How to Run a Nonprofit Like a Business

Understanding how to run a nonprofit like a business, could be essential for a young nonprofit to succeed. So, where should you start? Organizations, whether for-profit or nonprofit, need to identify the issues they want their organization to address. Generally, its purpose is usually laid out in the form of a mission statement. Once you have a mission statement, your core is to achieve these stated goals. Similar to managing a business, to create a significant impact nonprofits must ‘manage their investment’ as directed to carry out their mission.

With the goal of creating value in mind, nonprofits must act strategically in order to make the most significant impact possible. Whether you’re thinking of starting or are already have a nonprofit, there are six positive features typical to a for-profit business, that your nonprofit organization can adopt!

1. Create Value for Patrons

Whether for the community as a whole or for a group of individuals within the community, nonprofits are founded to provide solutions. However, you need to effectively operate a nonprofit like a business if you want to maximize its ‘Value.’ As defined in the world of business, creating ‘Value’ (with profit as the goal) usually comes in the form of a product or service for customers. However, profit should not be thought of only in monetary terms.

For example, determining a nonprofit’s profit is often done by calculating its social impact, rather than by counting its profit only in terms of dollars and cents. ‘Value’ leading to a profit can also be found in the form of programs or services organized and/or carried out by a nonprofit, such as hosting a benefit to help feed food-deprived children, providing education (courses) for refugees or eco-friendly cleanup efforts to help preserve the environment. But remember: when you run a nonprofit like a business, you must also deliver on your promises, so don’t bite off more than you can chew. In short, identifying a problem and providing a sustainable solution is what creates lasting ‘Value’ from which the community will profit.

2. Cultivate Relationships

When you run your nonprofit like a business, you must protect your reputation. A nonprofit depends upon (having) a reputation beyond reproach to effectively grow and become an integral part of the community. For example, as a nonprofit, your goal is to improve the lives of the people in your community. However, you have to realize that you can’t always help everyone you come in contact with.

For those you’re unable to serve, it’s important for you to still seek to offer helpful solutions. Keep a Rolodex of organizations equipped for handling requests that are not in line with your mission. Offer impactful referrals to individuals who need help outside of your scope. Protecting your nonprofit’s reputation enables your team to cultivate and strengthen community connections. Keep in mind, a nonprofit will often need a letter of support to win a grant. To receive a letter of support, you need to protect your reputation by implementing best practices in its operation. A well-written letter of support can be the difference in determining whether or not you win a grant.

3. Nurture Your Team

Maintaining a high-quality workplace culture is an important key to a nonprofit’s growth. Offering benefits and competitive (employee) salaries is crucial to a nonprofit’s impact on the community. Your team is one of your most valuable assets. A strong staff, together with a committed group of volunteers, is essential in helping your organization make a difference day after day.

The actual Value of a volunteer’s time can be calculated, not to mention in addition to the impact provided by your employees. Invest in your staff! If you run your nonprofit like a business, you will naturally help your team reach personal goals (through professional training and development) to enhance the operation of your organization. Bring the best talent possible onto your team and let them shine! Your team members, whether as paid employees or as volunteers, need to feel they are valued. Nurture your team! When an individual feels valued, they are more likely to make a long-term ‘investment’ in your nonprofit.

4. Maintain A Marketing Plan

If you want to succeed in running your nonprofit like a business, you must also invest in marketing. Create a brand, develop an advertising plan, build a social media presence, craft a well-designed website, and build your network. Having a well-designed brand is crucial to your success. See what works for you; always seek ways of adapting your marketing to strengthen your impact. There are many cost-effective ways to market your nonprofit and improve your nonprofit’s brand. However, working to maintain the focus of your marketing plan, even with small steps, helps to ensure that your nonprofit continues to grow. Consistency is key! Set realistic expectations, aim to achieve your goal, and systematically reevaluate your marketing strategies as often as possible.

5. Donors Are Customers

A donor making an investment in a nonprofit through their donation is intending it to be for a cause they believe in. Donors expect to see the fruits of their contribution(s) be part of the solution. You must deliver on your promise, just like you would for a for-profit customer. Manage expectations, and deliver above and beyond what your donors expect. Make your donors feel like they are an integral part of the organization.

For example, give frequent updates on the good things your organization is doing. Of course, the end goal is to increase donations. Back the commitment made by your nonprofit to make an impact, both in terms of strategic planning, operations and marketing. Unfortunately, many nonprofits are not ready for this level of commitment. If you run your nonprofit like a business, you will need to be mindful of these aspects of a successful business to create policies to ensure your donors are happy with their participation in your nonprofit.

6. Build a Funding Pipeline

While the main focus of a nonprofit is not to make a profit, funding for its operations is still essential. In order for your nonprofit to accomplish its goals, you must have the resources necessary to (adequately) fund your projects. While there are many ways to generate funding, like charity events and fundraisers, you must still build in the costs involved in researching and applying for grants.

An easy way to plan out your grant applications is by using the GrantWatch Personalized Grants Calendar. The Grants Calendar enables users to link and schedule grants for timely application submissions.

Do you have two hours a week to research and apply for grants or will you schedule your time to allow two hours a day for grant submissions? The key is to constantly search for grants and frequently apply for the grants you are eligible for. Design a grant cycle that works for you!

There are grants available currently to nonprofits and for-profit organizations for programs that benefit local communities. Funding is to support general organizational expenses and programming as well as to provide assistance for social startups in the areas of education, preservation, and wellness.

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