How to Run Your Nonprofit Like a Business
Nonprofits play an absolutely essential role in communities all over the world, by providing services that create an impact for all walks of life. And running a nonprofit, well, it’s no walk in the park.
So, how do you run your nonprofit? That question might sound strange, but it’s one of the more pressing questions we’ve received at Firespring over the past two years.
When Firespring started running our free and virtual strategy sessions at the beginning of the Covid-19 Pandemic, we met with over 100 nonprofits from across the globe. One of the most frequent conversations our team had during this time was the different ways nonprofits run their organizations.
Some run their nonprofit like a well-oiled machine, operating as a modern-day business. No matter what type of organization you have, if you want to create lasting impact, nonprofits must invest in themselves, just like businesses do.
This means, as a nonprofit, you need to invest in your team, your structure, your marketing, your tech stack and your long-term vision.
Here are three ways to run your nonprofit like a business.
1. Treat your donors as customers or investors.
When any individual or organization decides to donate their time or their money to your cause, they are actually investing in you, in your solution and in your community. Looking at these donors as investors, who allow us to create further impact, is a simple trick to start operating like a business.
Businesses can’t operate without customers or investors, and neither can nonprofits. One of the ways that nonprofits utilize this framework is by identifying as a “For-Impact” organization. Ultimately, that’s why your nonprofit exists: to create impact.
Chris Megison, the founder and CEO of Solutions for Change, runs and operates his organization with the for-impact mindset in place.
“We are the only sector (nonprofit) that identifies ourselves using a negative descriptor (non!). I get that it’s an IRS term but this should not be how we identify ourselves. Instead we should use For Impact because that is why all of us (should) exist. Be For Impact!”
2. Diversify your revenue streams instead of relying on donations or grants.
How many different revenue streams do you have as an organization? Is it just donations? Donations and grants? Or do you have an e-commerce storefront where advocates can purchase branded products such as hats, shirts, stickers and more? Do you have a monthly subscription for people in your community to utilize for recurring revenue?
This can all seem a tad overwhelming, because after all, the majority of nonprofits operate on donations and grants. But, there are a multitude of ways to increase your revenue streams. And the best part: It’s not that difficult.
You can add a planned giving program to your fundraising outreach to increase charitable bequests. You can increase brand affinity and awareness by making t-shirts available for purchase.
The options are endless, but the need is clear. Diversifying and increasing your revenue streams will bring in more revenue and create more impact.
3. Build a long-term vision that allows your organization to scale and grow over the next decade with action steps on how to get there.
Most organizations are working year-to-year or even project-to-project, but a long-lasting impact takes time, strategy and a foundation for growth. This doesn’t have to be done overnight, but it’s pertinent you have a strategic roadmap for where your team is headed for the next decade.
Without this roadmap or framework for growth, it will prove difficult to scale and enhance your impact over time. This effort can seem insurmountable or intimidating, but if you break it down into areas of growth, impact and need, it will become much simpler.
Some questions to get you on your way:
- What will your team need in terms of talent/people in order to increase your reach?
- Where do we see our impact growing from here? Is it into different communities or areas of interest?
- What will be the most important aspect of the foundation that we know we need? Is it funds? people? time? technology?
These are the questions that will get you on your way. All you have to do is start to look at your nonprofit like a business, like an entity that needs revenue in order to create more impact. And if you start to view your individual donors as investors in your community, you’re going to create a much bigger impact in the long run. So your challenge is to start looking at your nonprofit through a business lens.