2. Why

Why Connected Communities

The Advantages of Forming an Umbrella Association for Small Incorporated Associations
In the nonprofit sector, small, incorporated associations often face significant challenges related to fundraising, grant applications, and governance. By forming an umbrella association, these smaller entities can pool their resources and expertise, leading to numerous benefits, cost savings, and streamlined governance. Here's a closer look at why such a structure can be highly advantageous.

Benefits of an Umbrella Association

1. Enhanced Fundraising Capabilities
   • Centralised Efforts: An umbrella association consolidates fundraising efforts, creating a unified strategy that can target larger donors and funding sources more effectively than individual associations might on their own.
   • Increased Credibility: Larger, more coordinated entities often appear more credible to potential funders, increasing the likelihood of securing grants and donations.
2. Streamlined Grant Applications
   • Expertise Sharing: By pooling knowledge and experience, the umbrella association can ensure that grant applications are thorough, well-researched, and professionally presented.
   • Efficiency: Centralised grant writing teams can handle multiple applications concurrently, increasing the chances of success and reducing the workload on individual associations.
3. Effective Grant Acquittals
   • Professional Oversight: A dedicated team within the umbrella association can manage grant reporting and compliance, ensuring that all requirements are met and funds are utilised properly.
   • Consistency: Standardising the acquittal process across member associations ensures consistent reporting and accountability.
4. Governance Without Individual Burden
   • Centralised Governance: The umbrella association takes on the governance responsibilities, relieving smaller associations of the administrative burden and allowing them to focus on their core missions.
   • Standardised Policies: With governance centralised, policies and procedures can be standardised, ensuring compliance and reducing the risk of governance issues.

Cost Savings

1. Shared Administrative Costs
   • Economies of Scale: Pooling resources reduce per-unit costs for administrative expenses, such as office space, utilities, and equipment.
   • Shared Services: Centralised services, such as accounting, legal, and IT support, can be more cost-effective than each association hiring its own.
2. Reduced Fundraising and Grant Writing Expenses
   • Centralised Teams: Employing a single team for fundraising and grant writing reduces duplication of efforts and leverages collective expertise.
   • Resource Allocation: Funds can be allocated more strategically, focusing on high-impact activities rather than scattered efforts.
3. Lower Compliance and Reporting Costs
   • Unified Reporting: A single reporting structure minimises the need for multiple compliance audits and reviews, reducing associated costs.
   • Professional Management: Expert management of compliance requirements ensures efficiency and reduces the risk of costly errors or fines.

No Governance Responsibility for Member Associations

1. Focus on Core Activities
   • Mission-Centric Operation: Freed from governance duties, individual associations can concentrate on their specific programs and activities, enhancing their impact and effectiveness.
   • Volunteer Engagement: Volunteers and staff can devote more time to mission-driven work rather than administrative tasks.
2. Reduced Liability
   • Mitigated Risks: With governance centralised, the risk of non-compliance and associated liabilities is significantly reduced for member associations.
   • Professional Oversight: Governance professionals within the umbrella association ensure adherence to legal and regulatory standards, protecting all member entities.
3. Simplified Decision-Making
   • Streamlined Processes: Central governance leads to quicker decision-making and implementation of policies, benefiting all member associations.
   • Unified Voice: Representing a collective group enhances advocacy efforts and policy influence, providing a stronger voice in the community and with policymakers.
4. More Members

• Collective Bargaining: More members, more influence over Local, State, and Federal Government.
• Potential revenue: More members, more potential subscribers  

Conclusion

Forming an umbrella association offers small, incorporated associations numerous benefits, including enhanced fundraising capabilities, streamlined grant processes, significant cost savings, and relief from governance responsibilities. This collaborative approach not only maximises resources and efficiency but also empowers member associations to focus on their core missions, ultimately leading to greater impact and sustainability in their respective communities.