HR Workforce Solutions
By Nonprofits, For Nonprofits
Nonprofits are driven by a mission to address societal needs and provide public benefits. This distinguishes them from profit-driven enterprises. While their primary focus isn’t financial gain, nonprofits must still navigate the economic landscape to sustain their operations and fulfill their missions effectively.
So, how do nonprofits make money? What strategies do they employ to fund their vital initiatives and programs?
Let’s dive into the topic of how nonprofits make money to ensure they can continue to make a positive impact on the communities they serve.
How to Make Money as a Nonprofit
In the realm of nonprofit management, the pursuit of financial sustainability is a perpetual endeavor. The following multifaceted strategies and avenues help nonprofits secure the resources necessary to advance their missions effectively. Here’s a look into how to make money as a nonprofit.
Traditional Donations
At the core of nonprofit funding lies the generosity of individuals and corporations. Their contributions fuel the organization’s mission-driven initiatives. These donations, whether large or small, provide the essential lifeline for sustaining operations, funding programs, and driving innovation. They empower nonprofits to make meaningful strides toward societal change.
Cultivating strong donor relationships, implementing effective fundraising campaigns, and showcasing transparent stewardship of funds are key to maximizing the impact of traditional donations. They foster long-term support for the organization’s endeavors. Additionally, demonstrating the tangible outcomes and transformative impact of donor contributions strengthens trust and loyalty. This inspires continued engagement and philanthropic support from both individuals and corporate partners.
Grants
Beyond individual donors, nonprofits often rely on foundation grants and government funding to support their initiatives. These grants offer significant financial backing, enabling nonprofits to undertake ambitious projects, expand their reach and address pressing societal issues. However, securing grants requires meticulous research, strategic alignment with funders’ priorities and robust grant management practices. All of this effort is to ensure compliance, accountability, and sustainable impact. Nonprofits must demonstrate their capacity to deliver measurable outcomes and effectively steward grant funds to maintain credibility and foster future funding opportunities.
Fundraising Events
From galas to auctions and charity walks, fundraising events serve as not only revenue-generating opportunities but are also powerful tools for community engagement and awareness-building. These events create platforms for supporters to rally around the nonprofit’s mission. They forge lasting connections and inspire ongoing support. Nonprofits can amplify their fundraising efforts and broaden their impact by leveraging creative event planning, effective marketing strategies, and volunteer mobilization.
Earned Income
Nonprofits are increasingly exploring alternative revenue streams beyond traditional fundraising methods. Social enterprises, fee-for-service programs, and merchandise sales offer avenues for generating income while advancing the organization’s mission. Whether through the sale of products, services, or experiences, nonprofits can diversify their revenue sources. This revenue helps them achieve greater financial resilience in an ever-changing landscape.
Corporate Sponsorships and Partnerships
Collaborating with businesses presents nonprofits with a myriad of opportunities beyond financial support. Corporate sponsorships and partnerships offer a gateway to expanded visibility and promotional exposure. They enable nonprofits to reach broader audiences and raise awareness for their causes. These collaborations also foster employee engagement. This encourages corporate staff to volunteer, fundraise, or participate in community service initiatives alongside nonprofit personnel.
In addition to financial contributions, businesses often bring valuable resources to the table. Their expertise often includes in-kind donations to access specialized expertise and networks. Through strategic partnerships, nonprofits can leverage these resources to enhance their capacity, innovate their programs, and extend their reach.
Investments
For financially stable nonprofits with a substantial financial base, investments offer the potential for additional income generation and long-term sustainability. Through investments, nonprofits can diversify their revenue streams and build financial reserves to weather economic uncertainties and fund future initiatives. This approach strengthens the organization’s financial footing and enhances its ability to adapt to changing market conditions. The nonprofit is able to seize new opportunities for growth and impact.
Reducing Costs for Nonprofits
The question, “How do nonprofits make money?” is a viable one, but income is not the only concern for these charitable organizations. While revenue generation serves as the lifeblood of nonprofits, prudent management of expenses is equally crucial for long-term sustainability.
