Even though nonprofits spend nearly 37% of their fundraising dollars on overheads and costs, most nonprofits run on budgets that are already quite lean. Very few NFPs have areas of obvious overspending that are easily identified for reduction. Boards need to exercise caution when looking for ways to cut back and lower costs and avoid reducing the quality of services that they provide to recipients.

The following is a list of areas and categories where nonprofits can make adjustments on expenses when funding has been reduced by cutbacks or other shortages.

Staffing

While volunteers are essential to getting the work done, many nonprofits still offer paid positions such as administrators and other support staff. No one wants to cut jobs but sometimes it is necessary to avoid limiting services.

Perhaps it is time to investigate what roles can be combined. It may be possible to cut back on the hours that your staff works and preserve jobs, while trimming a few hours from the weekly payrolls. Shifting some tasks over to your volunteer force can also help your nonprofit to reduce payroll.

For specialised job duties such as legal advice, IT, or assistance in the office during peak periods, consider using the power of the internet to outsource these functions on a temporary, or as needed basis, rather than hiring someone to fulfill these roles full time.

Supplies and Services

Look for ways to reduce the cost that your nonprofit pays for supplies and services on a regular basis. For example, consider joining a nonprofit association that will allow you to pool with other nonprofits to earn discounts on insurance and other products that you regularly use and need.

Consider making bulk purchases of supplies if doing so will give you a net reduction in costs over time. Of course, this will only work if you can easily store the supplies for extended periods of time and at no additional cost.

Can you cut the cost of printing services? Consider using a managed print service to help lower costs, and find the means to make the switch to electronic forms of communication for at least some of your nonprofit’s materials. Seek out alliances with local businesses that might allow you to include your nonprofit’s promotional literature along with the mailings to help you save on postage.

Assess your nonprofit’s telephone service and seek ways to reduce the costs that you pay. Many nonprofits pay for unused minutes on a regular basis, or, overpay for duplicate services. Making a few reductions in lines, or, overall minutes may help your organisation save hundreds of dollars each month!

Use Free Tools and Social Media to Reduce Marketing and Advertising Costs

Direct mail campaigns, advertising on live radio, or broadcast TV, are all very expensive. Reduce costs by searching for ways to connect with others and get your nonprofit’s message out there, without spending a lot of money.

A social media campaign is typically low in cost, and can even be done for free in many cases. Free tools can help you manage your media profiles and schedule posts, tweets and other messages – days, weeks and even months in advance. This makes it easier to keep messages circulating to raise the awareness of your mission. Get the nonprofit’s board members involved with reducing fundraising costs by recruiting them to seek out sponsors and partners for your nonprofit’s events. This will help your nonprofit conserve resources and reduce costs while it raises money to support the nonprofit’s mission.

Sourcing Revenue

Look for ways to raise revenues to make up for potential shortfalls elsewhere in your budget. For example, does your nonprofit have tangible assets that might be costing it too much in upkeep and insurance? Why not consider selling underperforming assets and using the funds raised to make up the budget shortfall rather than cutting costs elsewhere.

Rather than eliminating a service altogether, would it be possible to charge a small fee for the service to help offset its cost and enable your nonprofit to continue to offer assistance in this way?

Are there services that your organisation is duplicating that another local nonprofit is also providing? Why not look at a strategic partnership or unofficial alliance where each will offer services that complement the other rather than duplicating efforts and wasting resources? This will allow both nonprofits to focus on keeping the services where they have a genuine impact.