Social Enterprise Business Idea Series: Shared Service Centers

In a previous post I talked about sector collaborations and partnerships.  In this next installment of the business idea series, I will be focusing on a concept that elaborates on that collaboration theme.  This week I will be discussing Shared Service Centers.  These are businesses aimed at helping other businesses.  A Shared-Service Center is a place that can handle every-day activities that do not require much input from the receiving organization- like payroll, marketing materials, social media broadcasts, or providing physical office space.  With a company that focuses only on helping other organizations, this idea offers a premium on efficiency and effectiveness.
 
While this concept has been utilized in the private sector for a long time, the concept is not widely used in the public sector.  This creates a niche market that is currently being unfulfilled.  For almost two decades there has been a surge in the need for shared service centers due to rising rents and increasing financial challenges to the nonprofit community.  The theory is successful because the shared spaces provides affordable, quality work space or services and also promotes and joins together various organizations with different missions throughout the community.

The idea is simple.  The centers provide physical space, virtual resources, and/or social opportunities that foster collaboration and innovation.  The operation can be set up as a nonprofit organization that aids other nonprofit organizations or it could be a low-profit social enterprise that sets pricing for shared spaces and services to cover the operating expenses, thus furthering its mission to maintain a double bottom-line.

Boston possesses one of the largest centers of this kind in the United States called the Third Sector New England Nonprofit Center (TSNE).  This building house nine floors of office space and meeting rooms, and provides supportive programs and services for tenant organizations.  One element that sets this and other nonprofit centers apart from other tenant sharing facilities is their ability to initiate collaborative efforts between their tenants.  In a survey conducted by the Nonprofit Center Network (NCN) of 39 nonprofit centers questioned about 30% of them required that tenants collaborate with one another as a condition of their lease.  For example, Boston's Nonprofit Center provides programs every month to encourage collaboration between tenants.

Nonprofit Centers also tend to offer services that most organizations cannot find in commercial rental spaces.  Most nonprofit centers will make meeting space available to its tenants at little to no extra cost.  They provide high speed internet services, and parking.  These may not seem like much, but to an organization with limited resources- being able to save on some of these basic operational expenses could make a big difference on how large a scale they can offer their services. Once established the meeting space can also be used to house many community activities, such as exercise classes, seminars, workshops and a cost effective option for non tenant community meetings and events.

Another bonus to the idea, is that many existing centers have opted to capture buildings that need renovation and when implementing those upgrades they have adopted green practices and features.  In the survey conducted by NCN, of the 39 organizations, 7 had renovated historical buildings and 5 had adopted green designs.  The Boston nonprofit center is one of two organizations that have received federal LEED certification for its building.

Shared Service Centers are much more than a cluster of nonprofit organizations sharing office space.  Nonprofit centers offer a deliberate opportunity for collaboration that aim to build a community of nonprofits.  Shared Service Centers have proven to be an effective strategy to help address the needs of nonprofits to have secure, affordable, and efficient work spaces and resources.  As an existing nonprofit, an added revenue stream could be created by operating a shared service center or a socially conscious social entrepreneur can fulfill their mission by helping other organizations fulfill theirs.  Either way, it's a viable business model and a potentially successful social enterprise.

Let me know what you think.

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