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Navigating Inflation and Controlling Costs in Nonprofits

Navigating Inflation and Controlling Costs in Nonprofits

Rising inflation has an impact on nearly every aspect of our lives, and it is no different for the nonprofit world. For nonprofits, every dollar counts, and managing an ever-tightening budget amidst inflationary pressures can be daunting.

With increasing costs and unpredictable economic conditions, nonprofit leaders need to have sound strategies in place. Strategic planning and a touch of creativity can help nonprofits effectively navigate these challenges.

Take Stock of Office Space

Physical office space is a large line item in any budget. Consider ways to cut down on this cost by being creative with your staff.

  • Can some or all staff members work remotely?
  • Is it possible to lease less space in your current building, or find a smaller, more cost-effective building?

Building owners value long-term, stable tenants, and may be willing to negotiate rent reductions or other financial arrangements to entice your organization to stay.

If moving isn't an option, consider subletting unused space or sharing facilities with other nonprofits to defray costs.

Consider Salary and Benefits Adjustments

Staffing costs often account for a significant portion of a nonprofit's budget. While it's important to offer competitive salaries, there are other cost-effective benefits that can attract and retain staff members.

Carefully review all positions within the nonprofit – it may be that you can convert some full-time positions to part-time roles, which will save in salary and benefit costs. Sometimes, non-monetary benefits like extended vacation, remote work, or training opportunities can be as appealing as salary hikes, without the inflationary pressure.

Take a look at your volunteer programs. While a volunteer cannot replace a skilled staff member, they can support various operations, freeing up time for staff to focus on more complex tasks.

It is also wise to consider switching insurance providers. We all know healthcare gets more expensive each year, and shopping around will allow you to make sure you’re getting the best price with your current provider. If not, switching can be a way to get back some cash.

Strategic Planning

It may be time to take a hard look at what your organization is currently doing, and what its needs are for the future. Mapping out the future plans of your organization will help you see where budget shortfalls may occur.

Perhaps there is an area that uses a lot of resources without much return on investment. Using a critical eye in future planning can help you eliminate unnecessary expenses.

Get Creative with Fundraising

Look beyond your typical donors and sponsorships when fundraising. While raising the price of standard event tickets is one way to keep up with inflation pressures, consider what you can do to enhance an event experience to get more donations.

For example, invite a local celebrity to attend, and charge attendees for photos or autographs. Think about your core audience and their unique interests. If your area is a big foodie scene, a unique event could be a cooking demonstration with local chefs. Collaborating with other nonprofits for a dual eventcan be an easy win, allowing both organizations to split the costs and tap into a broader donor base.

If your organization isn’t already doing so, seek out other revenue sources such as grants and partnerships to complement traditional fundraising. Digital fundraising can also be an effective way to reach a wider audience. Crowdfunding and online platforms make it easy for anyone to donate at any time.

Inflation may be a formidable challenge, but with strategic planning, creativity, and adaptability, nonprofits can not only survive but thrive. Contact SVA professionals to learn how we can help your nonprofit organization.

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Biz Tip Topic Expert: Kirsten Houghton, CPA, MBA

Kirsten Houghton, CPA, MBA

Kirsten is a Principal with SVA Certified Public Accountants and her expertise includes the nonprofit and real estate industries. In addition to providing audit, accounting, and tax services, Kirsten also provides review, compilation, and management advisory services.

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