What nonprofit wouldn’t like to save money? Benjamin Franklin wisely counseled, “A penny saved is a penny earned.” Like all great entrepreneurs, Franklin knew the value of a buck. For most nonprofits, a shoestring budget is part of the day-to-day reality. By cutting excessive costs, a penny-pinching strategy can free-up capital for mission initiatives and program growth. Save money for your charity with our bundle of small financial fixes to improve the bottom line.
Not all these ideas will suit every group. Take the ones that fit your particular set of circumstances and run with them. Even implementing just a few of these ideas will add up to extra cash for your group.
Manage your mail
- Consider the savings of a nonprofit bulk postage permit. Does your nonprofit send direct mail or newsletters? By making changes like adding the nine-digit zip code as well as bar codes, you can further lower postage costs.
- Let the U.S. Postal Service clean up your mailing list for free so you’ll be eligible for bar-code discounts. The service corrects addresses, flags incomplete addresses and adds ZIP+4 numbers.
- Collect more email addresses to send more emails and reduce postal cost.
- Take a tip from the Direct Marketing Association and print “Address Correction Requested” across the front of your mail. This should eliminate non-respondents and marginal prospects.
- Give local college students an opportunity to intern with your organization. This is a source of free or low-cost help for your nonprofit and provides invaluable experience for young people.
- Use independent contractors / freelancers. To avoid penalties, be sure the individual fits the definition provided by the IRS. Employers don’t pay or withhold taxes on payments to independent contractors. If you pay your contractor through a freelance service or electronically you may not even have to file a 1099.
- Track that petty cash with laser like focus. Those seemingly small amounts have a way of adding up!
- In some states, nonprofits can get a refund on sales tax although it’s not automatic. Check if your state is eligible, save all receipts and apply for your refunds where applicable.
- Nonprofits can opt out of the state unemployment tax system. This can save a 501(c) nonprofit organization a considerable amount of money although there are self-insurance risks. Check with your tax advisor.
Work the web
- Get your website address out there for all to see. Put your URL on your letterhead, business cards and in email signatures; wherever would-be visitors are likely to see it. Promotional items, donor appeals, press releases and thank you letters should display this bit of vital publicity data.
- Use free online resources for drafting your fundraising letters, planning the next appeal and creating graphics ,for your website and social media accounts.
- High-speed broadband opens up a whole world of money saving possibilities. If long distance calls and out-of-town meetings are your reality, consider the possibility of teleconferencing. Likewise, expensive long distance charges can be swapped out for internet-based calling services with free long distance calls.
- There are hundreds of free software products available online. Start by visiting Techsoup.org which has a continuous offering of free and discounted software for charitable groups. If you need software not available there, visit the company’s website to see if they offer free trial downloads or check out Download.com.
- Looking for inspiration for your next campaign? Check out the examples of great fundraising campaigns, materials and more at the Showcase of Fundraising Innovation and Inspiration SOFII.org.
- Find a low cost or free checking account. Ask for recommendations, or search the web. Call local banks to see if they offer discounted or free checking for nonprofit groups.
- Lower your costs for checks or get them for free. Consider ordering from a check printing company which is often less expensive than a bank. Ask your bank if they can offer them for free, at least the first box of check books. Set up online or auto bill-pay to avoid using a lot of checks in the first place.
- Build a relationship and buy locally from the businesses that support you. Local store managers have the control to donate items to nonprofit organizations, when asked. Be tactful, pick a time when business is slow and get the store manager’s name and business card so you can send a thank you note for his time and any donations.
- Don’t shy away from used office equipment. Buying used computer equipment, copiers and office furniture, can save you up to sixty percent over new. Be sure to buy from reputable suppliers and auctioneers.
- Ask your accountant, insurance agent or attorney how to reduce costs. Many professionals will offer to reduce billable hours, cut premiums, or avoid big retainers, or offer their services for free.
- Instead of paying a consultant to write press releases or newsletters, learn how to do it yourself (or have a staff member or volunteer member learn it) and save on future costs.
Save on everything you pay for
- Cut utility costs. Get an energy audit from your electricity provider for your building to determine where energy and money can be saved. Weigh the costs of improvements against the time it takes to pay for itself.
- Pick up goods yourself if you’re near your suppliers. This saves shipping cost and may even yield other discounts.
- Find out from suppliers if there is a discount for early payment. Otherwise paying bills as late as possible (without earning a penalty) can work to your benefit.
- Shop around for everything. Get at least three bids for all purchases. Competitive companies will often better a price in order to get your business.
- The ultimate saving tip for nonprofits might be to use a group purchasing organization (GPO). Using the shared buying capacity of its participating members, the GPO negotiates discounted pricing on products and services.
As Benjamin Franklin said, “Beware of little expenses. A small leak will sink a great ship.” Plug those unnecessary leaks and watch your spending drop. Has your organization tried to save money using any of these tactics?