Outsourcing by Nonprofit Organizations

This chapter examines the issue of when nonprofits should choose to employ their own staff or house their own operations, versus contracting out tasks and activities to other suppliers. Various examples are offered of nonprofits decisions that may be outsourced or retained in-house. The concepts of specialization, comparative advantage and transactions costs are used to explain the logic of outsourcing, how it applies to various circumstances encountered by nonprofit organizations, and the desirability of this strategy in each case.