Money-Saving Tips for Nonprofits in Inflationary Times
As we continue to hear on the news and read in publications, inflation and prices are at record levels and have been a concern for many individuals and businesses. Already on shoestring budgets, nonprofits are looking for new ways to save money. Consider the following ideas whether your nonprofit is thriving or struggling.
Leverage Consultants
In today’s labor market, competition for skilled labor is fierce. Nonprofits are forced to compete with professional service firms and other private and public companies to retain and attract talent. Some nonprofits are leveraging professional service firms and their skilled labor to help with back-office functions like accounting, wealth advisory, HR, payroll, and IT/cybersecurity. By using consultants and contracted workers, nonprofits can scale skilled services to meet their demand all the while not paying full salary and benefit packages to retain that same level of skilled service. This creates flexibility and helps to mitigate risk for many organizations as these fields continue to rapidly change and evolve in complexly.
Retain Employees
Retaining employees is a critical money-saving strategy. Many writers estimate the average cost of replacing an employee at roughly 1/3 of a worker’s annual salary, not to mention other soft costs such as the impact on morale and culture. Nonprofits should focus on creating a positive, inclusive culture, while providing opportunities to all employees. Compensation, benefits, and other rewards/perks should be reviewed rigorously to remain competitive in today’s labor market. Preventing turnover saves money and it is all about focusing on the nonprofit’s number one asset, its employees.
Retain Donors
Donor retention is all about creating a steady flow of revenue, but, just like employee retention, losing donors can be expensive. When donors are lost, nonprofits need to spend more time and effort finding new donors and raising more in new contributions to meet financial goals. The longer donors give, and the more donors feel connected to the missionary work performed, the less expensive fundraising and contribution solicitation can be. Keep it simple, be intentional, and thank your donors for all they do. Additionally, always keep donor retention rates and metrics front and center so trends are being monitored regularly. Doing these things can help lower direct expenses for marketing, advertising, meetings, and travel and entertainment.
Go Paperless
Many nonprofit organizations continue to operate in a paper environment, creating waste in the form of unnecessary supplies and waiting while documents are physically routed through the office. Going paperless can reduce office supplies like ink, paper, and writing instruments, but, more importantly, it can make operations more efficient. Wasted time for maintaining records and managing the organization’s operations can be reduced and helps to free employees to focus more on revenue generating and mission-facing activities. Wasted time is wasted money, so improving productivity is equally as important as cutting direct expenses.
Invest in Automation and Digital Options
Technology and automation is a constant disruption that should be embraced by nonprofit organizations. Increased reliance on technology and automation can help improve processes, strengthen controls, and help create an efficient work environment. It seems counterintuitive but investing in technology and automation now can prevent significant amounts of wasted time and effort and money now and prospectively. Examples of direct expenses that can be reduced by enhanced technology and automation are travel, meeting, fundraising, supplies, rent, utilities, and surprisingly, technology and computer expenses.
Additionally, organizations should consider leveraging online platforms and mediums for donor solicitation and collection. If used properly, technology can create easy and efficient ways for donors to give, which, ultimately, enhances the donor experience. Preparing, soliciting, collecting, and maintaining physical donations should be a thing of the past as it is a time-consuming process and limits a nonprofit’s ability to reach new donors. It puts more work on existing employees and governing bodies to drive new growth verses leveraging created websites and applications. There are many providers and services to choose from that can help collect and maintain donor information for minimal transaction fees. Leveraging technology also gives nonprofits more information to evaluate trends. This data can provide better insights into donors’ interactions on event pages and websites and help spot new trends in giving.
Nonprofits should be expanding its ways of reaching the communities they service. Leveraging social media platforms like Facebook, Instagram, LinkedIn, and Twitter, should be used to help reach new audiences and educate on how well the organization is doing and the events they plan to hold. These platforms are relatively inexpensive to use, however, a strong social media presence can really help boost awareness and support.
How CLA Can Help?
At CLA, we promise to know you and help you. CLA has the seamless and professional services to help nonprofits navigate the current inflationary environment. Below are a few services that may be of interest as nonprofits look to address the cost saving measures noted above.
- Nonprofit Outsourced Finance and Accounting Services
- Business Opportunity Assessments
- Data Analytic Integration and Implementation
- Cybersecurity and Awareness Training
- Technology Consulting and Outsourcing Solutions
- Talent Solutions and Workforce Strategies
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