No margin, no mission. It sounds like common sense, but many nonprofits seem to think that if they make a profit—a margin—and if they have a healthy balance sheet, they’re doing something wrong.
Being a nonprofit organization does not mean making zero profit. It does mean that all profit is made with an eye toward fulfilling the mission of the organization. The more margin that is made, the more the organization can invest in their programs and the staff and infrastructure that supports them.
Take your cues from the for-profit world and adopt these tips to improve your nonprofits’ profits—money that can be used to support the very mission for which your organization exists.
Five Lessons for Nonprofits from the For-Profit World
- Know your “why” and share it consistently and clearly.
In the for-profit world, marketers speak about knowing the why: why the company exists and why the world needs its products. Nonprofits know their why but often fail to share it consistently and clearly with constituents and donors. Make sure you follow the basics of brand marketing in all your organization’s communications by consistently and clearly articulating your organization’s mission and how it fulfills its mission.
- Embrace marketing concepts.
Marketing simply means raising awareness, and all organizations need to raise awareness of their services. Learning the basics of digital marketing (websites, search engine optimization, email marketing, social media marketing) and using them to your organization’s advantage is integral to its success. Embrace marketing techniques such as segmentation and others as proven and effective means of raising awareness, generating interest, and inspiring action.
- Treat donors like customers.
Customers expect service from the companies they patronize, and if they fail to receive the expected service, they go elsewhere. The same holds true for donors. If they do not receive an expected response from the nonprofits they patronize—awareness, recognition, thanks—they give elsewhere. Keep in touch with donors the way you would customers of a store, sending thank you notes, updates, and more to stay in touch. Don’t take them for granted!
- Invest in technology.
For-profits know that investing in state-of-the-art technology gives them a competitive edge. The same can be said for nonprofits. The wise use of technology can improve program and service delivery, save time and effort in operations and accounting, and increase efficiency. The initial investment in modern technology can improve all areas of your organization.
- Focus on attracting the best employees.
Some very talented people work at nonprofits, but many talented individuals avoid working at nonprofits because they fear giving up perks or benefits associated with the for-profit world. Conduct a benefits survey across comparable for-profit and nonprofit organizations in your area to ensure your benefits package is on par with for-profits vying for the same talent. And, like the for-profit world, be sure to invest in your people. Offer training, educational programs, and more to aid in their professional development. While it may seem like a small thing, it means a lot, especially to those who wish to advance in their careers.
A nonprofit that fails to make margin each year cannot achieve its mission. Learn how to increase revenue from the for-profit world so your organization doesn’t just survive but thrives.
Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.