofpublic-sectorsharedservices. Retrieved from

http://www.accenture.com/NR/rdonlyres/749927BF-1EE7-48B7-9DBB-CE2364027389/0/Accenture2005SharedServicesResearch.pdf

A.T. Kearney (2004). Successthroughsharedservices:Fromback-officefunctionstostrategicdrivers.Chicago: Author.

Retrieved from http://www.atkearney.com/images/global/pdf/Shared_Services_S.pdf

Cooke, R. (2002, October). Optimizing your shared services strategy. ManagementQuarterly [London], 17. 15-22.

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Washington, DC: United States Department of Agriculture. Retrieved from http://www.rurdev.usda.gov/RBS/pub/rr141.pdf

Ginsburg, S. (2008). Issuebrief:Colocatinghealthservices:awaytoimprovecoordinationofchildren’shealthcare? (Commonwealth Fund

Pub. 1141). New York: The Commonwealth Fund.

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Retrieved from http://www.joneslanglasalle-boston.com/ma/corporate/research/download/Q308BostonMarketStatistics.pdf

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Boston: Boston Foundation.

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socialserviceandculturalorganizationsintheUnitedStates. Chicago: Chapin Hall Center for Children, University of Chicago.

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Consulting Services.

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The Annie E. Casey Foundation. Retrieved from http://www.aecf.org/~/media/PublicationFiles/FES3622H120.pdf

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REFERENCES


ABOUT THE AUTHORSJackie Cefola | Nonprofit Center Program Manager, Third Sector New England

Since 2005, Jackie has managed the center’s mix of organizational learning, professional development, and wellness

activities. She assisted with the concept, design, development and tenancy of the center’s Shared Spaces which provides

affordable workstations and offices for smaller organizations that co-locate. She is currently working to expand shared

purchasing and volunteer management services offered at the center. Before joining Third Sector New England, Jackie

managed the consulting services of the Center for Women & Enterprise. She also gained experience as a project manager

at Environmental Defense and a manager at Ernst & Young. She holds a MBA and Masters degree in Environmental

Management from Yale University.

China Brotsky | Senior Vice President, Tides

China Brotsky manages the Tides program that creates, operates, and promotes sustainable work space and shared

services for nonprofits. China joined Tides in 1990 as Chief Financial Officer. During her tenure, China managed the

restoration and development of two green nonprofit centers – Thoreau Center for Sustainability San Francisco located

at the Presidio National Park and Thoreau Center New York located in Lower Manhattan – including oversight of design

and construction, financing, and leasing. China co-founded and directs The NonprofitCenters Network, a cross-sector

North American network of nonprofits and their philanthropic and real estate partners, using education and peer

networking to build capacity in the nonprofit sector. She has lectured and consulted internationally on creating and

operating green nonprofit facilities and the development of shared services programs. China also served as the founding

executive director of Groundspring.org, a nonprofit e-philanthropy tools provider. Prior to Tides, China served six years

in public accounting and was the Deputy Director of Finance and Administration at the Exploratorium Science Museum.

China is a member of the board of directors of Global Greengrants Fund. China received a BS in accounting from

Golden Gate University and is a CPA in the state of California.

Roxanne Hanson | Associate Director, The NonprofitCenters Network

As Associate Director of The NonprofitCenters Network, Roxanne manages membership, education, and publications

on the creation and operation of quality nonprofit office and program space. Prior to joining NCN, Roxanne spent twelve

years working in the national and international nonprofit community based in Washington, DC. She has provided

fundraising, program, and planning consultation for both large and small nonprofit organizations. She has been an

active board member of community arts organizations and serves as a volunteer management trainer.

Tuan Ngo | Outreach & Marketing Coordinator, The NonprofitCenters Network

Tuan works with our vibrant community of NCN members across North America, reaching out to new nonprofit centers,

helping to organize training events, and producing new publications. Prior to joining NCN, Tuan was a Coro Fellow,

where he spent nine months dissecting the systems that make our democracy function. He has taught students in

Sacramento’s low-income neighborhoods and initiated an English camp in a leprosy community while studying

in Thailand. As an undergraduate, he was the Editor-in-Chief of his college journal on international affairs, addressed

campus policies towards students of color, and raised money for orphans living with HIV/AIDS in Africa. Tuan holds a

BA in Diplomacy and World Affairs from Occidental College.


Membership Categories

n Individual or Emerging Centers Membership $250

For interested individuals or centers in development

Oneyearmembershipforoneindividual

n Small Organization Membership $350

For centers/organizations with annual budgets

less than $1 million

Oneyearmembershipforthreeindividuals

n Large Organization Membership $550

For centers and organizations with annual budgets

at or over $1 million.

Oneyearmembershipforthreeindividuals

n Sponsoring Membership $1,000 or above

For individuals and organizations of any size

who wish to provide crucial, additional support to

The NonprofitCenters Network.

