3 reasons why your not-for-profit isn’t growing

3 reasons why your not-for-profit isn’t growing

Running a not-for-profit organisation? Chances are you're trying to keep costs down to maximise the surplus funds available to reinvest back into the organisation. Our advisory team share their top tips on keeping costs down to help your not-for-profit grow.

Operating as a not-for-profit, it’s important to keep your costs down in order to maximise the surplus funds that can be reinvested into the organisation to help achieve its mission. Seems fairly straight forward, but if you haven’t got the right skills, or are unsure of where to look for cost saving opportunities, it can be a bit of a mind boggle.

Our advisory team have shared their top three areas where you can look for ways of reducing costs, and thus increasing profits for your not-for-profit.

Fixed fee vs an hourly rate

As part of all not for profits the consistent theme is that operating costs need to be kept for a minimum. Government departments like to provide grants for not-for-profit organisations that are restricted with no opportunity of paying for operational costs. This makes it difficult to operate as there are ancillary costs that are required such as audit, website costs, EO costs, staff costs, rent and other operational costs. One method to improve this and reduce costs is to look for opportunities where you can outsource for a fixed fee. Gone are the days where people charge per hour, and the fixed fee resolves the risk of providing more work around year end to complete tasks where other times during the year there is a smaller work load.

Seek volunteers to help your not-for-profit organisation

Staffing levels can be an onerous situation where you need staff to perform tasks, but you are not in a financial situation to employ staff. One area that has been looked at in recent years is to talk to local universities to find willing and able students who could volunteer to work for a specific task in their field to gain experience. One not-for-profit found a student who was still at university but was studying events management. They were able to organise their annual conference very efficiently with the latest technology as the student was interested and learning on the run. She had great ideas and was able to implement a lot of her knowledge from university and run the event effectively and at a lower cost than historically it had been run.

Cost recovery of not for profit grants

Cost recovery when utilising grants is an important part of reviewing the grant agreements. When performing the outcome of the grant try to incorporate a percentage of the grant as operating costs. That means while performing the requirements of the grant, you can allocate a portion of your operating costs. This enables the not-for-profit to perform the outcome and reduce the operating costs. Even still if the EO is able to perform the work, you can reduce their cost by allocating their time to the outcome. Other costs that can and should be looked at is the annual leave component of their salary, applicable insurances and other operating costs. Most government departments are understandable that in order to operate certain costs are applicable. Provided there is an agreement on how the costs will be allocated then the relevant government department should be more than amenable.

If you work with a not-for-profit organisation and would like help identifying how you can maximise growth opportunities, contact our advisory team who will be more than happy to assist.

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