Ways Nonprofits Can Save Money

Often times, nonprofits find themselves constantly putting out fires, with no time left to truly manage their organizations. But it is critical that those in charge keep costs in mind and seek to proactively make their organization more efficient. The following tips empower nonprofits to use their limited resources for maximum effect.

Savings Tip #1

Beware of supposed savings on office supplies, janitorial supplies or light bulbs through the mail or by phone. In most cases, the savings are due to poor quality of the material in addition to outrageous shipping and handling fees. If you are in need of office supplies, why not try the local Staples or Office Depot? The store managers have the authority to donate items to nonprofit organizations.

Savings Tip # 2

To save on utility costs, ask your local utility company to do an audit to determine how to save money. Possible ideas include putting on a window tinting, placing water saving units in your toilets, or installing hand dryers to reduce paper towel usage. As you look to save money, look at the cost of any improvement and the amount of time it would take for you to recover the cost in savings.

Savings Tip #3

In North Carolina and other states, nonprofits can get a refund on the sales tax they spend; however, it is not automatic. You must apply for the refund with the proper documentation of purpose– so save those receipts!

Savings Tip #4

As a 501(c)(3) Non-Profit Organization, the federal government has provided you the luxury of ‘opting’ out of the state unemployment tax system and directly reimbursing the state for benefits paid to former employees. Opting out of the state unemployment tax system can save nonprofits a considerable amount of money; however, the decision exposes the nonprofit to self-insurance risks. For more information go to: Opting Out Of State Unemployment Taxes

Savings Tip #5

If your organization does direct mail or mails out newsletters, you should consider obtaining a nonprofit bulk postage permit. By making changes, like adding the nine-digit zip code as well as bar codes, you can further lower postage cost.

Savings Tip #6

Beware of in-house printing for your newsletter or other printed materials. While today is the age of everyone using high-tech computers and printers allowing most of us to produce a wonderful looking product, be careful. Make sure you honestly run the numbers on all the cost. Include the time staff spends on printing and folding, the repair cost to the copying machines and supply cost, versus taking the project to a local printer.

Savings Tip #7

Invest in prevention! It is vital to take precautions for big and unexpected expenses. Every nonprofit should have “directors and officers insurance” that covers the board in case of lawsuits. You should look at a wide range of insurance, including fire, flood, plate glass coverage, computer hardware and software, theft, and dishonesty. Executive directors of an organization should also be insured personally.

Savings Tip #8

Invest in accountability. You should have a “Board Member Performance Plan” for everyone who is asked to serve on the board. Board members need to know what is expected of them; in addition to advising, they must be active in raising funds and providing the vision for the organization’s future. Likewise, there should be written job descriptions for all staff members, as well as the minimum of an annual review.

Savings Tip #9

As a general rule, when you are planning a major purchase or contract for a service, it is best to get three written bids. This method provides competitive prices and accurate comparisons.

Savings Tip #10

Calculate the full cost of buying a service, or product. Read the fine print to see if there are any hidden charges– sometimes there are delivery or special maintenance fees.

Savings Tip #11

Ask for a discount on everything! You are not going to get it unless you ask. Besides, if you truly believe in your organization and can express your passion to others, asking should not be that hard.

Savings Tip #12

Buying essential products in bulk can help your organization keep down costs, as long as you have a need and a storage location for the supplies for the foreseeable future.

Savings Tip #13

Establish a budget, and keep staff aware of your finances. Allow staff to “own” the budget and give them the responsibility and authority for sub-budgets. To be useful, the budget must be honest and fully justify any increases shown from the previous year’s budget. Sometimes in nonprofits, when executive directors draw up the first draft of the budget, they tend to increase the expected donation revenue from the previous year without honestly having a plan to back this up. The budget is the organization’s blueprint for the year ahead, as it lays out in monetary terms the specific goals and objectives that the board and staff are expected to achieve. On a monthly basis, the staff and board should look at the budget and make adjustments as needed.

Savings Tip #14

Establish written policies and make sure the staff members know each one. Be consistent in your enforcement of these policies. Otherwise, you will open up yourself and the organization to a lawsuit.

Savings Tip #15

Buy at the right time of year. Nonprofits typically buy items the day they need them and not before. However, you might plan ahead and ask a supplier when an item might go on sale.

Savings Tip #16

Use volunteers instead of staff. However, don’t fool yourself into thinking that a volunteer is totally free. Any good program requires that a volunteer is trained, which does cost money.

Savings Tip #17

Join with others in a group-purchasing program for equipment, supplies or services. While many national organizations already have these programs, you could even consider starting one locally. The purchasing power of your nonprofit community may surprise you.

Savings Tip #18

Evaluate the cost effectiveness of every program your organization runs. It is essential to know if you are getting the bang for your buck while providing the programs; if not, could you do something else to better serve your clients?

Savings Tip #19

Evaluate your fundraising plan and modify events that may be no longer be fresh. For example, if your organization is about to hold its twentieth annual fundraiser out of habit, try to think outside the box and produce a more exciting event that’s specific to your organization. Your board’s time is valuable, and there are only so many fundraising events you are going to be able to motivate any board to do.

Savings Tip #20

Do not automatically pay late fees, interest charges or bank fees. Ask for fees to be waived if you normally are a good payer of your bills. Even with banks merging and growing larger, they still want a strong community presence;  no bank wants to get a bad reputation for not being kind to nonprofits.

Savings Tip #21

Review your bills. People and computers make mistakes. Don’t pay a bill on blind faith. If you did not get what you paid for, dispute the bill.

Savings Tip #22

Seek professional advice– it’s impossible to know everything yourself! The best board is made up of professionals. Consider having at least one lawyer, accountant, and insurance agent.

Savings Tip #23

Keep current with labor laws and other laws that affect your organization. You may need to subscribe to a newsletter or other publication to get the information you need.

Savings Tip #24

Look closely at your organization from the perspective of safety and security. Is the work environment safe? Are the parking lots lit with proper lighting? In case of fire, does everyone knows the evacuation routes and where to meet? With the help of the proper insurance policy, these risks can be promptly combatted and minimized.

Savings Tip #25

You should keep backup copies off-site of any important records like financials. This should be a part of your overall disaster plan that you should establish.

Savings Tip #26

Find free office furniture and other equipment by asking the major corporations and banks if they have any they would consider donating. Every state agency has a surplus property program. Universities and community colleges have similar programs, and you may be able to talk with them at a local level and receive a donation.

Savings Tip #27

Authorized nonprofit organizations are eligible for additional savings. Nonprofit organizations and businesses use Standard Mail® the same way. The only difference is that authorized nonprofit organizations are eligible for additional savings on Standard Mail. Eligibility to use nonprofit rates is based both on the eligibility of the organization and the content of the mailpiece as established by federal statutes. Authorized Nonprofit organizations can use Standard Mail or Enhanced Carrier Route mail.

Eligible Organizations – Simply being an IRS-approved nonprofit organization does not qualify an organization for these rates. Typically, there are 10 categories of organizations that may be eligible.