The Ultimate Guide to Running a Nonprofit as a For-Profit Business
As an executive director, you know that running a nonprofit organization is no easy task.
It’s important to invest in your nonprofit as much as a for-profit business would, because while most nonprofits rely heavily on donations, it might not be enough to sustain your organization.
That said, here are some helpful guides to help you run your organization like a for-profit business.
Tips for running your nonprofit like a for-profit business
Operating your nonprofit as a for-profit business not only helps you achieve financial stability, but also ensures smooth operations that lead to the growth of your organization. With that in mind, here are some tips for running your nonprofit like a for-profit business:
1. Speak the same language
The main language of business is profit, and that’s because the primary goal of most businesses is to make money. This should be the very notion for non-profit organizations. You need to eliminate 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 could benefit your organization in terms of generating revenue and attracting potential partnerships.
2. Generate multiple streams of income
Is your nonprofit solely dependent on grants and donations right now?
Start thinking about how to generate income by creating revenue streams that will increase your profits and ultimately you will have more impact in your community. Wondering how to create more income? Here are some ideas that might be helpful.
- Create branded products for your organization (eg, t-shirts, hats, shirts, calendars, stickers, etc.). You can sell them physically or create an online store where people can buy them.
- Initiate a monthly subscription for a service in your niche industry that is beneficial to the public. For example, you can set membership fees. You may offer certain benefits to those who sign up for your membership, such as free tickets to events or reduced prices on any service or product you offer.
- Organize events and ask guests to pay for tickets. This will help your organization raise funds, which will benefit your cause.
- Create income by selling your services to companies. For example, you can sell a skill to a company that may need you to build a website or provide cleaning services, among other things. Doing so will earn you extra income that will help you give back to the community.
3. Think of your donors as investors and customers
For-profit businesses are highly dependent on investors and customers for smooth operation. The same goes for your nonprofit organization. When your donors give time and money to your cause so you can have an impact on society, they are investing in your organization.
It is therefore crucial to treat donors as customers by keeping your promises and meeting their expectations, because they are essential 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 must always have solid data or information when making important decisions.
As a non-profit organization, this will also help you to solve organizational, communal and financial problems. A good example of such decisions in business is matching the costs to their benefits so that each area of your organization aligns with its revenue and associated costs.
5. Make short and long term plans
Evaluate your short-term and long-term goals, as this will help you understand how to scale your performance and impact.
Long-range plans are important for nonprofits and for-profits for the following reasons:
- They provide a clear roadmap for the future of the organization.
- They motivate staff members and help them focus on the future of your organization.
- It allows everyone to focus clearly and easily on the objectives of the organization.
Increase your nonprofit’s 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 increase both available equity and generate additional revenue streams, such as donations or memberships, which can then be used to increase balance sheet strength over time.
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