By implementing strategies to enhance operational efficiency, nonprofits can streamline processes, reduce waste, and optimize resource utilization. The following are a few strategies nonprofit organizations use to reduce costs:
These concerted efforts not only optimize financial resources but also enhance organizational resilience and agility. Understanding how to make money as a nonprofit involves a combination of revenue generation and cost reduction.
Are You Still Wondering, “How Do Nonprofits Make Money?”
So, how do nonprofits make money? In the dynamic landscape of nonprofit management, the pursuit of both revenue-generating and cost-saving opportunities is critical for organizational success and sustainability. Nonprofits can position themselves for long-term growth and impact by embracing innovative strategies, fostering strategic partnerships, and prioritizing financial stewardship.
We urge nonprofit leaders and stakeholders to harness the insights and recommendations outlined in this guide. You’ll quickly recognize the transformative potential your organization holds for advancing its mission and creating meaningful change. At UST, we empower nonprofits to thrive, inspire, and continue their vital work in building a brighter future for all. For additional support and resources, explore our UST solutions. Our experts will guide you toward operating a more sustainable and impactful nonprofit organization.
Nonprofit organizations form the backbone of societal change. You work tirelessly to advance your causes despite tight budget constraints. It’s crucial for your organization to implement cost-saving strategies that align with your goals and ethics. Through astute financial planning and strategic decision-making, your nonprofit can amplify its impact and extend the reach of its funding. Leveraging historical stability and pooled knowledge, such as entities like UST, your nonprofit can fortify its financial foundation amidst the ever-evolving economic landscape.
Below, we present ten actionable cost-saving strategies designed to support nonprofit leaders in their ongoing efforts to manage budgets more effectively and channel saved resources back into their mission-critical activities.
1. Streamline Operations Through Technology
In an era where digital transformation is vital, investing in technology can lead to considerable long-term savings. Automating mundane tasks reduces labor costs and increases efficiency, allowing staff to focus on more essential, mission-focused work.
2. Harness the Power of Volunteers
Volunteers are an invaluable asset to any organization. They not only bring passion and dedication, but also help save on personnel costs. However, manage volunteers responsibly to ensure their experiences are rewarding and further your cause.
3. Go Green to Save Green
Implementing eco-friendly practices goes beyond the moral benefits; it is also cost-effective. Cutting down on paper use, optimizing energy consumption, and recycling can lead to substantial savings.
4. Opt for Second-Hand Equipment
Before rushing to buy new equipment, consider purchasing quality second-hand items. Not only is this more economical and sustainable, but often you can find barely used resources at a fraction of the cost.
5. Leverage Free or Discounted Services for Nonprofits
Many companies offer discounted or even free services to nonprofits, including software subscriptions, marketing tools, and professional development resources. Take advantage of these opportunities.
6. Invest in Staff Development
While this may seem counterintuitive as a cost-saving measure, training your staff can actually reduce costs by improving efficiency and reducing turnover – both of which are costly in the long term.
7. Collaborate with Other Organizations
Forming alliances with similar nonprofits can lead to sharing of resources, joint grant applications, and mutual support, thereby reducing costs associated with events and projects.
8. Conduct Regular Financial Reviews
Assessing your financial practices regularly can help identify inefficiencies and areas for cost reduction. Keep abreast of financial management best practices and remain compliant with regulations.
9. Optimize Your Fundraising Practices
Ensure your fundraising efforts are as effective as possible by cutting unnecessary costs and using data-driven strategies. Tailor your campaigns to target the most engaged sectors of your donor base.
10. Reevaluate Your Space Needs
If remote work is sustainable, consider downsizing office space or renegotiating lease terms. This can be one of the most immediate ways to reduce fixed costs while maintaining productivity.
Taking these steps can contribute significantly to reducing expenses, but achieving optimum efficiency often requires tailored solutions. That’s where we can step in to assist you further. UST is well-versed in the unique challenges faced by nonprofit organizations and offers expert advice to help you save money, mitigate risk, and increase efficiency.
