Five Effective Ways To Operate a Nonprofit Like a For-Profit Business
As an executive director, you know that running a nonprofit organization is not an easy task.
It’s important to invest in your nonprofit just as much as a for-profit business would, because while most nonprofits highly depend on donations, it might not be enough to sustain your organization.
That said, here are some useful guides to help you run your organization like a for-profit business.
Tips for running your nonprofit organization like a for-profit business
Operating your nonprofit like a for-profit business not only helps you attain financial stability, it also ensures smooth operations which leads to the growth of your organization. With this in mind, here are some tips for running your nonprofit organization like a for-profit business:
1. Speak the same language
The primary language in business is profits, and this is because the key purpose of most businesses is to make money. This should be the notion even for nonprofit organizations. You need to remove the misconception that nonprofits depend on for-profit companies for funds and donations.
Relying on this particular mindset will cause you to miss opportunities that might be beneficial to your organization in terms of generating income and attracting potential partnerships.
2. Generate multiple income revenue streams
Does your nonprofit organization rely only on grants and donations right now?
Start thinking of how to generate revenue by creating income streams that will increase your profits, and at the end of the day, you will have more impact in your community. Wondering how you can create more income? Here are some ideas that might be useful.
Create branded products for your organization (e.g., t-shirts, hats, sweaters, calendars, stickers, etc.) You can sell them physically or create an ecommerce store where people can purchase them.
Initiate a monthly subscription for a service in your niche industry that is beneficial to the public. For example, you can enact a membership enrollment fee. You might give those who sign up for your membership certain benefits, such as free tickets to events, or discounted prices on any service or product you offer.
Hold events, and have guests pay for tickets. This will help your organization raise funds, which will be useful to your cause.
Create income by selling your services to corporations. For example, you can sell a skill to a company that may need you to create a website or provide cleaning services, among others. By doing so, you will earn extra revenue that will help you give back to the community
3. Consider your donors as investors and clients
For-profit businesses heavily depend on investors and customers for a smooth operation. So does your nonprofit organization. When your donors spare time and money for your cause so that you can impact society, they are investing in your organization.
It is, therefore, crucial to treat donors as customers by delivering on your promises and satisfying their expectations, since they are critical to the survival of your organization. This satisfaction will motivate them to continue supporting your cause.
4. Embrace informed decision-making
In order to make informed choices for your organization, you should always have solid data or information when making important decisions.
As a nonprofit, this will also help you address organizational, communal, and financial problems. A good example of such decisions in business is matching the costs with their benefitsso that each area in your organization aligns with its revenue and associated costs.
5. Develop both short-term and long-term plans
Evaluate your short-term and long-term goals, since it will help you understand how to scale your performance and impact.
Long-term plans are important for both nonprofit and for-profit businesses for the following reasons:
They provide a clear roadmap for the organization’s future.
They motivate staff members and help them focus on what’s next for your organization.
It makes it clear and easy for everyone to focus on the organization’s objectives.
Scale up your nonprofit balance sheet
In order to streamline operational costs and generate more revenue, it’s important that you run your nonprofit like a for-profit business. This will help grow both equity on hand as well as generate additional revenue streams—such as donations or memberships—which can then be used toward increasing balance sheet strength with time.
At Software Advice, we offer free insights on the best software that suits your business. You can connect with an advisor, or learn more with these additional resources: