Do you ever spend any time asking “why”? If you have a small kid, you probably spend a lot of time answering “why” questions until you’re ready to pull your hair out. As nonprofits, we often ask “why” questions when it comes to an issue pertinent to our mission, but do we stop to ask it in relation to the other aspects of our business? This is a topic that came up recently with one of the nonprofits where I volunteer. We were considering some expenses and asking ourselves, “Why?”
Insurance is very important! You won’t miss it until something happens. Take time each year to review your policies and ask some why questions. Why do we have this policy? Why are we using this agent? What does this cover? Are we over or under-insured? What’s the deductible? Who is designated to deal with this policy should we need to invoke it? Do we have all our backup documentation needed if we need to use the policy such as inventories and receipts? Do we even need this policy?
Office space can be one of your largest pieces of overhead. Why do you have an office? Do you see clients there? Do you need to have meetings in the space? Do you need internet access or databases to be stored there? Could your organization utilize free meeting space at the local libraries or meet with clients there or at a local multi-use center? There are options for nonprofits to have a mailing address with low costs. Consider the many volunteer -run organizations where the address changes with leadership changeovers. Do make sure your resident agent contact information and address are up to date (Maryland Businesses can check here)! But otherwise, you don’t have to have office space unless your structure and mission and require it.
Utilities have the potential to eat a huge hole out of your budget, particularly phones and internet service. If you don’t have an office, you’re already experiencing savings on air conditioning and electricity, but you still need a way for people to contact you. Various companies offer remote website hosting and email service for very little each month. You can utilize internet-based phone services or alternatives such as Google Voice to ensure people reach you. If you do have office space, ask yourself if you really need three phone lines AND a fax machine (Hello Fax is a good alternative for those without fax machines). Can you participate in a discount program through a membership in a larger organization?
Staff is another area to carefully consider. How many nonprofits won’t hire anyone because they don’t believe they can afford the burden. How many keep staff on in positions that they can not really afford because they aren’t ready to change their structure? My mantra has always been, “you get what you pay for” and if you’re unhappy with the results from volunteers who manage crucial aspects of your business, perhaps its time to hire someone.
As with office space, think flexibly. You don’t have to hire full-time permanent staff. You can offer part-time positions, you could contract out certain functions such as a event planning. You can also outsource things such as membership and database management. If you just need someone to respond to phone calls and emails you could consider a virtual assistant! There are many ways to staff positions that support volunteers and help you meet your mission that are cost-effective.
It is easy to fall into the budget trap of assuming all your expenses are necessary. But, when things get tight, can you cover them all? Don’t just blindly follow conventional wisdom about what you have to have to keep your nonprofit running without truly asking, “why” everyone says this should be a certain way.
Have you been able to use “Why” questions to improve your program delivery or keep your overhead low? What expenses will you question?