The main reason why a nonprofit organisation forms is to provide a means for solving a social problem or to fill a need of society. Companies and corporations, on the other hand, focus on ways to maximise their profits and to then return a much of the profits as possible to the owner and any shareholders.

Nonprofits don’t exist to “make money,” but that doesn’t mean that the concept of profit, and its counterpart, loss, aren’t important. In the face of growing competition for donations, and less money in Federal and State Budgets for grants, and endowments, most NFPs are facing increased pressure to ensure that they provide services in a cost-effective manner. Operating a charity or association at a loss for an extended period not only threatens the long-term growth and sustainability of the organisation, but it also invites increased scrutiny and potential negative backlash from donors and other supporters.

The following is a list of a few strategies that nonprofits can employ to help them to be able to operate on a sound financial basis.

What Makes Your Nonprofit so Special?

When for-profit companies compete with their rivals for sales, they emphasise how their products and services are better, or more unique, than those of their competitors. In a similar fashion, if you want to be able to raise the funds that you need to fulfil your mission, it’s not enough to just explain your NFP’s mission to potential donors.

To win funds, you must show how your organisation solves the problem and fills the need in a unique way. Why should donors give to you rather than a similar nonprofit? How are you different than similar nonprofits that are attempting to solve the same problem?

If you are having difficulty differentiating your nonprofit for others, it’s probably time to change things up and look for ways to increase your efficiency and effectiveness so that donors and other stakeholders are receiving more value from their donations. Are there ways that you can partner with other nonprofits and additional third parties to reduce the cost of the services that you provide and increase the impact of donations made to your organisation?

The Importance of Targeted Marketing for Nonprofits

Successful for-profit corporations spend a lot of time and money on researching their target customers so that they can learn about their preferences and how best to connect with them. Messaging isn’t just used to build the company’s brand, but its segmented based on what types of messages, or stories, will best appeal to customers based on their particular tastes and demographics.

Nonprofits can increase the effectiveness of their fundraising campaigns, and become more successful at raising awareness and support for their cause, by emulating for-profits in this respect. Take some time to understand who your target donors and other supporters are as people. What makes them want to connect with organisations and give? Is your messaging on track to convey your brand image, and, is your messaging customised based on what appeals to different segments of your target audience?

Focus on Recruitment, Training and Retention

Engagement is a crucial concern for all for-profit companies. The most successful businesses are increasing their profits by focusing on ways to increase both customer and employee engagement with their business. Customer and employee satisfaction is at the heart of increasing engagement.

Nonprofits can increase engagement with volunteers, donors and staff by focusing on recruitment, training and retention. Just as top companies emphasise the importance of recruiting the right people to fill specific job roles, look for ways to increase the number of talented people that you attract to your organisation.

To attract the best people to your staff, you will need to offer realistic, and competitive wages that are on par with comparable positions at a for-profit company. In order to attract donors and volunteers, you will need to make the experience of supporting your organisation more valuable to them.

Make it easy for people of diverse backgrounds and specific skill sets to connect with your organisation by increasing the number, type and diversity of the opportunities that you offer supporters to volunteer, donate and otherwise work with your organisation.

Increase the core competence and efficiency of your team by focusing on providing in-depth training. Make a point to clarify procedures and processes, as well as the duties and responsibilities, which are required to perform specific functions and fill specific roles.

Offer flexible scheduling and greater autonomy in the way that work is performed to attract and retain the best people. Build the bonds that exist between your organisation and its volunteers, donors and staff by offering recognition and rewards for their assistance to your nonprofit.

Nonprofit organisations can increase their efficiency, and effectiveness, by applying some of the same principles that for-profit companies use to increase their profits by increasing engagement to increase revenues and lower costs. Making these changes enables nonprofits to operate and grow at a sustainable rate over the long term, ensuring that they can continue their work in the community into the future.