Whether it’s to help autistic children have access to tutoring or to provide affordable housing for the elderly, the mission of your non-profit organisation is the focus, and requires innovation and business savvy to make an impact.
We reviewed some of the unique distinctions of non-profits in our blog, Non-Profit Accounting and Tax Tips 101. But when it comes to similarities, the parallel between them and conventional business is the approach in which they are managed to provide value. This approach is what we want to focus on in this blog.
Whether a new organisation or well established, there’s plenty of tips here for all stages of a non-profit, so let’s go!
Why You Should Follow a Business Approach
There’s no getting around the fact that providing value, in whatever form or desired outcome, requires the same level of operational proficiency as a conventional business.
However, what is perceived as ‘value’ differs. A non-profit solves a problem with either a product or service, but the value it brings is providing a solution to a societal problem. Whether to feed the hungry or preserve wildlife, a donor’s gratification comes from knowing their investment is supporting the greater good.
In order to realise the greatest societal impact, non-profits must invest in their organisations, as any business would – if not more!
“Everyone wants charities to spend as little as possible on overhead. That’s backwards. Overhead is what drives growth. If charities can’t grow, they can’t solve problems. So overhead is a good thing. And I’m overhead.” – Dan Pallotta, author
Key Components of a Business Approach
In our blog What You Should Know Before Starting a Non-profit in New Zealand, we emphasized that a ‘not for profit’ doesn’t mean ‘for loss’, and explained why you need to put your entrepreneur hat on. We said, “just like a regular business, if you run an efficient operation, you’ll be able to provide a much better service to the people or cause you’re trying to serve.”
A non-profit has accountability to both the community and donors, to operate in a way that meets revenue goals each year, without making unnecessary expenditures.
The following tips will ensure the best chance of making the greatest societal impact.
Act, Speak, and Perform Like a Business
It might seem obvious, but your attitude matters, and will determine your behaviour, choices and habits. Have a look at our blog, Ten Tips to Improve Your Habits and Business on how to disrupt and reboot behavioural patterns that might be holding your non-profit back. Operating it like a business will help cultivate relationships in your community, and develop win-win collaborations with donors or members.
Create Models of Sustainable Income
Donations are fabulous, until they stop. Investing in building stable revenue generating programs or services will ensure you’re not reliant on donor dollars or government grants alone. By making the mission profitable with revenue-generating services at the core of your organisation, you’ll have less dependency on philanthropy.
Understand the ROI
Track, analyse, pivot. Focus on short and long-term returns on investment to ensure your strategy and efforts are bringing in the greatest bang for your buck. Effectively working with the proceeds you have while maintaining expenditures within your budget is a result of responding to positive or negative ROI outcomes. Similar to conventional businesses, doing a costs and benefits analysis could help you to make better decisions on which activities and strategies to pursue.
Take Innovative Risks
Non-profit organisations are in the business of disrupting what is currently the norm, but also a problem to solve, and filling the role as ‘change agents’ to bring improvement to social issues. Making an impact will sometimes require taking calculated risks, which like any business, is necessary for making progress. Seek new ideas and opportunities, and assess short and long-term opportunities to scale.
Keep a Steady Eye on Expenses
Stay vigilant about what funds are not used efficiently. No matter what your income is, it won’t result in much impact if money is going down the drain. What could be trimmed, or donated? For example, evaluate what expense could be procured with a gift-in-kind campaign, to not only cut costs, but attract practical support and involvement from the community.
Invest Smartly
While monitoring expenses and the ROI as mentioned above, put your revenue to its best possible investment in the following areas.
- Your Team. High quality staff results in a high quality organisation. Onboard the best talent for key positions, providing competitive benefits, salaries or hourly wages. Build a company culture that they love to work with, and take care of your people so they are invested in the success of your non-profit. Commit to building your leadership and teambuilding skills. You can learn how active listening can make a big improvement in this area by reading our blog, When Great Minds Don’t Think Alike, Exceptional Things Happen.
- Marketing. It goes without saying that a polished presentation is a deal-breaker in todays’ society. The top necessities are a modern website that is easy to navigate, a solid brand that is unique and recognisable, local advertising, and social media presence. Newsletters, social media with engaged membership groups, and video marketing with a YouTube channel provide limitless opportunities for free marketing and visibility, so don’t skimp on keeping up with any of these activities in one form or another.
- Technology and Equipment. Whether from donations, grants or raised funds, your technology and operational equipment needs to drive the engine of your non-profit. Make the most of free tools and software, but also have the mindset for growth and staying current.
Invest in the Right Accountant
We know that successful non-profits require a unified approach of building a solid foundation, measuring performance, having confidence in your decisions, and evolving strategically in the direction you want. Contact the team at BW Miller Dean to see how we can help your non-profit thrive.
