Why You Should Run Your Nonprofit Like a Business

Nonprofits are very different from for-profit businesses because they are guided by their missions and causes instead of revenues and profits.

Where they converge, though, is in their need to create value and improve their communities: nonprofits through their causes, and businesses by fulfilling their corporate social responsibilities.

With this similarity in mind, there is a lot of wisdom and practices nonprofits can borrow from businesses so they can make a bigger impact and be more effective.

Here are a few things nonprofits can borrow from for-profit businesses and why they should operate as a business.

You Learn the Value of Investing in Your Team

Every business and organization, whether for profit or not, should invest in getting the best team possible. Just because a nonprofit does not operate with the sole aim of making money, does not mean it cannot afford to hire the best staff.

Apart from hiring, nonprofits should also offer competitive salaries and benefits so they can invest in better hires and talent. Providing a great company culture can also go a long way in helping your team do its best and enabling the nonprofit to reach its goals.

Before taking care of and changing the communities you wish to impact, you need to care for your organization and the teams therein. Ensuring your team feels happy and valued is an investment that will pay off in the future, especially considering the performance and productivity gains you can expect.

Although the goals a nonprofit and a for-profit business have are different, investing in their teams and employees is something the best business leaders do as it ensures the profitability and longevity of the business.

You, Will, Learn to Speak the Same Language

A reason to run a nonprofit like a business is so that you learn how to approach businesses. Many nonprofits mistakenly think businesses will give them endless amounts of money without asking for anything.

This is not true because businesses are in it to make money, and they cannot give it away without some leverage. If you approach a business only asking for money and not offering something in return, you risk losing out on an opportunity and a potential donor.

When you run a nonprofit like a business, you understand how to act, speak, and perform when talking to other business leaders. Additionally, you will approach this task with leadership and business mindset, fully knowing that getting donations from companies often requires that you give something back.

Because you are already thinking like a business leader, you will be in a much better position to identify the needs of another business so that you can detail what you will offer in your donation request letter. Will you provide mentions on your social media, tax advantages, or help the business increase brand recognition?

Knowing what you can provide a company in exchange for a donation is a crucial aspect of getting donations from companies. Others include knowing what companies to approach, ensuring a tailored donation request, and following up with the companies you have shortlisted and asked for a donation.

Givebutter provides more details on getting donations from companies in addition to the tools that make it easy to do so. All their tools for raising funds, running campaigns, tracking progress, and managing campaigns are free. They also provide success stories so you can see how other organizations reached their goals as well as experts to guide you through your campaign.

Make the Best Use of Technology

Businesses use technology all the time to improve their products and services, ensure better customer interactions, and a lot more. If your nonprofit is not taking advantage of the available technology, it is missing out. Nonprofits can look at how businesses use technology to help improve their operations.

For example, they can learn how businesses use customer relationship management tools to manage customer information — knowledge that can translate into helping nonprofits manage donor information.

They can also learn how to use social media to reach new donors, or how to use big data and analytics to target the right donors and solicit the right amounts.

After learning all this, nonprofits will be able to see the value of investing in technology and new ways of taking advantage of it.

See the Benefits of Investing in Marketing

All businesses invest in marketing, and every nonprofit should. Nonprofits can use marketing to reach new donors, tell their stories and increase awareness.

These align with how businesses use marketing.

Having a solid brand, a social media presence, an advertising budget, a website, and outreach programs are all great ways to support your mission.

By helping you reach new donors, marketing can ensure that your nonprofit always has the resources it needs.

Generating Revenue

Despite them taking no profits at the end of the financial year, nonprofits do generate revenue. They then use the profits generated to support their missions, causes, and activities.

Even when providing a free service to the community, that does not mean they cannot provide a paid one to corporations which can become an incredibly important revenue stream for nonprofits.

Businesses can sell to corporations and use the funds to give back to the community. This relationship can also grow further to the point where the two entities have a mutual relationship.

Nonprofits can use the same strategies and tactics businesses use to establish revenue streams and generate profits.

Check out our exclusive guide on managing business finance and cost reduction.

Learn to Treat Donors as Customers

Meeting donor expectations is crucial for nonprofits that want to continue donor relationships and raise funds. Donors expect that once you have identified a problem and have a solution you apply the solution to the problem, thereby meeting their expectations.

This is the same thing customers expect from businesses. Businesses understand the value of under-promising and over-delivering, and this is something nonprofits can learn.

There are obvious differences between nonprofits and for-profit businesses. That does not mean that nonprofits cannot learn from for-profit businesses to enhance their activities and reach their goals and objectives.

Additional Resource

Olectra Share Price 2022 – Present Price, Forecast, Statistics – Should You Invest In It In 2022?
Tata Steel Share Price 2022 – Present Price, Forecast, Statistics | Should You Invest In It In 2022?
Which Of The Following Is A Unique Feature Of Credit Unions