It may seem like that dreadful “overhead,” but using an intermediary to put together funding options for scaling a nonprofit … well, it’s an investment in expertise, not a frivolous expense.

That was the point very clearly made by the panel, Intermediaries and Impact: How Can We Make Our Philantrhopic Dollars Go Further By Leveraging the Work of Intermediaries? at the 2011 Social Impact Exchange’s Conference On Scaling Impact.

“Intermediaries” sounds like a layer of middlemen, an extra step but better described as go-betweens who provide technical assistance and advocacy that nonprofits and their funders may not be able to provide on their own.

Using an intermediary puts a person in charge who has the right skill set for the task, leaving nonprofit leaders free to do what they do best: run their programs. It is akin to hiring a graphic designer to create a logo or an event planner to put together a gala. Hiring an intermediary is an investment in success, according to the panelists.

As Carla Javits, president of REDF, said, intermediaries help funders by:

• identifying nonprofits capable of delivering and being accountable;
• finding matching funds;
• directly delivering or mobilizing the right support at the right time;
• delivering the right amounts and types of financial support;
• finding efficient, flexible money;
• aligning different sectors at the table and engaging them.

Using an intermediary requires the ability for the funder to be flexible and willing to let go of some aspects of the process of building funding coalitions, cautioned Mimi Cocoran, director of the Special Fund for Poverty Alleviation.

J.B. Schramm, founder and CEO of College Summit, voiced the benefits of having an intermediary from the nonprofit’s point of view:

• leveraged expertise of their donors and funders; they knew people we didn’t know;
• opened doors and went to meetings: Time is a resource. Chasing funders takes nonprofit leaders away from overseeing program.
• reduced the cost of financing because only one application and one decision among several funders;
• simplified reporting because, again, only one report for several funders;
• formed “communities of innovation” that was cohesive and responded quickly.

Joel Vargas, vice president of Jobs for the Future, added that the intermediary knows how to work the networks and take advantage of resources; that’s a real valued-added.

It’s another lesson for us all: None of us can do it all. It takes a team to run a nonprofit and it takes a team to scale a nonprofit.