A Dollar Saved Is a Dollar Raised: Group Purchasing for Nonprofits July 21, 2010

by Ellie LaCasse

It only makes sense. Vendors offer discounts for goods or services that are purchased in large quantities. However, since many nonprofits are small (and resources are limited), they can’t promise to make big purchases from office supply companies, printers, lawyers, accountants, and software companies—so they may think they’re not eligible for discounts.

Nonprofits in health services have long had access to group purchasing—because they’re often part of a large group with a long history of group purchasing of medical supplies. Most state nonprofit associations also offer group purchasing benefits to their members. You’ll want to check what’s available to you and find out whether this is the best way for you to make the type of purchases you need to make. In addition to state nonprofit associations, we had identified only two other nonprofit group purchasing organizations: Purchasing Partners of America (Colorado) and Nonprofit Purchasing Group of Delaware, and both focus mostly on local vendors.

But now there's a new player on the group-purchasing block you’ll also want to check out: the Non-Profit Purchasing Group (NPPG), a new GiftWorks partner.

After a career in the for-profit arena, Dan Engel started the nonprofit Miracle League of San Diego, a baseball program for children with special needs that currently serves 175 players in the San Diego area. Also board chair of the California Oncology Research Institute, Dan realized the need for nonprofits to find savings on routine purchases.

When Dan announced the start of the NPPG this January, he immediately received 3,000 responses. Even organizations that had previously explored group purchasing welcomed the chance to look into discounts (typically at least 15%) from NPPG’s 43 listed vendors, including GiftWorks.

"The challenge is to educate people about the
opportunity to save money easily."

Although you might be able to find special sale prices on occasion, at NPPG you can find them everyday. NPPG’s offerings include office supplies, printing, payroll fees, consumer directed health plans, telephone services, email marketing, website design, search engine optimization, surveys, social fundraising solutions, online auction fundraising, web conferencing and more.

“The challenge is to educate people about the opportunity to save money easily,” Dan said. Most nonprofit staff members don’t have a lot of time to devote to comparison shopping.

Data from a 2005 Urban Institute study shows that a typical nonprofit (excluding those in the health sector) spends about 10.8% of its budget on supplies, communications, professional fees, and equipment rental and maintenance. Dan estimates that smaller nonprofits spend a higher percentage of their budget on these expenses because they typically have fewer paid staff and more volunteers. It is precisely those smaller nonprofits, which don't have the resources to identify and solicit discounts, that benefit most from group purchasing organizations.

Because NPPG is dedicated exclusively to nonprofits, it doesn't accept commissions, rebates or administrative fees and is thus able to pass through 100% of the negotiated savings to its members. Instead, NPPG charges a membership fee scaled to the size of the participating organization. All members access the same discounts and find the offers in one easy-to-access place.

With an annual fee as low as $19, your organization can come out ahead with the purchase of a single laser printer cartridge or a subscription to the services of one of NPPG's many providers. In addition, NPPG expresses its commitment to the nonprofit sector by donating 10% of its profits annually to charity.

Check out the offers of your state nonprofit association and NPPG and see if there are savings that can help you focus more of your staff time and funds on your mission, and less on back-office purchasing and bill paying.

For more information about NPPG, visit nonprofitpurchasinggroup.org or call Dan Engel toll-free at 877.849.6774.

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Ellie LaCasse, a friend of GiftWorks, is officially retired from fundraising but is forever a community volunteer.