There has been so much discussion about the push to merge nonprofits that I thought it would be good to shift the focus to another form of strategic integration: Shared Service Alliances, or what some people refer to as management service organizations. In a recent edition of the Stanford Social Innovation Review, there as a great article by David LaPiana called Merge Wisely, which makes the case that there are lots of ways to partially integrate two or more nonprofits and get great results without merging. David explains that mergers are not always the correct strategic choice, and he is right.For the next few months I would like to share with you a series of interviews I have done with some people who have found a way to add a lot of value to their missions by creating back office alliances. This work was identified to me by John Weiser, a principal with the nonprofit technical assistance organization Opportunities Exchange which works with childcare facilities, education centers, and family group homes to form what he calls Shared Service Alliances, that provide efficiencies, lower operating expenses, expand the quality of back office functions, and stabilize small bands of nonprofits in this part of the nonprofit market. I talked to John about his work. John makes the argument that there are lots of community-based institutions for whom being local, and keeping their community identity is critical to their missions and therefore there is a lot of pressure to keep their autonomy. Yet we know based on the recession and the changing business model for the nonprofit sector that these small nonprofit businesses need to find ways to be more efficient and to deliver more sophisticated business services like outcome evaluation at the same time. How to do both - maintain strong grassroots identity and create a viable business model that covers costs?John is arguing that the solutions Shared Services Alliances, or partial integration or sharing of business functions between two or more nonprofit organizations. There are lots of ways this can happen: one organization with excess capacity can provide these services for other organizations on a fee-for-services basis; organizations can band together to create a cooperative to provide back office services to all their members, or an intermediary serving a group of nonprofits can provide or organize the services on behalf of their members. The team at Opportunities Exchange has helped create a variety of approaches for Shared Services that begin with the experience in the community, the needs of the nonprofits, and their preferences.Opportunities Exchange was formed by John and his colleague Louise Stoney,a  30-year veteran of the childcare industry. Louise came to the idea of Shared Services through her work in childcare finance. While getting additional funding for childcare agencies is important, Louise realized that getting childcare agencies to use the limited money they had more efficiently was even more important. Much of the childcare industry is very small businesses which don't have extensive skills or staffing and can't scale up to become more efficient in their administrative functions. Louise and John believed they should focus on assisting childcare providers to share services, such as:

• insurance
• group purchase of supplies, food
• HR hiring, benefits management
• facilities management
• quality control
• classroom teaching
• mentoring new teachers

One of the leading examples of a successful Shared Service Alliance is the Children's Home and Chambliss Shelter in Chattanooga, TN, which provides management services to several childcare agencies on a contractual basis. The Children's Home provides complete back-office services for the contracted agencies; their executive Director, Phil Acord, in effect fulfills the role of executive director for each one of the alliance nonprofits. Each organization remains independent, and the Children's Home contracts with the nonprofit to provide strong business services; this has strengthened each childcare agency tremendously. It's a great way to grow for all involved.Opportunities Exchange also consulted with Quality Care for Children (QCC) in Atlanta, Georgia. This nonprofit serves both parents and childcare providers. QCC decided to go in a different direction for their Shared Services Alliance and created a menu of services for their members including joint purchasing, web-enabled training, web development, and other web-based services. the daycare providers are also working collaboratively to deliver services to each other. This Shared Service Alliance launched spring 2010 and has an evaluation component in place to measure their results.I was curious about some of the organizational aspects of putting Shared Alliances together. John said that the agencies typically have a donor at the table to help pay for the facilitation because these agencies can't afford to pay for this work themselves. The pay-off on the back office integration takes two-to-three years time, and it's important to the donors to prove-out the savings by having an evaluation component in the project. I was also curious about how the work is divided up and John related that usually one or two of the stronger nonprofits take on more of the heavy lifting because they have a stronger infrastructure and therefore have the capacity to do so. But don't even start the effort, John cautioned, unless the group collectively has about 500 children in the pool; the efficiencies just won't be there.In the weeks to come, I will tell each of the Shared Alliance stories briefly mentioned here: The Children's Home and Chambliss Shelter, Quality Care for Children, and also the story of the David and Laura Merage Foundation based in Denver, Colorado. An incredible family foundation which is working to revolutionize the childcare sector in their state through geographically-based Early Learning Venture Child Nursery Centers, providing shared services in a hub-fashion to childcare businesses, and other supports to the industry.