The Secret of Nonprofit Success

8 Tips to Run Your Organization Like a Business

The road of a nonprofit is a varied path, but at the end of the day, our goals remain the same: to improve and strengthen the organization. It seems simple enough, right? It should be this easy, but it is often much more complicated.

We have worked with several nonprofit organizations over the years and found that many people have very strong ideas about how a nonprofit should be run, but few actually have training or experience in the arena of nonprofit management.

The reality is that a nonprofit organization is a business and should be run like a business! To be successful, one simply has to adjust their mindset with the following guidelines:

1.  Strategic planning. Every organization has a vision, and time should be spent regularly sharing, growing and strengthening that vision among the staff and board members. It is important that each board of directors establish a clear set of goals they want to accomplish during their reign to help keep them focused and on track during their tenure. The group must also meet periodically to evaluate their progress. Otherwise, goals can easily be forgotten and organizations can stray off track.

2.  Every dollar counts. In your business, I’m going to guess that you always look for the best value for your dollar. We all want the best quality we can get for a reasonable price, which generally means seeking competitive bids and doing research. Nonprofits make bad decisions because they don’t take the time to do their research, or they presume that Company A will give them the best price, so they don’t look any further. Like any business, nonprofits need to do their due diligence. It is part of the board’s fiduciary responsibility to be certain that the nonprofit’s dollars are being accounted for properly.

3.  Save for a rainy day. One organization we work with had one board member who swore that “a nonprofit organization should never maintain a surplus of funds.” I staunchly disagree! Having cash reserves in periods of reduced funding and limited donors certainly prove the case that these vulnerable organizations need to save some financial resources to sustain their mission during difficult financial times or other unforeseen circumstances.

4.  Vegas Trap. In the quest for making money, countless organizations spend money they don’t have in the hopes of making money on the back end. But just like in Vegas, when you are working with a nonprofit organization, you must minimize the risks you take financially. Sure, a large fundraiser sounds like a great opportunity, but if you can’t guarantee that you will fill the room with generous participants, it could be a crushing loss for the organization.

5.  Document your work. A board devotes countless hours to direct an organization, and so will many other people. Accurate records must be kept, not just of the board meetings, but also at the committee meetings, so future generations can understand and learn from your efforts to avoid encountering the same problems (i.e., document why Company X was let go as a vendor after 15 years; explain the results of the Silent Auction at last year’s Gala, noting what went well and what the committee wished had gone better).  Documentation provides a legacy of legitimacy from the outgoing members for continuation of success from future members.

6.  Build a better board. Put some thought into what type of professional could strengthen your organization. It is important to have a financial guru in the mix, but you certainly don’t need six of them. Mix it up – each organization is unique, but key professionals include a lawyer, accountant, a marketing expert, a planner, writer, designer, a web expert, etc. Depending on your organization, it is also important to have a balance of male and female representation as well as an ethical diversity. Set up a simple guide about what is expected of your board members. Letting board members understand what your expectations are before they join makes for a much more focused and fruitful relationship.

7.  Keep it simple. Nonprofits are dependent upon the commitment and the work of their volunteers. If an organization has trouble defining itself, its mission or its goals, volunteers are likely to stray quickly from the group. Volunteers need to feel like they have made a difference through their involvement, so it is best to clearly define expectations and outline opportunities where the nonprofit could benefit from this extra help.

8.  Marketing. You know that you represent a good cause, but without a roadmap to spread the word, others may never know about the fabulous work your organization does. Identify what makes your group special and who you want to reach with your message, and then set out to find that target audience. Properly segmenting and targeting your marketing efforts can increase your potential donor list, volunteer base and attendee list for future events.

A nonprofit organization is a business much like any other, usually operating under a corporate structure, defined by a singular purpose within strict parameters to attain a certain goal.  There’s even a “profit” motive sometimes (namely, fundraising)! By applying basic business principles and a sound approach, a nonprofit organization can ensure its success and longevity.