Stanford Social Innovation Review : Informing and inspiring leaders of social change

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Nonprofit Management

Change Comes at a Cost

In 2008, a group of Chicago’s oldest and largest social service agencies formed the Back Office Cooperative, which a McKinsey & Company study estimated could save as much as $100 million annually through joint purchasing and shared administrative functions. Although the cooperative has produced impressive financial savings, greater efficiency has come at a cultural cost.

 

In 2006, a report sponsored by two of Chicago’s largest social service funders, the Chicago Community Trust and the United Way of Metropolitan Chicago, warned a coalition of 22 of the city’s oldest and financially strongest human service agencies and community nonprofits that they faced the prospect of decreasing revenues and rising service demands. To better use existing resources, the report advised the coalition—the Chicago Alliance for Collaborative Effort (CACE)—to develop a plan...


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