One of the major components of nonprofit organizations is that they exist to help a group of people who are struggling with hardship. That hardship differs depending on the group – it could be a medical issue, or perhaps a natural disaster hit somewhere. Other times, they set out to help groups of people who are financially unstable. While helping those who experience economic hardship is common in the nonprofit world, you’d be shocked to hear that many nonprofits are in an extremely similar economic situation to the groups they set out to assist. A large number of nonprofits have annual operating budgets of less than $5 million, which tends to cause issues in their financial sustainability. This can cause a nonprofit to have fewer resources and tools at their disposal, as well as staff being under-compensated for their work. In order to avoid these issues, here are a few ways you can work on making your nonprofit financially sustainable.
Develop Ways To Earn Income
Many nonprofits begin by relying on grants in order to stay afloat. As they grow, it’s important that they begin to shy away from this reliance and begin aiming to get at least half of its day-to-day budget from earned income. Nonprofits have to find ways to generate cash and then channel that cash back into their organization. A great way to do this is to running some sort of business such as a thrift store or creating a product for sale.
Collaborate With Other Nonprofits
One of the reasons so many nonprofits have issues staying financially stable is because they choose to go it alone. There are a myriad amount of other nonprofits out there and with so many, that also means plenty of opportunity for collaboration. Seek out an organization that has similar goals to yours, and combine resources. Whether it be sharing office space or just simply sharing ideas, there are plenty of great ways you can work together to achieve your common goals. It’s also better to hire a nonprofit for services and expertise as opposed to hiring a commercial vendor, as it keeps the money in the nonprofit world and benefits everyone.
Modernize To Improve Efficiency
Staying on top of current trends in technology and technique is pivotal in any business. Technology is constantly evolving, so there are practically unlimited ways to use it to improve your operations. Do you use a large amount of paper for your job? Are mundane tasks being done by human workers? There are plenty of ways a nonprofit can change that, and technology is usually the answer. While adopting new tech might cost a lot upfront, the perks it adds to your organization make that cost far less in the long run.
Running a nonprofit is not an easy task, but there are plenty of ways to make it work. Nonprofits are an integral part of American society, and it’s important that they find ways to thrive before they flicker out.