Don’t leave potential savings on the table. For a more detailed exploration of how these strategies can benefit your organization, and to discover additional, customized solutions for cost-savings, complete ourfree savings analysis. Fill out our free savings analysis form today and start charting a course towards financial sustainability for your nonprofit.
At UST, we’re committed to helping you make every dollar count, underscore your mission, and amplify the change you envision.
Question: What are the penalties and costs for misclassifying employees?
Answer: The answer will depend on a number of factors, such as how many employees are misclassified, how much extra money they would have been paid if properly classified, and whether or not lawyers or regulatory agencies get involved.
Generally, if an employee goes to the federal Department of Labor (DOL) and claims that they’ve been misclassified, the DOL will investigate. If the DOL determines that an employee—or entire group of employees—should have been paid overtime but wasn’t, the employee will be owed up to two years’ worth of unpaid wages (or up to three if the misclassification was “willful”). The organization may also owe the employee or employees liquidated damages equal to the amount of money owed. So, if an employee should have been paid $2,000 in overtime, the organization may owe them $4,000. The organization would also owe the government taxes on those wages, as well as interest on the taxes.
Most states also have their own minimum wage and overtime laws, and often an organization can be held liable under both federal and state law, meaning the employee would be owed additional damages for violations of state wage law. And if you are in a state with late payment penalties, the organization could owe additional damages for not having paid all wages by the time they were due. There’s also a very good chance that the organization will be held liable for attorney’s fees—both the organization’s and the employee’s.
On top of the costs mentioned above, there are potential federal civil penalties of $2,074 per violation (generally one penalty per misclassified employee), state penalties (which will vary), and in some cases the potential for jail time. Finally, statutory interest may immediately begin to accrue on the amount owed.
This Q&A does not constitute legal advice and does not address state or local law.
This Q&A was provided by Mineral, powering the UST HR Workplace. Have HR questions? Sign your nonprofit up for a FREE 60-day trial here. As a UST member, simply log into your Mineral portal to access live HR certified consultants, 300+ on-demand training courses, an extensive compliance library, and more.
Podcast Description: This podcast discusses how most people can effectively talk about their company, but need to significantly improve upon how they talk about themselves—a skill that is crucial to advancing to and maintaining executive level status. The Founder and President of Association Strategies, Inc., Pamela offers three decades of experience in executive search, transition management and organization development.
Association Strategies, Inc. ASI is a premier executive search and transition management firm dedicated to finding and placing top notch talent in trade associations, professional societies, and nonprofit organizations worldwide. To learn more about Association Strategies, Inc., visit their website at http://www.assnstrategies.com/.
Listen to Podcast: http://throughthenoise.us/mediacast/250-association-strategies-pamela-kaul/
To stay up-to-date on the latest best practice tips and cost-saving ideas just for nonprofits, sign up for UST’s monthly eNews today!
Have you ever wondered about the gap between what you pay in taxes and what your former employees actually collect in unemployment benefits? Last year, after evaluating more than 185 eligible nonprofit organizations, UST found they were losing a combined $4,781,957.
By Federal law, 501c3 nonprofits do not have to pay state unemployment insurance taxes.
UST helps organizations like yours to keep more money in the nonprofit community without compromising the benefits paid out to deserving former employees. More than 2,200 organizations are already benefiting from a safe, cost-effective way to exercise their unemployment tax exemption and lower the hidden costs of HR, like hours spent filing paperwork.
If you’re a tax-rated nonprofit employer with 10+ employees or already direct reimbursing, please submit the online Unemployment Cost Analysis form and UST will readily determine whether you can save valuable time and money with their program. If you are currently overpaying, a UST Cost Advisor will provide you a custom two-year savings projection for free.
It only takes about 15 minutes to fill out the form—and UST participants often see savings of up to 60%—so we really encourage you to do it today.
