The Salvation Army Marshals More Money to Charitable Campaigns By Outsourcing | Article

salvation army outsourcesIt’s Christmas. The Salvation Army is out in force, ringing bells and collecting money. The worldwide religious and social services organization knows its strength is in managing philanthropic efforts, not financial systems. Shepherding a budget of over $1 billion annually was becoming an operational nightmare that distracted the U.S Southern Region executives from their core mission.

Southern Territory headquarters executives in Atlanta, Georgia took a bold step. As they began migration from their 15 year-old accounting system to Microsoft’s Great Plains eEnterprise Software package, they also searched for an outsourcing supplier that could host the new accounting database and train the staff to efficiently use a central network.

The second objective was a very large task since the Southern Territory consists of 493 locations in 15 states. Approximately 1,000 people had to have daily access to that financial network.

“The Salvation Army’s situation is a not unlike a large franchise organization or a national chain of restaurants where you have multiple sites scattered over a large area,” says Edward F. Clough, communications director of ManagedOps.com, Inc., the firm that won the Salvation Army’s outsourcing contract. “The complexity of this project was indeed a challenge.”

Replacing its outdated accounting system with a modern enterprise management system specifically customized for a non-profit organization presented The Salvation Army Southern (TSA-Southern) with dual requirements. First, the staff had to meet the organization’s daily fiscal management objectives. Second, they could not forget the organization’s enduring focus on its core mission of securing contributions and dispersing these funds to its philanthropic projects.

Outsourcing Savings Flow to Philanthropy

“We were concerned with how much money we could conserve on our accounting solution so we could pass the savings on to our clients,” says Lt. Colonel David Mothershed, Southern Territory financial secretary.

The Salvation Army has a reputation for fiscal integrity and financial accountability. According to the National Charities Information Bureau, a New York philanthropy watchdog group, a ratio of 70 percent or higher of funds allocated to the charitable mission is an indication of a well-managed charity. “We give 85 percent of every dollar raised to direct client services, and we need to preserve that same consistency level,” says Mothershed.

Because of the large number of people who access TSA’s financial records, developing an accounting network that is versatile and easy to manage was necessary to allow Mothershed’s troops to focus on their core objectives.

“Our organization consists of small, medium, and large units of operation, geographically dispersed, many with limited staff capabilities that have to manage complex business systems. The advantages and benefits of outsourcing our operations were attractive,” says Mothershed.

Specific Marching Orders

In 1999, after many years of revising a 1980’s formula, TSA-Southern began upgrading its financial management system to provide accounting support to divisional field levels from central headquarters. After disappointing experiences with several accounting systems, the executives settled on Great Plains eEnterprise software. They selected California-based Collins Computing, which had previous experience with The Army’s USA Western, USA Central and New Zealand Territories, to implement the change.

Collins introduced the idea of operations outsourcing to TSA, and suggested ManagedOps.com of Bedford, N.H. Coincidentally, TSA had recently seen a demonstration by the New England company, so the groundwork had already been laid. After further investigation, Mothershed chose ManagedOps as its network ASP outsourcing supplier.

Since the Salvation Army is a large, multi-site client, the varying scope of expertise among the users is different than the typical client. “We have other multi-site clients, but their needs are more stable, and the knowledge level isn’t as varied,” says ManagedOps.com’s Clough. “And when it comes to making system access updates or providing software patches, The Salvation Army has hundreds of users who are scattered over many states, so more people are typically affected.”

Moving In The Right Direction

ManagedOps provides network and systems infrastructure – including SQL servers, terminal servers, and a private network to host, deliver, and administer the eEnterprise software. The service provides secure, 24×7 systems engineering, network management and helpdesk support.

This partnership is entering its second year of a three-year contract. To date, approximately one-third of TSA-Southern’s financial employees have been trained on the system, including all headquarters employees in Atlanta. By outsourcing its applications to ManagedOps, the charity estimates it will save at least $1.1 million dollars over the life of the contract. Also, not having to hire, train, pay and retain an additional 50 IT professionals to handle the expanded workload and functional responsibilities is an added bonus.

The ManagedOps service also eliminates version control problems by integrating four different accounting systems, two inventory systems, one purchase order processing system, and several others into the Great Plains’ accounting software. This solution has given TSA-Southern greater strategic advantage in the competitive world of charitable fund-raising.

The Next Level

Today, The Salvation Army Southern has a high-performance, centralized system that makes financial information from multiple remote sites readily accessible. And though each regional territory is responsible for its own area, when disasters hit other parts of the world, many regions end up supporting the one where the disaster occurs. So now, when TSA-Southern leaders are asked to help flood victims in Missouri or earthquake survivors in India, they can respond more quickly because they know the resources are available for outreach activities, social services, and philanthropic endeavors. The system also streamlines TSA business processes, providing another competitive advantage over other non-profits.

TSA-Southern plans to add several more Great Plains accounting modules, and Collins will supply the management interface solutions, including Loan Processing and Property Management. They are also considering outsourcing client services applications. “This ASP solution is the topping on our sundae,” says Colonel Mothershed. “It provides us with an extra pairs of eyes and around-the-clock care.”

Three of the four US regions are now using this formula. Mothershed feels it’s only a matter of time before the organization adds the remaining region (Northeast).

“We’ve found the right combination of technical acumen and cultural values in our outsourcing supplier that enable us to concentrate on and perform our missions of mercy more effectively and efficiently,” concludes Mothershed.

Lessons from the Outsourcing Primer:

  • The Salvation Army’s situation is a lot like a franchise organization with multiple sites scattered all over the country. In such a franchise-like environment, finding an ASP that has deep knowledge of applications and how they operate in a variety of environments is key.
  • Find an outsourcer that shares your basic values and understands your mission. This goes a long way in easing your mind and building trust.
  • Outsourcing allows a charitable organization to channel its energies and its resources into its philanthropic duties. The savings outsourcing generates benefits those projects.


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