While a nonprofit may not view money in quite the same way that other businesses might, financial stability is still vital. If the finances don’t add up, the company won’t have a future. Sadly, that will stop you from providing the valuable service that your organization wants to provide.
So, what steps can be taken to ensure that the nonprofit has a strong financial future? Here’s all you need to know.
Staffing costs are unquestionably one of the biggest expenses facing any business. The nonprofit is no different. Outsourcing in the right situations can work wonders for reducing your overheads. For starters, you’ll save money on the recruitment and onboarding process. Meanwhile, you will have a clear understanding of your expenses and only pay for what is required.
When added to the fact it’ll enable you to operate from more modest premises, it is one of the smartest updates that you can make.
Keep your accounts in good order
As a nonprofit, keeping your finances in good health is an ongoing challenge. So, you must not allow yourself to fall victim to potential penalties or missed tax relief opportunities. Understanding your 990 filing requirements, for example, will make a huge difference. Aside from securing the best financial returns, it is a move that will deliver the peace of mind that you deserve.
Financial organization will also encourage you to use automated payments to suppliers. It will allow you to avoid late payment fees. Perfect.
Reduce financial waste
Operational efficiency should cover the expenses as well as productivity. If automated tech can boost production speeds and accuracy, you should utilize this to your advantage. Crucially, though, you must address all bills to check that you are getting the best rates. Meanwhile, any opportunity to remove unnecessary expenses should be grabbed with both hands.
This could mean losing unnecessary team meetings and travel. Or removing ineffective marketing campaigns. When your capital works harder, success follows.
Know your revenue sources
The organization may not need to turn a profit, but it still needs to generate income. Conducting the necessary research at GrantWatch will enable you to learn about potential grant. They could enable your nonprofit to thrive. Meanwhile, trusts and private investors are worth pursuing too. This is especially true when your nonprofit is linked to an issue that people care about.
Public fundraising and selling products may also be used to generate funds. When the company has a greater level of income, it has a far better shot at sustainability.
Achieve high retention levels
If a lot of your revenue comes from public fundraising and donors, it’s important to focus on retention levels. It is far easier and cost-effective to encourage repeat donations such as direct debits than recruit new donors. The key here is to drive value by showing users that your organization has the biggest impact to support its beneficiaries. Whether it’s the environment or people who need help.
Aside from keeping your finances in better health, this is a key step to creating a more predictable future. This can help your nonprofit take calculated decisions.