How Can Nonprofits Reduce their Overhead Expenses?

Nonprofit organizations want the same as their donors, and that is for most of the money they raise to go to their cause. However, administrative and operational costs often cause an average of only 63 cents on every dollar raised to actually go to the cause. The other 37 cents goes to overhead costs. How can nonprofits lower their overhead costs so more of the money they raise goes to their cause?

Business Model

Many nonprofits forget that just because they do not work to make a profit, they still need to run their organization like a business trying to earn one. Even nonprofits have to be able to pay their monthly overhead, and make best efforts to meet the mission and stockpile money for a rainy month, quarter or year when contributions dry up. A nonprofit can start by developing a business plan, inclusive of an operations and marketing budget, and actually stick to it. Also, keeping the team updated on the organization’s financial health may help keep them focused and control costs.

IT, Equipment and Software: Are There Savings There?

Reevaluating an organization’s IT and phone systems, as there are many alternatives, can help a nonprofit save money. Most of the operations costs of the organization can come from this department so keeping a sharp eye, and an even sharper pencil, can make or break a given month.

Phone services in any office can be expensive, especially if you have multiple lines, a 1-800 number, fax etc. When is the last time you evaluated your phone needs and sought alternative pricing? One might even find that fewer lines may suffice, and the organization was oversold in the beginning with tales of telethons bringing in thousands.

Checking all software options may result in additional savings for a nonprofit organization. Google Nonprofits gives free access to apps such as storage and calendars, as well as a host of other IT needs.

Discounts and Freebies

As a nonprofit, a key to getting mandatory needs met may be in asking for discounts, or even freebies. By establishing relationships with community leaders and business owners, a nonprofit can often leverage those relationships to gain assistance with outsourced services, many of which typically come with a price tag.

A nonprofit organization should always publish a wish list or an items-needed list and ensure everyone in the organization is keeping their eyes open for opportunities. Many contributors to the nonprofit feel more comfortable donating needed items even more so than money.


Individuals that volunteer at a nonprofit are by far the most important asset an organization can have. Volunteers need to be tapped as a resource as much as possible. Most people love to be needed and enjoy it when they are asked to help. An organization should be courteous and respectful of the volunteer’s time so they stay with the organization for a long time. It is also a great idea to show appreciation for their hard work by giving them small gifts, feeding them on a long shift and/or just saying thank you.

How Does a Nonprofit Organization Retain Volunteers?

  1. Ask for help — most people like to feel needed
  2. Treat the volunteers with respect so they keep coming back
  3. If someone says no, don’t be afraid to ask in the future; no doesn’t mean no forever, it just might be no for right now
  4. Interview the volunteer before bringing them onboard to ensure they are a good fit for the organization
  5. Provide the volunteer a clear, detailed description of what s/he will be doing so they clearly understand expectations
  6. Look to local community groups such as Rotary clubs, churches, alumni organizations and social and women’s groups to recruit new volunteers
  7. Sign up for free volunteer software to help monitor and manage schedules for your volunteers
  8. Try websites, like Volunteer Match, which allow nonprofits to post positions available and what type of volunteers they are seeking

Attracting Younger Volunteers

Attracting younger volunteers can be a great idea. They have new ideas and contacts to secure new donors, as well as how to market the organization to other young people. But how do you convince a young person to sign up? Here are some cues to look out for:

  1. Everyone likes to know their work will make a difference, so focus on telling potential volunteers how they will be making an impact
  2. Use social media channels that young people frequent to disseminate your message, such as Snapchat, Twitter, Instagram and/or Youtube
  3. Share heartfelt, emotionally stirring stories by video across social media – the best are just long enough to cover the subject, yet short enough to hold interest, and typically contain a call to action
  4. Attend schools and universities with other young volunteers so they can tell their stories about how volunteering has changed their lives and how volunteering could change theirs too

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