Oneyearmembershipforfiveindividuals.Includes

specialrecognitiononwebsiteandinprogrammaterials

Membership Benefits

n Conference and workshop discounts

n Free web-based seminars

n Consultation and support services from the NCN staff

n Access to our Online Directory of nonprofit centers and

industry partners across North America

n Participation in our Ask-NCN discussion forum reserved

only for our members

n Members-only access to our Online Resource Center

n Access to NCN research and publications

It’s easy to join The NonprofitCenters Network.

Complete the information at right, and mail this form to:

The NonprofitCenters Network

P.O. Box 29195, San Francisco, CA 94129

Fax this completed form to: 415.561.6401

Call: 415.561.6365 Visit: www.nonprofitcenters.org

BECOME A MEMBER. CONNECT WITH PEOPLE. GET RESOURCES. BECOME PART OF THE MOVEMENT.

New Member(s) Information

Name

Organization (if applicable)

Address

City

State Zip Country

Daytime Phone

Fax

Email Address

Name(s) and email addresses of additional Members (if applicable)

Organization Membership Information

Organization Type (check all that apply):

Method of Payment

nCheck (made payable to NCN/Tides, Inc.)

Credit Card: nAmerican Express nMasterCard nVisa

Name on Credit Card

Credit Card #

Expiration Date Security Code (on back of card)

Signature Date

nAcademic Institution

nFor-Profit Company

nGovernment

nMulti-tenant Nonprofit Center

nNonprofit Organization

nPhilanthropic Institution

( )

( )

X


Our Mission and Vision

The NonprofitCenters Network, a program of Tides Shared

Spaces, increases the capacity and effectiveness of the nonprofit

sector by supporting the development and ongoing operations

of multi-tenant nonprofit centers and other quality nonprofit

workspace. Our vision is a future when every nonprofit

organization has access to the workspace it needs to support

and promote healthy, vibrant communities.

Our Programs and Services

NCN is the premier source of information and peer networks on

shared nonprofit workspace and shared services programs. We

connect people and institutions to the knowledge and resources

they need to create quality, stable, mission-enhancing workspace

and shared services programs for the nonprofit community.

Our programs and services include:

n Regional, national, and international educational events

n Mentorship from experienced nonprofit center practitioners

n One-on-one training and technical assistance for emerging

and established nonprofit centers

n An Online Resources Center providing sample documents,

educational resources, and peer guidance

n An extensive searchable online directory with detailed profiles

of nonprofit centers and industry partners

n Informative publications that provide customizable tools and

strategies for creating and operating green nonprofit centers

n Outreach and advocacy with philanthropic leaders,

government officials, and real estate and finance professionals

about the benefits of nonprofit centers

The NonprofitCenters Network is a cross-sector community

of leaders that facilitate learning and collaboration across

traditional nonprofit, academic, public, and private sector

boundaries.

Whom We Serve

We bring together individuals and organizations from all sectors

that are committed to effectively developing and managing

quality workspace for the nonprofit sector.

n Emerging nonprofit center projects

n Established nonprofit center leaders

n Developers, architects, and private sector real estate

professionals

n Leaders from philanthropic institutions

n City and government officials

n Neighborhood council members

n Banking and community financing institutions’ experts

n Academics interested in the nonprofit sector

About Tides

Bringing together people, ideas, and resources, Tides actively

promotes change toward a healthy and just society, one which

is founded on the principles of social justice, broadly shared

economic opportunity, a robust democratic process, and a

sustainable environment. Tides believes healthy societies rely

fundamentally on respect for human rights, the vitality of

communities, and a celebration of diversity.

Tides offers an array of services that amplifies the efforts of

forward-thinking philanthropists, foundations, activists, and

organizations to make the world a better place. Made up of

Tides Foundation, Tides Center, and Tides Shared Spaces, Tides’

core capacities are in philanthropy, fiscal sponsorship, and

nonprofit real estate services.

Tides Shared Spaces helps create environmentally sustainable

workspaces for nonprofits and communities to come together.

Organizations sharing space realize cost efficiencies and

gain access to new ideas, potential partners, and expanded

opportunities. Tides Shared Spaces operates the Thoreau

Centers for Sustainability and The NonprofitCenters Network.

ABOUT THE NONPROFITCENTERS NETWORK

Shared Spaces and Services ConsultingThe NonprofitCenters Network provides

consulting services for organizations looking

to create a shared spaces and shared services

program. For more information, contact

[email protected].

> For updates on shared services, case studies, and sample documents, please visit

www.nonprofitcenters.org/shared-services-guide.


P.O. Box 29195 • San Francisco, CA 94129 • 415.561.6365

www.nonprofitcenters.org

The NonprofitCenters Network is a program of Tides, Inc.

©2010 The NonprofitCenters Network and Tides. All rights reserved.

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