4 ways to make your Non-Profit Organization sustainable
If you thought that in this highly competitive world, philanthropy is dead, then think again! When it comes to carrying forward the missions of a welfare state by private individuals or non-profit foundations, we agree that there could be several chokepoints. The way the world perceives charity needs even more attention today than before. Non-profit organizations have to be now seen through the prism of diversity and inclusion. Only when an effective attitude towards the whole idea of ‘giving and helping’ is celebrated enough will there be a process created to limit the downsides of the nonprofit sector and nonprofit sustainability. Subsequently, more robust infrastructure with strategic planning would be built that does not compromise the social services sector.
Despite the fact that only a handful of people and groups extend a helping hand towards expanding non-profit goals, it is crystal clear that this sector needs thorough planning for its sustainability, let alone growth. The nonprofit sector goes through several pain points. However, most of these issues are directly or indirectly related to insufficient funds needed for support and scaling. In this direction, the most significant step forward for non-profit organizations is to build a suitable plan that helps generate funds with the utmost efficiency!
What are nonprofit organizations?
According to Investopedia, a nonprofit organization is a business that has been granted tax-exempt status by the Internal Revenue Service (IRS) on account of its work towards social causes that benefit the public. A ‘nonprofit’ designation is given only to organizations that do not support any political causes but promote charitable, scientific, religious, educational, health, cruelty-prevention, community building, public safety, and other social purposes. Essentially, nonprofit organizations include hospitals, schools, playgroups, universities, churches, national charities, and foundations.
The primary goal of nonprofits revolves around serving the public either through offering goods, services, or a combination of both. Nonprofit organizations are required to make their finances and operational information transparent and available to the public so that donors are well informed about how well their contributions are being utilized to ensure long-term sustainability.
What are the common problems that hinder smooth functioning of Non-Profit Organizations?
- Financial Instability
- Donor Engagement
- Volunteer Recruitment
As mentioned above, nonprofits face many challenges in terms of sustainability. Do they have chaotic communication? Is there an issue with funds flowing in? Or is the board of management bull-headed? Understanding a few of the common pain points experienced by nonprofit organizations will help uncover ways to mend these problems and find practical solutions that optimize charitable activities.
1. Financial Instability
As finances and budgeting are among the foundation issues facing nonprofit organizations, a healthy way to build a stable financial system is to employ structured management keeping the organization's mission and vision statement in mind. Spending enough money as it comes is a colossal blunder. Proper planning and effective practices like financial management, including budgeting, strategic planning, diversifying funding sources apart from government grants, government funding, etc., helps build stability, rely on income streams, financial sustainability, and flexibility in driving social and community-building goals.
Effective budgeting offers a bird’s eye view that helps in planning ahead for all the expenses needed to achieve realistic goals. Budgeting also helps build accountability, understand what sectors work and what don’t, and compare actual cash flow and expenses. Once a clear budget system is formulated, it provides sound information to understand the costs for running various programs in a nonprofit organization. In fact, budgeting impacts every other decision taken in a year by an organization, be it in terms of program costs, fundraising decisions, staff allocation, and the like.
2. Donor Engagement
Nonprofits run primarily on funding received through sizable donations. In that case, these organizations also have to live up to donor expectations. Individuals and corporations will only donate if they trust the cause of the nonprofits. Donors’ commitment, belief, and trust are significant propellers in driving donations. According to a study published in Fortune, in 2020, Americans gave a record of $471 billion in charity despite an economic downturn and disruption of paychecks. It was a spike of 5.1% from the previous year. Most of the donations were made to educational non-profits and other charities. This stepping up was in the backdrop of the global pandemic, racial unrest, and economic crisis. Hence how a donor feels about circumstances and the cause of a non-profit is a major contributing factor.
Nonprofits should always keep an eye on how donors feel about the organization in terms of trust-building. It helps them to fine-tune the strategy needed to nurture donor engagement and build better relations. Donors’ commitment could be easily fueled by nurturing engagement even after one makes a donation. Use methods like donor surveys to learn how they review your organization or a ‘thank you’ email to convey your gratitude to their charitable gesture. Also, keeping your donors in the loop by notifying them every time your non-profit takes up a project in hand or completes a project successfully, with detailed information on the impact measured, is a great way to attract engagement and retain donors in the long term. Regardless of the amount, always keep your donors engaged in numerous ways. The non-profit sector could also adopt fun practices to raise donations like arranging charity events, sports tournaments, exhibitions, auctions, and the like. Creating an environment where it doesn’t feel that a donor’s job ends right after they donate actually goes a long way in engaging with donors and leveraging recurring donations predictably.
