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How Non-Profits Can Lower Costs Through a Cooperative Purchasing Program

How Non-Profits Can Lower Costs Through a Cooperative Purchasing Program

by Pat Pharr - March 22, 2022

Let’s face it, we all like to save money. When it comes to purchasing office equipment like a fleet of multifunction printers, a cooperative purchasing program creates an opportunity for affordability.

One way Non-Profit Organizations (NPOs) reduce capital expenses is through cooperative purchasing. Before discussing how non-profits can lower their costs through these programs, let’s review how cooperative purchasing works.

What Is Cooperative Purchasing for Non-Profit Organizations?

Non-profit cooperative purchasing refers to the process of using pre-negotiated, industry-specific, and ready-to-use contracts to streamline the procurement process and reduce pricing for products, services, and solutions. Cooperative purchasing organizations work by aggregating the purchasing power of public agencies - sometimes more than 90,000 - by offering participating members the ability to make purchases through existing, competitively solicited contracts.

A cooperative purchasing organization operates and serves solely to leverage large-scale purchasing power to benefit its members. This essentially provides any qualifying organization, such as a small- to mid-sized local non-profit, the ability to purchase at pre-negotiated buying levels that in the past may have only been attainable for the most prominent universities and school systems.

Some cooperative purchasing programs that are highly regarded and recommended by trusted managed service providers are the Association of Educational Purchasing Agencies (AEPA) for education organizations, Premier and Vizient for healthcare organizations, and Sourcewell for non-profits and government organizations. Some other similar options available include OMNIA Partners Public Sector.

Here are the main types of non-profits that typically use cooperative purchasing programs:

  • Foundations
  • Religious groups
  • 501(c)(3) organizations
  • Social advocacy groups
  • Community and social services establishments
  • Private schools, colleges, and universities
  • Trade associations and special interest groups

3 Ways Non-Profit Institutions Save Money With Cooperative Purchasing Programs

Cooperative purchasing programs offer tangible benefits for NPOs that understand how to successfully leverage them to their advantage. But one benefit stands out in particular: cost savings. Here are three ways cooperative purchasing programs reduce costs for non-profit organizations.

1. Reduce Prices for Products, Services, and Solutions

NPOs of any size can take advantage of the competitive solicitation process to receive volume discount pricing for products, services, and solutions they need that would otherwise be difficult to attain individually and independently. Non-profit institutions can leverage cooperative contracts to reduce prices for products and services, including:

2. Eliminate Costly Request for Proposals (RFPs)

Cost is not the only thing saved when non-profits partner with a cooperative purchasing program. Typically, NPOs may not have the staffing or the time to price shop or get multiple quotes, nor do they have the purchasing power of larger enterprises.

By using a cooperative purchasing program, non-profits gain substantial discounts and avoid the costly process of issuing a Request For Proposal (RFP), which can cost up to $25,000. They can leverage cooperative purchasing standards and supplier commitments to receive the best value.

3. Receive Additional Cost-Saving Perks, Guarantees, and Protections

Credible cooperative purchasing programs have additional perks, guarantees, and protections embedded in their competitively solicited contracts. One of the main perks cooperative purchasing programs provide is their commitment to continuous improvement and their combined years of procurement experience.

An invaluable resource for non-profits, certified cooperative purchasing experts seek continual benefits for their members by negotiating new discounts and improving terms and conditions with participating suppliers. Some cooperative purchasing programs will conduct benchmark analyses against other suppliers and retailers to ensure the best overall value for their members.

Additional cost-saving benefits associated with cooperative contracts include:

  • No User Fees – No costs or fees to participate.
  • No Minimum Order Requirements - Organizations can procure the exact number of products they need without a significant capital investment.
  • Vetted and Legally Accepted Contracts - With pre-negotiated contracts, non-profits do not need to go through the expensive and time-consuming legal process.

>> Discover why your business should take advantage of group purchasing  organizations (GPOs) and cooperative contracts.

Reduce Your Costs with Non-Profit Cooperative Purchasing

Cooperative purchasing programs help nonprofit procurement professionals meet their purchasing requirements while saving money, time, and resources. NPOs interested in leveraging cooperative purchasing programs should partner with an experienced managed service provider for an assessment of their networking and printing solutions needs.

Editor’s Note: This post was originally published on October 2, 2014, and has been updated for accuracy and current best practices.

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Non-Profit Organization (NPO) using cooperative purchasing to lower costs.
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