Good things always come in threes — you have probably heard that expression before and thought of it just as a pleasant little saying. But it could serve you well if you remember to think in terms of “threes” when it comes to the relationships you and your nonprofit form with your partners. Before you consider entering into any contract, making any major expenditure of capital, be it for maintenance or upgrades, material supplies, etc. you need to get three bids from separate, competing vendors.
The “three bid rule” applies universally — to individuals, families businesses, etc. — but is never more important than for those who run or help manage a nonprofit organization where funds tend to be tighter and closely regulated. The theory behind getting at least three bids is simple: you can compare and contrast your potential partners. If you only have two options to consider, you will never get a true sense of the landscape you are considering. Say one contractor offers you a very low price estimate for a given job; the other much higher. There is a chance both offers are too high, both are too low, that the fair price is in the dead middle — you just can’t be sure.
With three bids to examine, you can usually single out one of the estimates right away as far too high to be considered or so low it seems in some way suspect. You always want to pay a fair price to get good work done and not risk having a cut-rate team do shoddy work or provide poor or even unsafe goods to your nonprofit. And beyond price, the most important benefit you gain from seeking three bids for every and all deal you consider is the opportunity to assess the approach laid forth by the bidder. If one company offers you services that seem too bare bones and another that seem overly complicated, you will likely trust the vendor with the middle of the road option. If two suppliers guarantee you that the simplest widget the offer will fill your needs while one insists you must buy a pricey, fancy widget, you can more safely assume the third vendor is trying to sell you something you don’t need.
Your nonprofit’s bottom line is important to watch if you want to make sure you will routinely keep your cash flow and your ability to lay out funds working in concert, so you need to make sure you spend wisely! Getting at least three bids on everything your nonprofit does is the only to ensure you will get both fair prices and you will get the level of quality in services, materials, and workmanship that your organization deserves.