Non-profit organizations rely on contributors and donors who trust their ability to manage the funds provided on their behalf and maximize their benefit. Some believe that non-profit institutions should spend about 23% of their budget on overhead costs, which include administration, staff, office space, non-profit programs, and equipment, while these institutions strive to cut these costs.

Here are 10 ways that can enable a nonprofit organization to reduce overhead costs:

  1. Adopt Cloud Computing at the Launch of the Organization:

Cloud computing is a revolution in the software industry, and adopting it helps save money and reduce overhead costs in the short term. In this context, non-profit organizations have access to a range of features, such as Google's nonprofit feature, which is a free program that contains many tools available for users to manage relationships with donors. Cloud computing is well-suited for small non-profit organizations that cannot bear the initial costs of data hosting on a website and contracting with an IT team. As the non-profit organization develops and grows, transitioning to self-management of data on the website becomes a better financial option.

  1. Bring in More Volunteers:

Non-profit organizations will continue to need to pay the salaries of their staff, but proper organization and leveraging volunteers can save a lot in the budget for overhead costs. In fact, volunteers should be recruited in two ways: First, by adopting marketing methods such as official advertising, social media, and email campaigns, offering incentives, and second, by treating current volunteers with care and attention, which will contribute to bringing in more volunteers willing to join the organization by sharing their experiences.

  1. Share Office Space with Other Non-profit Organizations with Similar Goals:

This step involves a non-profit organization hiring its staff in offices belonging to nearby organizations with the same goals and efforts without disrupting productivity. This partnership also helps reduce excessive costs and create the maximum possible positive impacts.

  1. Collaborate with Other Non-profit Organizations with Similar Missions:

This step involves non-profit organizations collaborating with other organizations with similar missions to establish joint programs, thereby sharing overhead costs. Through this partnership and synergy, the organization can save on overhead costs, fund various activities, and provide shared informational support.

  1. Avoid Sourcing Goods from a Single Supplier:

Purchasing from a single source means choosing one provider to buy the materials or products necessary for the non-profit organization. When it comes to acquiring various supplies, whether non-profit software, various materials, or office technologies, it is advisable for organizations to avoid relying on a single supplier to find the best deals. Purchasing from a single source can be costly for non-profit organizations and eliminates competition among various suppliers, reducing the incentives to provide higher-quality products at lower prices.

  1. Adopt Unconditional Purchasing:

Many non-profit organizations lack the financial resources needed to buy large warehouses to store all the supplies they need for various tasks. To compensate for this shortfall, instead of spending money on buying warehouses and additional storage space, non-profit organizations can reduce overhead expenses by organizing unconditional purchase agreements with their suppliers. This process involves making an agreement with the vendors to retain the purchased materials until requested by the organization.

  1. Regularly Assess Various Suppliers:

One of the advantages of avoiding sourcing supplies from a single provider is the ability to regularly assess suppliers and compare their prices and services with what is available in the market. An annual, semi-annual, or quarterly assessment of suppliers is essential for selecting the appropriate prices that align with the organization's budget, reducing overhead costs, and maintaining necessary efficiency.

  1. Outsource Printing Services:

It is well known among many non-profit organizations that various printing operations can be costly, which necessitates outsourcing the organization’s printing tasks, making it the best way to reduce excessive printing costs. When organizations outsource printing, they hire a third party responsible for printing all primary materials, which means avoiding further alternatives like ink cartridge replacements, fixing or replacing machines, or printing errors.

  1. Rely on Personal Devices:

The costs of desktop phone systems can be high, and currently, small non-profit organizations can do without office phone systems, especially since, as of 2013, 91% of adults own personal mobile phones. If desktop phones are unnecessary, adopting personal mobile phones is a better solution for reducing overhead costs.

  1. Look for Discounts in Delivery Services for Non-profits:

It is important for non-profit organizations to look for discounts in delivery services provided by various companies. For example, the United States Postal Service offers discounts for local American non-profits for shipping various types of goods, provided these organizations meet certain criteria; especially if they are involved in agricultural and educational areas, or are faith-based, scientific, or related to veterans, voter registration workers, and national political parties.

Source: Capterra

Author: Nick Morpus