When it comes to slashing expenses, for-profit corporations typically come to mind. After all, these organizations are very focused on the bottom line and maximizing value for shareholders. But even though nonprofits aren’t trying to fatten up their margins, they still care about their expense sheets.
6 Money-saving Tips and Tactics
As a nonprofit, every dollar saved is a dollar that can be contributed towards the cause you’re committed to. Unfortunately, the constraints of a strict budget often make it difficult to cut back to any significant degree. But you don’t need to slash away thousands of dollars a month to have an impact on how the organization is run.
Finding ways to save a few dollars here and there may be enough to transform your nonprofit from the inside out. Here are a few helpful suggestions:
- Share Office Space
Office space is always going to be one of the biggest expenses on a nonprofit’s balance sheet. While strategically selection location can curb costs, there are other steps you can take to reduce your monthly rent or mortgage payment.
One suggestion is to share office space with other nonprofit partners. Not only does this cut down on the cost of square footage, but it also lets you pool resources and share things like copiers, printers, meeting spaces, and parking.
- Avoid Single Sourcing
“While single sourcing has the benefit of lessening the time consumption spent on shopping around, the risks of single sourcing are potentially costly to your nonprofit,” nonprofit entrepreneur Nick Morpus writes. “Single sourcing eliminates competition, therefore reduces the incentives for product vendors to offer higher quality products at a cheaper price.”
Single sourcing can seem like a good idea on the surface, but it ultimately hurts you on the balance sheet. Comparison shopping for products and services will save you a tremendous amount of money and provide you with more leverage in the purchase process.
- Use Online Services
The internet has opened up a world of opportunities that previously didn’t exist. And while it’s nice to do business with local companies, it can be far more cost-effective to go online.
Take printing services as an example. By using an online printing company, you can streamline the ordering process and regularly save 20 to 30 percent on your orders. And with improvements in logistics, quick shipping means you no longer have to wait very long for your orders to arrive.
- Attract More Volunteers
As you know, your nonprofit has a need for paid staff. But there’s also a significant need for volunteers. By attracting more volunteers, you can improve your efficiency and output, while keeping your payroll nice and tight.
“Similar to fighting donor attrition, your battle to earn new volunteers while maintaining your current list of helpers will be determined by the incentives you provide, what you ask of your volunteers, and your respect for the time they give you,” Morpus explains.
People are much more likely to volunteer with an organization if they know someone in the organization and have heard positive reports from them. Treat your current volunteers well and develop a strategy by which you leverage them to help you find more volunteers.
- Conduct Regular Budget Meetings
Financial problems occur when there’s a lack of communication among the nonprofit’s decision makers. Instead of hosting one annual budget meeting, make it a point to regularly gather together and evaluate finances on a revolving basis (ideally monthly). This will ensure expenses don’t suddenly surprise you when you’re unprepared.
- Avoid High Turnover
Whether we want to admit it or not, employee turnover is a major problem in the nonprofit industry. People come and go and the results can be costly for the organizations they leave behind.
“Employees do not join nonprofits for the money. The pay is typically low, and the hours long,” Lighthouse admits. “What motivates them instead is the opportunity have an impact and make the world a better place.”
You don’t necessarily need to increase pay to keep employees on the payroll, but you do need to make them feel like they’re doing work that matters.
Be Smart With Your Expense Sheet
It doesn’t matter if you’re running a nonprofit or for-profit business. Learning to intelligently manage your company’s financial resources in a way that prioritizes the organization’s stability, growth, and opportunities will help you enjoy greater success.