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Why Nonprofits Should Focus More on Saving Money and Less on Raising Money

By: Maria Werner-- 2016-03-16 8:56 am --

In today’s economy, it’s hard enough for a for-profit business to keep their doors open, more or less a nonprofit organization that relies on donations, grants, and volunteer labor. However, interestingly enough, nonprofits can save money much more efficiently than they can raise it. If your nonprofit is struggling to make ends meet and operate efficiently, consider finding ways to lower your overhead costs.

The Importance of Scaling Back
It seems most nonprofits are constantly scrambling for pennies just to keep their doors open, and it can feel like a perpetual battle to make all of the expenses add up. However, scaling back on spending has actually proven to be an easier and more efficient method of budgeting than fundraising. While fundraising remains a critical aspect of the nonprofit world, frugality can help to keep nonprofits afloat in the toughest of financial times.

How to Reduce Your Overhead Spending
When it comes to scaling back financially, nonprofit organizations actually have a plethora of resources at their disposal. Perhaps the best way to save money is by reducing the investment costs of goods and supplies. By purchasing all of your merchandise, cleaning supplies, office supplies, and employee uniforms from cheap wholesale retailers, you can reduce overhead expenses and allocate your budget more efficiently.

Another way to save money is through utilizing energy-efficient lighting and appliances. Though compact-florescent lightbulbs (CFLs) often cost a bit more initially, they have the potential to significantly reduce your overall energy bill. Estimates show that a single CFL bulb can save $30 to $80 in electricity.

If a nonprofit truly hopes to reduce spending, perhaps the greatest portion of overhead costs go to labor. Payroll is often one of the largest monthly business expenses, and by sourcing a majority of your labor from volunteers, you can considerably scale back on funding and have more money left for the causes that matter.

Cutting Overhead Costs by Spending Smartly
If your nonprofit truly wishes to cut costs, you need to be spending each dollar more wisely. Spending can add up quickly, and for most nonprofit organizations, much of your monthly expenditures are actually superfluous. Here are a few tips to eliminate needless expenses.

  1. Find free goods. People are often more likely to donate goods than they are money. Always provide donors with an updated wish list of the items your nonprofit needs most, while forming connections with local thrift stores, retailers, and office spaces who may be willing to donate bulk goods.
  2. Find used goods. Thrift stores and classified listings are great ways to find unbeatable deals on lightly used goods and appliances.
  3. Compare pricing. Before investing in a product, compare pricing among a variety of retailers to ensure you’re getting the best deal. Remember, when buying in bulk, the more you purchase upfront, the lower the cost is per item.

While fundraising will always be important, it is considerably easier for nonprofits to save money than it is to raise it. It requires less time and effort, and it can help to fill the funding gaps when donations aren’t coming in as regularly. There are a lot of easy ways that nonprofits can scale back on overhead costs, without compromising the quality of service they provide to the public. Start saving money today by purchasing bulk office supplies and cleaning supplies at highly competitive prices.