3. Volunteer Recruitment
Volunteers are priceless assets for a nonprofit organization. It is the team of volunteers who carry out all aspects of operating a nonprofit. Also, these individuals give their time and effort to an organization and further their mission and goals because they believe in that mission. Right volunteer recruitment has therefore been challenging for nonprofit organizations at times. Volunteers help in many ways, such as supporting nonprofits in their causes, operational management, support to beneficiaries, financial management, impacting turnover rates of donors, effective communication with donors, and engaging with the larger community. In fact, if the contribution of volunteers is to be deciphered in quantitative forms, a recent study shows that about a hundred million people volunteer each year with an annual value in the range of $150 billion.
Another report by Fidelity Charitable shows that 50% of volunteers of a nonprofit organization give more financial support to the organization because of their integrity to the cause. The same report also suggests an important part that 58% of volunteers are more likely to support a charity before even volunteering. It indicates that there are huge chances that existing donors turn into volunteers themselves if they understand why they want to be a part of a particular nonprofit organization.
This makes volunteer recruitment a crucial aspect of a nonprofit organization’s sustainability. Keeping a few things in mind will help nonprofit organizations take in the right person. Say, for instance, In the nonprofit context, why does a person want to volunteer? Is there any special connection that they feel to be supporting the organizations’ cause? Do they have any particular skill-set that would be beneficial for the nonprofit sector? How many hours could they contribute, considering they might also have a full-time job? Do they have past experience in working in a similar role?
Interacting with potential volunteers gives an idea of what is expected and should be duly given an opportunity. Not to forget that volunteerism also brings in more donors into an organization, as many also start with volunteerism to get a sense of how a nonprofit operates and offer money and support as well.
Having gone through some of the core challenges that nonprofit organizations commonly face and discussing how to put two and two together, a broader focus could also be drawn regarding additional measures that nonprofits can take to avoid facing those challenges in the first place.
What are the ways to make a Nonprofit Organization sustainable?
- Team Building Efforts
- Diversify Fundraising
- Rigorous Marketing
- Adopting Technological Solutions
Let’s deep dive into the ways nonprofits could transform their operations and management better.
1. Team Building Efforts
Team building efforts for nonprofit organizations do not hugely differ from for-profit businesses. The first step in building a team begins by recruiting the right people with value and vision. Nonprofits should make sure that they have the most suited people for the job, who are driven by outcomes. Smartness and productivity are one thing but identifying the right talent and putting that to use is something that measures a lot. For example - The most common challenge for Nonprofits has been in managing finances and budgets. Hiring skilled people in carrying out financial activities, budgeting tasks, etc., can help overcome this problem. Similarly, someone with good communication skills and a mission-driven mindset would be more suited to a role that helps nonprofits accomplish their vision of philanthropy and charitable goals.
Secondly, the only big difference perhaps is the budget allocation, which is naturally smaller for nonprofits. Team-building exercises for nonprofits are pretty basic, yet incredibly crucial to help employees work in tandem towards the organization’s goal. However, at the end of the day, even employees of nonprofit organizations go through a similar phase of stress, loss of productivity, and burnout. Hence it is crucial to figure out creative ways to keep the team motivated and driven. Like profit-making corporations do, elaborate team-building exercises should be planned for nonprofit employees as well. Arranging lunches, retreats, and get-togethers help teams to bond better.
Active internal team communication is imperative to keep everyone in the organization informed, updated, and engaged. One can accomplish this with a sound and healthy work culture that constantly keeps employees motivated. Nonprofit employees should get their due recognition and ultimately better long-term career opportunities.
As highlighted by Forbes, a recent report suggests an alarming trend across nonprofits in the US where it is expected that 45% of nonprofit employees will seek new jobs by 2025. The most pressing problems faced by nonprofits, as mentioned in the report, are:
- Low pay.
- Seemingly no good long-term job opportunities.
- The fact that nonprofits are not well-run businesses.
The report actually provides excellent insights on how a nonprofit organization can plan team-building better. It is all about getting the absolute best onboard, even though it is quantitatively more minor. This will lead to building a resilient organization and be a well-paid career opportunity for qualified and interested folks, ensuring a happier and more sustainable team.
2. Diversify Fundraising
It is no secret now that fundraising still remains the number one factor influencing the growth of a nonprofit organization. Just like how it works for other organizations and corporations, operational costs and program costs keep growing as an organization grows. Hence for long-term nonprofit sustainability, depending solely on a single revenue stream may not be wise. Therefore, identifying a diversified fundraising strategy is the need of the hour. This will not only keep your organization afloat but also ensure that your funds don’t dry up and help you prepare better for things that you wouldn’t be able to control otherwise.
Apart from focusing on individual donors, try new revenue streams such as grants, donor-advised funds, major gifts, or corporate sponsorships as part of CSR (corporate social responsibilities) programs. Before that, examine your potential new donors and devise unique strategies to bring them into your donor-leads cycle. Having general information on who is more likely to donate to a particular cause is a straightforward approach to potential donors. Say you are a religious nonprofit; in that case, try and identify households that are more into religious services. People who habitually follow a path are likely to trust a cause that reflects their life choices. This can serve as a critical philanthropic pointer in researching new prospects.