When you join UST, you’ll be introduced to your dedicated Unemployment Claims Advisor, and receive access to a live HR hotline and nearly 300 employee training courses within 48 hours. To expedite your free Cost Analysis, go to www.ChooseUST.org/savings-evaluation and enter Priority Code: 2017BLOG.
Presented by ThinkHR, this on-demand webinar explores President Trump’s first 100 days in office. The presentation will address issues and questions about rescinded Executive Orders, regulatory enforcement agenda changes and legislative moves that could impact your nonprofit’s business operations.
Discover what you need to know and should be doing relating to:
Watch the webinar recording today: http://links.thinkhr.com/Q0FW0oT0Kj1Rn0Wf900v9S0
Want access to more HR-certified webinar opportunities and a live HR hotline? Visit www.chooseust.org/thinkhr/ to sign up for a FREE 30-day trial of the UST HR Workplace, powered by ThinkHR.
By exercising their exclusive nonprofit tax alternative, as allowed by Federal law, 501c3 organizations participating with UST have the ability to pay only for their own unemployment claims, which can save them thousands annually. Because they are no longer subsidizing for-profit companies in the state tax system, and are receiving expert claims guidance, UST members can efficiently manage their unemployment claims while mitigating liability.
“Within the last three years, UST has identified over $16 million in potential unemployment claims savings for hundreds of nonprofits across the United States,” said Donna Groh, Executive Director of UST. “It’s incredibly rewarding to know that the UST program continues to provide financial relief to such hard-working nonprofits and the communities they serve.”
In addition to offering claims support, UST also help nonprofits cut costs further by helping organization streamline their workforce and avoid costly legal fees with robust HR resources built into its program. These expert tools, including the live HR hotline, online job description builder and award-winning outplacement services, provide UST participants the extra bandwidth they need to strengthen their missions.
As the largest, lowest-cost trust nationwide, UST helps 501c3 organizations save valuable time and money through a host of workforce management solutions that include – unemployment claims management, cash flow protection, certified HR assistance, outplacement services and more. With the ability to find hidden savings for both tax-rated and direct reimbursing employers, UST encourages nonprofits with 10 or more employees to benchmark their costs.
Many managers lack fundamental training in managing people. More importantly, they lack the values, sensitivity, and awareness needed to interact effectively with their staff which affects the company as a whole and causes the bottom line to suffer.
Micromanagement – Bosses who are always under foot and constantly requiring updates are exasperating to everyone. All managers should start out from a position of trust with their employees. Micromanaging shows a lack of trust and makes an employee feel like they can’t be counted on to do things effectively.
Failing to get to Know Employees as People – Developing a relationship with employees is a key factor in managing. Managers need to know how to balance being professional with being human. Because we spend more time at work than we do at home most days, it’s important that employees feel like they belong. Celebrating successes, both professional and person, and empathizing during hard times can go a long way.
Workload Burnout – If you want push people out the door, nothing does it better than overworking your staff and pushing the limits of excessive production. Managers tend to push their best and most talented to do more but overworking your employees is counterproductive and risky if you don’t compensate with some sort of recognition such as raises, promotions or title-changes.
Failure to Communicate – The best communication is transparent communication. Sharing as much information as possible helps to make employees feel engaged and empowered. It also opens the door for feedback, ideas and suggestions which every company should encourage.
Don’t Recognize Good Work – Everyone likes a pat on the back every now and then and it’s the managers’ responsibility to reward a job well done. It can be as simple as verbal recognition, a small token of acknowledgement such as a gift card for coffee or as grand as a raise or promotion.
Failure to Develop Skills – Talented employees are always looking to learn something new and missing the mark on this one can cause your best people to grow bored and complacent. If you take away their ability to improve, it not only limits them, it limits you too.
If you want your best people to stay, you need to think carefully not just about how you develop them but about how you treat them. Cultivating happiness and good will through methodical efforts will help to avoid any unnecessary losses.
Presented by The Council on Accreditation COA, a nonprofit accreditor of human services organizations, this on-demand training is designed for people with little or no knowledge about COA.
