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What Steps Can Non-Profits Take To Cut Their Expenses?

Updated: Oct 12, 2023

All organisations rely on financial stability to survive, and non-profits should not be any different. While you might not be looking to turn a profit, it’s important to acknowledge that overheads are growing. Therefore, taking steps to trim the fat from your expenses is essential if you wish to keep achieving your operational objectives.

What Steps Can Non-Profits Take To Cut Their Expenses?

It sounds like a daunting prospect, especially if you already seem to run a tight ship. Nonetheless, it’s likely that savings can be made through relatively simple changes. Here are six of the best, which can help lead your non-profit to sustainable outcomes.


Focus On Energy Costs


If you have noticed that your expenses have rapidly increased over the past year or two, energy costs are one of the worst culprits. Your non-profit must respond by reducing energy consumption. Dedicated Church heating systems, for example, can help you save a fortune when heating their unique spaces. Other non-profit and charity organisations may look to invest in better insulation. This ranges from roof insulation to thicker windows.


Additional upgrades include switching to LED lights and water-efficient toilets. Whichever steps are implemented, you should also go the extra mile to ensure that you have the right energy supplier and tariff. This may translate to significant savings in the long run.



Check Your Entitlements


In many cases, non-profits are built upon the idea of helping others with financial matters or personal services. However, you should not overlook the fact that your non-profit may need a helping hand from time to time. For starters, you may be able to apply for tax exemption status. Meanwhile, suppliers of certain services that you require may be able to offer reduced rates. This is an upshot of your charity or non-profit status.


Speaking to a financial advisor can open your eyes to other entitlements. Meanwhile, non-profits that make a difference in their communities may gain public support and backers. Overall, then, you’ll be able to increase revenue and reduce overheads.


Embrace Outsourced Services


Your non-profit organisation can only succeed if you have the right people working on its various assignments. You will still need to complete many of the tasks that traditional businesses face. As such, assembling a strong team is essential. While on-site employees and volunteers are essential, you may find that expertise is needed in many areas too. Rather than recruiting workers, paying an outside supplier is often the best choice.


This could mean hiring an architect to design your spaces or a courier to get products out to donors or recipients. Or you may find that using a freelancer directory to find a graphic designer or videographer is needed. When services are temporary, this is the way to go.



Focus On Customer Loyalty


Even as a non-profit organisation, your success will be largely determined by the actions of your client base. While yours may look different to the customer bases of traditional ‘for profit’ firms, those people are integral to the venture. However, rather than trying to reach the biggest possible audience, it could be more beneficial to focus on securing loyal fans. This is especially true when your non-profit is limited in how many people it can support.


A focus on customer retention rates can transform your situation, not least in relation to expenses. Remarketing is statistically far more affordable than reaching out to new customers. By saving money here, you can place a greater focus on other matters.


Know When To Rent


Your non-profit operation will use a large number of assets, just like any other company. When finding the capital for this type of outlay is difficult, it may be better to hire the assets instead. This is also true when looking at commercial vehicles or other products that quickly depreciate in value. It helps with your current cash flow while also saving your venture money in the long run. Making calculated choices in these situations is imperative.


There may also be situations where your non-profit only needs assets for a small amount of time. For example, you may be planning to run a public event or fundraiser. It’s probably better to hire the products needed for this rather than purchase them outright.



Regularly Evaluate Your Daily Operations


Finally, the best way to keep expenses down is to keep seeking improvements. An inventory stock take will allow you to analyse each product and decide whether it’s needed. Anything that’s no longer needed can also be sold to generate added revenue. Decluttering your operations may also allow you to choose a smaller workspace or use fewer resources. Of course, these issues will naturally feed into creating smaller overheads.


When combined with the use of data analytics to check your online strategies, you should be positioned to make smarter decisions. As long as you maintain a consistent approach, your non-profit will be on smoother ground in no time.




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