Sage: 3 tips to help your nonprofit save money and do more (with less)

The pandemic has spared no sector, including non-profit organizations (NPOs).

From multiple lockdowns to recurring restrictions, the road has been rocky for organizations providing essential services to millions of people across the UK.

The not-for-profit sector lost £12.4bn for the year as a direct result of the pandemic.

With the abrupt halt to traditional fundraising activities, even the most established and financially secure charities have had to dip deep into their reserves or lay off staff just to stay afloat.

Unemployment, financial instability, threats of eviction, food poverty, domestic violence. These are just a few of the social issues intensified by the coronavirus and affecting mental health.

More people than ever are turning to nonprofits for crucial, sometimes life-saving support.

To continue to provide services to those who need them most, NPOs must make every pound and penny count. And that means finding new ways to work smarter and making sure resources go where they need to go.

But how can you balance this increased demand with such a significant drop in funding?

While there’s no magic cure for this kind of financial frustration, there are things you can do to make the most of the budget you have and save another valuable resource – time – while you are there.

In this article, we highlight three things you can try. Here’s what we cover:

1. Automate your administration

2. Revolutionize your reporting

3. Don’t be afraid of change

1. Automate your administration

When it comes to improving financial literacy, the biggest barrier NPOs see – smaller organizations in particular – is lack of capacity.

There simply isn’t enough time or resources to up the ante on your team’s financial management.

This is where automation comes in.

By using the latest accounting software, you can automate many of your most time-consuming financial management processes, freeing up resources and eliminating the most tedious tasks from skilled employees, which they will thank you for.

Automating your most repetitive tasks as part of a larger digital transformation plan also allows you to spend more time planning budgets and working on your organization’s campaigns.

Above all, it gives your finance function the ability it needs to adopt more streamlined processes, provide more insightful reporting, and hone its skills.

So while this may seem like a small change at first glance, the impact can be huge.

Refocusing your time could transform the way you work, from fundraising and service delivery to all things back office.

2. Revolutionize your reporting

Impact reporting is a major issue for the nonprofit sector.

If you can’t account for your financial performance and overall goals in your reports, you can’t have a clear view of what you’re spending or how you’re spending it.

The result?

A crisis of accountability and a lack of transparency that could put you at a disadvantage when it comes to applying for funding.

It could also put a damper on the work if you’re trying to build a sustainable future for your nonprofit on biased reports.

With the right software on your side, you’ll not only know how much money you need, you’ll have a clear view of what’s wasted and where.

It lets you set (and stick to) a realistic budget that actually works for your organization.

The right software will also give you insight into which campaigns work best pound for pound and which aren’t worth the time or money. This allows you to stop spending money on these areas and reinvest that money in other, more impactful campaigns.

Remember, if you can’t measure it, you can’t manage it.

Better and more detailed accounting means more financial data. More data can lead to better decision-making and better planning, which creates sustainable growth for your organization.

A big part of that sustainability involves doing more than just looking at what you can spend this month or this year.

It’s about having the information you need to plan for contingencies and build a reserve of funds.

You never know when you might need to pivot your organization later, as we’ve seen throughout the pandemic.

3. Don’t be afraid of change

One of the most difficult obstacles to overcome in any organization is the fear of change.

With limited funding available, NPOs tend to be more risk-aware than for-profits, but it’s worth remembering that digital transformation isn’t the radical business it once was. It has become the norm.

Think of it this way.

The digitization of financial management aligns with the guiding principles of good charitable leadership, in particular the commitment to deliver quality services exactly where and when people need them.

This means reducing waste, minimizing costs and making the most of your time and money.

Having a more sustainable financial model and software to back it up won’t solve all the challenges the world throws at you.

But it will allow you to navigate these choppy waters and come out on the other side stronger, ready to serve the communities in which you operate better than ever.

Organizational Financial Literacy Center

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