The webinar will provide participants with a better understanding of:
Watch the webinar recording today: bit.ly/2kDwGhh
This webinar series is part of UST’s efforts to educate the nonprofit sector. For more learning opportunities, tips and legal updates just for nonprofits, sign up for ourmonthly e-News today!
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Your use of this site and the provision of basic information constitute your consent for UST to use the information supplied.
UST may collect generic information about overall website traffic, and use other analytical information and tools to help us improve our website and provide the best possible information and service. As you browse UST’s website, cookies may also be placed on your computer so that we can better understand what information our visitors are most interested in, and to help direct you to other relevant information. These cookies do not collect personal information such as your name, email, postal address or phone number. To opt out of some of these cookies, click here. If you are a Twitter user, and prefer not to have Twitter ad content tailored to you, learn more here.
Further, our website may contain links to other sites. Anytime you connect to another website, their respective privacy policy will apply and UST is not responsible for the privacy practices of others.
This Privacy Policy and the Terms of Use for our site is subject to change.
UST maintains a secure site. This means that information we obtain from you in the process of enrolling is protected and cannot be viewed by others. Information about your agency is provided to our various service providers once you enroll in UST for the purpose of providing you with the best possible service. Your information will never be sold or rented to other entities that are not affiliated with UST. Agencies that are actively enrolled in UST are listed for review by other agencies, UST’s sponsors and potential participants, but no information specific to your agency can be reviewed by anyone not affiliated with UST and not otherwise engaged in providing services to you except as required by law or valid legal process.
Your use of this site and the provision of basic information constitute your consent for UST to use the information supplied.
UST may collect generic information about overall website traffic, and use other analytical information and tools to help us improve our website and provide the best possible information and service. As you browse UST’s website, cookies may also be placed on your computer so that we can better understand what information our visitors are most interested in, and to help direct you to other relevant information. These cookies do not collect personal information such as your name, email, postal address or phone number. To opt out of some of these cookies, click here. If you are a Twitter user, and prefer not to have Twitter ad content tailored to you, learn more here.
Further, our website may contain links to other sites. Anytime you connect to another website, their respective privacy policy will apply and UST is not responsible for the privacy practices of others.
This Privacy Policy and the Terms of Use for our site is subject to change.
The UST HR Workplace powered by ThinkHR empowers nonprofit HR professionals with the guidance they need to be more effective and efficient in their jobs. By providing expert HR advice, thousands of HR templates, hundreds of training courses and an award-winning online library for all workplace concerns, the UST HR Workplace gives nonprofits the knowledge they need to avoid costly risks and liability issues.
“Maintaining risks in the workplace is crucial to any organization but specifically for the nonprofit sector where one unexpected risk can put the organization in a situation they’re unprepared for,” said Donna Groh, Executive Director of UST, “ThinkHR helps nonprofit HR professionals avoid costly litigation with the tools available to them through use of ThinkHR Live, Comply and Learn.”
Staying on top of the latest HR laws and educating employees on organizational policies can help mitigate volatile unemployment claims and reduce costs long-term. Last year alone, UST members took nearly 5,000 online training courses and submitted close to 1,500 HR questions. The most popular resources utilized included Workplace Safety and Harassment Prevention training, Compliance and compensation inquiries, the Employee Handbook Builder and downloadable HR forms.
The UST HR Workplace has been a go-to resource for UST’s participating nonprofit employers since its launch in 2014 and is a priceless support system that helps to save time and money – offered at no additional cost to UST members.
Nonprofits can get a free 30-day trial of the UST HR Workplace powered by ThinkHR by visiting http://www.chooseust.org/thinkhr/.
About UST http://www.chooseust.org/thinkhr/ Founded in 1983, the Unemployment Services Trust UST provides 501c3s with a cost-effective alternative to paying state unemployment taxes. UST participants save millions annually through claims management, hearing representation, claim audits, outplacement services and HR support. Join more than 2,200 nonprofits nationwide and request an Unemployment Cost Analysis at www.ChooseUST.org.