Recent economic fluctuations have put the squeeze on many nonprofit organizations.
According to the Commerce Department’s Bureau of Economic Analysis, personal consumption expenditures rose 5.4% in January from a year earlier—suggesting that rising prices will be difficult to overcome.
With prices rising by 0.6% in January from the prior month, nonprofits are facing the challenge of operating on tight budgets while still providing critical services to communities.
It should be said that nonprofits are not strangers to stretching their dollar. It comes with the territory. However, in order to deal with the current economic situation, nonprofits may need take additional steps to reduce the impact of the long inflationary period.
We know some of the most common methods: diversification, grants, sponsorships, and the tried and true monitoring of expenses. But here are some methods that nonprofits may not have thought of.
Technology can help nonprofits build stronger relationships with donors and volunteers, attract new supporters, and increase efficiency.
For example, nonprofits can leverage social media and other technology platforms to reach a larger audience and spread their message more effectively. They can also hold virtual fundraising events and drive donations without the need for costly in-person fundraisers.
In addition, nonprofits can embrace digital fundraising platforms, such as GoFundMe and Kickstarter, to raise funds from donors all over the world, especially if you have specific projects you’re working on. These platforms provide an easy way for nonprofits to collect donations, track contributions—and communicate with their donors!
Partnering with other nonprofits and local businesses can decrease an organization’s operating costs, increase its audience reach, and help it achieve its goals. Collaborative partnerships also allow organizations to expand their impact while decreasing operational expenses. For example, a nonprofit that focuses on environmental conservation may be able to partner with a company that produces eco-friendly products. This company could provide funding, in-kind donations or volunteer support so the two organizations can work together on their shared goals.
Explore Earned Income
These are ways for nonprofits to generate revenue by selling products or services that align with their mission and values. For example, a nonprofit that advocates for animal welfare could sell branded merchandise (such as t-shirts or water bottles) to supporters who enjoy showcasing their passion.
Or perhaps they can develop and sell digital products, such as e-books or online courses, that advance their mission. For example, a nonprofit focused on education could create an online course in literacy for students and educators—then charge people to enroll in it.
Invest at Home
Finally, nonprofits can invest in their staff and volunteers so that they have the skills and resources needed to thrive now—and in an uncertain future.
Investing in staff development, training and support can help nonprofits attract committed employees and volunteers who are dedicated to the organization’s goals. There are many ways that nonprofits can invest in themselves—and they don’t all have to cost a lot of money. But the key is to start small, and be patient. You might not see results right away, but over time your investment will pay off through stronger relationships with donors, volunteers and staff—and more impactful work in the community.
Proactively finding ways to operate efficiently can help nonprofits continue fulfilling their mission and achieve objectives despite inflation’s challenges. Inflation can be a scary word for nonprofits, but it’s important not to panic. By taking the long view and proactively managing your organization’s finances, you will be able to weather inflation with the confidence that your mission will continue to succeed.
Mission Forward is a weekly LinkedIn Newsletter written by Paul Durban with tools, tips and tricks to help nonprofits reach their goals. Subscribe to the newsletter on LinkedIn.