Many people decide to establish a nonprofit to take advantage of the tax benefits the structure offers. Others want to make a difference in the world. While those are both nice ideas, neither is enough to take your business to success. They operate under different structures and pretexts from other for-profit entities, but nonprofits still need experienced and capable management to succeed.
- Know Your Expenses
Like any business, a nonprofit will have expenses. As its director or administrator, it is your responsibility to know them and plan to meet them. Think beyond the obvious items like rent and salaries. Outreach, transportation and investing in growth are all important. Industry-specific costs may apply as well. Horse insurance cost should be a line item in your budget just like electricity if you run an equine-assisted therapy program.
- Develop Income Streams
The name “nonprofit” can be misleading since these businesses still must earn enough money to meet all their expenses and still carry out work that moves the mission forward. You won’t operate for long if finances remain in the red. Because of its tax status, you have some advantages over for-profit businesses. Look to income-generating ideas like these to get started:
- Fundraising campaigns
- In-kind donations
- Earned income
- Corporate sponsorships
- Focus on Your Mission
A powerful mission statement will help an organization move forward. Learn how to measure success in terms of the progress made toward achieving your mission rather than fundraising dollars or number of programs. This will help you achieve fundraising and program goals by showing stakeholders how you are achieving overarching goals.
- Use Data Wisely
There is a wealth of information available if you know where to look. Use this to your advantage. Find out habits and preferences of donors, learn where the most need is and seek areas where programs can have the biggest impact.
You can’t run a nonprofit like every other business. After all, they operate differently. You can, however, use sound business practices to inform decisions and help your organization achieve its mission and vision.