New Technology Proven In Year-Long Study To Cut Purchasing Costs In Half For Nonprofit Groups

Atlanta, GA – It started with an idea: could the technology used by major corporations to cut costs on everything from Post-It® Notes to janitorial supplies to printing services be adapted to benefit nonprofit organizations?

The answer is “yes,” thanks to a ground-breaking study of purchasing trends among nonprofits, and the adaptation of a cutting edge e-procurement system formerly available only to the for-profit business sector. After a full year of testing by the Georgia Center for Nonprofits, five Georgia nonprofit organizations have gone from concept to a new purchasing reality. They have said, “Enough!” to out-of-control costs for supplies and services and signed on with Nonprofit Marketplace (NPM) - the first-ever, e-procurement outsourcing system tailored specifically for nonprofits.

Nancy Flippen, CFO and Director of Support Services for the Atlanta Community Food Bank, one of the first Georgia nonprofits to use the NPM system, realized savings in her operation right away. "Our DHL savings have been substantial. With NPM, our purchasing contract waives the monthly fee no matter how many transactions we have. I have now tracked office supplies before and after using NPM. We saved 50% over the previous year. I was pleasantly surprised,” Flippen said.

“The e-procurement system has gotten an amazing report card after just one year - and it’s not just about cost savings,” said Karen Beavor, President and CEO of GCN. “Our test clients told us they liked the back office capabilities of Nonprofit Marketplace nearly as much.”

According to Nona Galbreath, Financial Analyst for Boys and Girls Clubs of Atlanta, Nonprofit Marketplace literally revolutionized operations in her nonprofit. "Before the Nonprofit Marketplace system, we had 22 individual sites around Metro Atlanta doing their own thing, each buying their own janitorial and office supplies. Now all purchasing is centralized through my office and finally there is control over the purchasing process. Quantities are monitored, approvals are standardized, and our staff seems quite happy to be liberated from purchasing and invoicing paperwork. Believe it or not, consolidating 22 sites into one central purchasing system has been painless,” she said.

At The Woodruff Arts Center in Atlanta, Mike Flood hopes to realize over $250,000 in savings using the system. As vice president of operations for the premiere arts and cultural campus in the city, simply finding a cheaper vendor for plastic spoons and forks translates into healthy savings. “The NPM software gives me reports in all categories to see where our dollar spend is going,” he says. “I have also found the human support at GCN makes a difference. If we identify an area where we are spending heavily, our account executive works with us to find the right vendor.”

The unique technology of Nonprofit Marketplace was born from a creative partnership between GCN and IBM Business Consulting Services. Both firms believed that IBM’s successful e-procurement technology could be adapted to business operations at nonprofit organizations. But when formulating a business plan, they were surprised to discover that nonprofit purchasing needs, categories and volume had never been systematically analyzed. GCN and IBM then conducted the nation’s first in-depth study of nonprofit purchasing practices. The study led to a one-year pilot program to test the IBM technology with a select group of Georgia nonprofits having annual budgets between $3M to $100M.

GCN brought a deep understanding of nonprofits to the IBM partnership. The NPM e-procurement system followed their first effort — Opportunity Knocks www.opportunityknocks.org — one of the most popular nonprofit job-search systems on the Internet. Steeped in the culture of nonprofits, GCN also knew that the pressure to cut material and operating costs and maintain high standards of transparency and stewardship are paramount in mission driven organizations. The point was driven home when the GCN-IBM purchasing study revealed that every $1 saved by reducing purchasing expenses equals $11 raised by fundraising. “It’s a pretty dramatic equation,” said Beavor from the Georgia Center for Nonprofits.

“Nonprofit Marketplace has proven itself every step of the way. It gives organizations the purchasing clout of a Georgia-Pacific or a Southern Company while cutting hard costs by as much as 50 percent,” said Nancy Longacre, vice president with the Georgia Center for Nonprofits. “Even better, we’ve shown our clients that there is substantial money to be saved on purchasing that can go toward fulfilling nonprofits’ vital work in communities across the country.”

More information about Nonprofit Marketplace is available from the Georgia Center for Nonprofits at 678-916-3000 / 800-959-5015 (outside Atlanta) or online at www.gcn.org .

# # #