The Real Cost of a Nonprofit

By nature non-profits are focused around a strong mission, one that is often more altruistic than “let’s make lots of money”. They nearly always use volunteers and nearly in all cases they rely on the passion of the individual working for them to keep their costs low and put as much into the mission as possible. Is your organisation reaching its mission as well as it could be?

Always driven by the need to keep costs down and to fundraise nonprofits and charities are some of the most lean operations around. However this can lead to another big cost. One that can eat away at the very mission and values that the organisation rose to fulfill.

Labor becomes cheap and in turn people become cheap.

Low salaries and cost cutting can lead to devaluing their staff and volunteers. This can often be seen in the high churn rate among staff and volunteers.

From an operational perspective there are a couple of issues that need to be addressed.

  1. Business continuity
  2. Strategic efforts
  3. Efficiency and innovation

Business continuity

We’ve all seen the nfp that each time releases some marketing collateral it looks completely different. Each time they get a volunteer to help out who brings their own ideas and doesn’t fit their work in with an existing brand apart from slapping a logo on the top. In fact it’s most likely that the NFP hasn’t even got full brand guidelines and a developed style. A logo isn’t a brand.

Mostly I see organisations run by people who just ‘know’ what to do. They have all the things inside the admin’s head. If you’ve heard yourself say “we could never get anything done without X” then this could be you. As you get more systematised you might see some post it notes for basic processes or a paper checklist. But essentially the process can’t be reproduced by someone else. This means that if that person is unavailable, you’re in a bad spot and it also means you can’t scale.

Side note: Scaling is seen by many NFPs as a bad thing because their for-profit brothers are so focused on it. However most NFPs also want to reach more people or save more whales. If you truly care about your missing scaling will be a part of it.

Part of the solution could be to put in place ‘digital’ systems and processes. Map everything out that needs to be repeated. Make workflows so everything can be tracked. Tell people what needs to be done and automate everything under the sun. Imagine the power of having a strong donor onboarding process. One that is repeated and refined with the human effort going into the relationship?

Strategic Efforts

When we begin to see the NFP workers as valuable human capital we want to get the most from their efforts. Why have someone who is passionate about your cause spend the day fixing email addresses when we could have them advocating for the cause?

When you have a simple but time consuming task it’s easy to get a volunteer or cheaper staff member to do it, rather than find a better solution. Data entry, folding envelopes, admin, phone calls etc could all potentially be streamlined, outsourced and more automated.

Putting in place digital systems and processes to do the menial tasks gives you resources for higher value work. It’s even more critical than in business. It means the organisation can focus on their mission better. All staff will be valued and used to drive the mission forward.

The ‘expensive’ systematisation, process driven and automated system will lead to a great mission reach. You’ll save more turtles.

Efficiency and Innovation

I’ve never worked or even seen an over staffed NFP! There is always too much to do and not enough people to do it. It doesn’t take long for an organisation to get into reactive and damage control mode jumping around and struggling to keep things going. If you’ve found yourself wishing you had more to work with (and who hasn’t?), then building your organisation on digital systems is the smart move. Simply put you can get more done with less.

It will also allow the time for innovation. You’ll see interesting data trends that you can action. You’ll enable your most precious resource (your workers) to develop ideas and put a human touch into what they do.

Take full advantage of the digital tools available to your nonprofit.

These systems must be digital, here’s why, digital is:

  • Collobrative
  • Easy to update and change
  • Automated
  • Transportable (work from home)
  • Consistent

A new class of service has risen over the last 5 years allowing you access to very intelligent software that you don’t need to put on a server and spend large amount to see if it will work. Called Software as a Service (SaaS) you can run your organisation from the cloud. Gone are the days with the $10,000 server up front cost. You might start of a free trial or limited edition account and work your way from there after you start seeing real benefits.

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