Similar to startups, nonprofit organizations are use to doing more with less. Unlike the resources of private corporations, nonprofits are limited to the people they have and the funds they can play with. In many of these situations, these organizations are primarily responsible for the donors and communities that they service. While money does play a large role in the overall success of a campaign, it is imperative that nonprofit organizations take a page out of the startup playbook by being resourceful and effective in their infrastructure and spending in order to optimize the overall sustainability and outreach of their campaigns.
To begin, nonprofits and startups share a similar mentality; both entities need to be smart with their spending. While they may have a strong investments going into their campaigns, the overall development and growth of their mission require a lot of creative and strategic thinking, both operationally and financially. The best organizations and startup business that have been able to do are not necessarily the ones that spend the least or spend the most. Instead, they are the ones that are able to create an effective budget and making specific buying decisions that will lead them to reach their overarching goals.
So how do you do this? How can you effectively manage and operate your team or organization while saving and cutting cost on various expenses?
First and foremost, it is imperative that your business leaders within your organizations have a strong and holistic understanding of their finances. For startups, they need to adhere to their budget. While 2015 may be the year of the unicorn, it was also the fall for many great and innovative businesses that could have been the next Google or Apple. The reason why is because many of these companies did not take advantage (or cut cost) of their finances when they needed to grow and develop their companies. Similar to startups, nonprofit organizations need to understand the specific financial restrictions that can prevent them from hitting their targeted goals. This requires these organizations to understand and internalize their monthly expenses, their revenue, and their overall donations and donor numbers. By knowing these numbers quarterly, your organization will be able to leverage areas in which they can cut and save spending, while also investing in specific approaches that can help hit their quarterly goals.
One of the basic concepts your nonprofit organization needs to understand is that evaluating expenses is not cutting things from the budget. While a portion requires you to cut things, you are looking to find different avenues that can be more cost efficient while also adhering to the work and goals that your organization is trying to accomplish. Do not by any mistake think that low quality is a good thing. Find the best type of quality for the most reasonable price. In doing so, you will begin thinking more strategically with your financial budget.
Now, when it comes to cost, it is important that you find specific small expenses you can cut like irrelevant office supplies or overly expensive office spaces. Cutting these cost can help you utilize more funding in various departments that can assist you in reaching your donation goals. For example, for many startups, the overall popular trend for launching a company is no longer being seen in the big cities. Why? The exorbitant amount of cost for an office in Manhattan or a building in Silicon Valley is just not financially reasonable. Instead, many of these businesses are seeking cheaper office locations and effective spaces that allow for their business to grow and develop in the right way possible. Like startups, you need to find these areas where you can cut corners with your budget. Many nonprofit organizations are use to operating with that scarce mentality. But for a better infrastructure and longevity with success, try and think lean. Be cash-conscious and weigh any and all expenses against your nonprofit’s ability to achieve its mission. This will force you to keep your budget in check and various buying decisions at a minimum.
Lastly, for any type of investment opportunities, make sure you weigh the cost. One of the biggest mistakes many startups make is burning any financial investments that should have been used in the future. Similar to startups, your nonprofit organization needs to be cash-conscious and seize any opportunity or investment that can help benefit their campaigns. For example, take a look into promotional campaigns that can help expand your mission and engage new and future donors to your organization. Remember, nonprofit organizations are still business. Invest in what can help reach your goals, but also weigh any negative consequences and ramifications that can come out of it.