Additionally, a well-discussed plan and proposal for grant seeking help further in your fundraising efforts. Building personal connections with prospective donors helps in strengthening revenue streams better. It is like building a community of donors who believe in a cause and making them very much an integral part of the grant cycles rather than a one-time contribution.
3. Rigorous Marketing
The way concepts of branding and processes of marketing work for any other organization, Nonprofits should also try their hands at selling the cause that they believe in so that more and more people in the society can join hands to make a difference. Marketing is the only solution to get the word out about your nonprofit organization, without which the fundraising reach or a systematic engagement through awareness-building is difficult to attain.
Indeed, a nonprofit organization might not have as many resources as a profit-making company would love to invest in these marketing goals. Still, there are undoubtedly many cost-effective ways that could be adopted. Like it or not, marketing your nonprofit organization today is surely a necessity and not a luxury!
Branding helps make a nonprofit stand out by positioning the brand appropriately so that it catches the eye of a relevant audience, gives a nonprofit organization’s name the required recognition, trust, and credibility, and builds loyalty among its supporters and donors well. Inbound marketing is one of the most common ways that a nonprofit organization can start.
Marketing is also essential because a nonprofit has multiple target groups - its beneficiaries, donors, volunteers, etc. So an effective branding strategy helps define all these goals at one go so more, and more diverse audiences can relate to the cause and mission of the organization and work accordingly.
B) Content Marketing and Social Media Platforms:
In terms of inbound marketing, Social Media is a great way to sell your mission and has the ability to connect to your audience at an emotional level. The more you develop creative content and display that through relevant social media channels, the more you are likely to evoke emotion to your brand and attract followers, donorship and membership. In fact, social media is the best medium to reach out to a younger audience who mostly have a significant online presence. Social media is also cost-effective to target local groups and specific locations and even run a global crowdfunding campaign.
Apart from social media, professional platforms such as LinkedIn can also help boost your nonprofit organization. A platform that can effectively overlook personal updates and focus on work by organically connecting with people in the most meaningful way. LinkedIn has over 165,000 nonprofit pages, and it is the hub of professional connections. Posting information about your charity, success stories, weekly updates, fundraising events, volunteer opportunities, and related industry news could reach thousands of meaningful audiences out there looking out for opportunities to either work or contribute in any form.
C) Email Marketing:
Another very effective form of marketing your nonprofit organization rigorously is through outbound email campaigns. In the road to finding a lasting relationship with either a donor base, driving more donations, or simply expanding your reach, email marketing helps nonprofits engage more readers and subscribers. It helps to get a quality email list interested in your avenues and curate personalized messaging to nurture your network. Emails and newsletters are cost-effective ways to build curiosity through your stories, blogs that also reflect your vision statement and make potential donors connect with your cause as much as they believe in their philanthropic goals. Using a winning subject line to grab attention goes a long way in successfully getting conversions from your email database.
4. Adopting Technological Solutions
Nonprofits are undoubtedly busy organizations. With minimal staff and a lot of work at hand, they run the risk of spreading too thin at times. Having an online presence in terms of an official website or online booking software can organize multiple events and help prioritize work better for someone running a nonprofit organization. Managing huge events, streamlining communication with members, sponsors, donors, staff, and volunteers, and day-to-day tasks need tremendous planning and execution. Connecting these dots most efficiently with limited resources and eliminating every chance of encountering counter-productivity helps a system survive and succeed.
Simply put, being up to date with the latest technology helps nonprofits to do more good in less time! Moreover, the use of a software solution helps in several ways. In terms of keeping records, technological solutions diminish human error, faulty double entries, or the redundancy that an organization has to otherwise go through in a manual pen and paper system or multiple spreadsheets. It simplifies data storage, consistency, and accountability.
In addition to managing data better, intuitive software also helps nonprofits track the activities of their donors, members, and staff. In the aspect of funding, charity, and accounting, using the right software can help store information in secure servers to protect your donors and other stakeholders involved. Thus, a thriving nonprofit organization would always think of how to analyze data well, segment it and use it for furthering marketing goals to get more prospective future donors.
Another way that software can help is through streamlining bookings and event registrations. Say you are a charitable school or hospital, then your students or patients could get easy bookings and appointments. In terms of employee or volunteer management, scheduling software helps update schedules, allows transparency on recurring shifts, and manages changes in your calendar efficiently. Therefore booking software helps nonprofits face every challenge related to fundraising, hosting and promoting events, volunteer recruitment, and nurturing a community as plain sailing as possible.
Ultimately, the Nonprofit sector works pretty much like regular businesses. However, an average nonprofit usually runs on a tight budget. So adopting affordable technology solutions is the cherry on the top!
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The nonprofit sector goes through many pain points. Read this blog to make your nonprofit organization grow and be sustainable in this competitive world.