What is Financial Sustainability for Nonprofit Organizations?
You can define sustainability in many ways but when it comes to nonprofits, it usually means having a reliable source of revenue or funding that can help cover the costs of your programs and events and help your organization reach its goals in the long run.
How to Become Financially Sustainable as an Organization?
Finding a financial sustainability model that works for your organization is a tricky feat. But here are some factors that you can consider in order to make sure you are on the right track.
1. Have a Long Term Plan
It is essential to look at your organization through the lens of long term planning. Decisions that you make today should, in some way, contribute to the goals you have set as an organization.
You will undoubtedly stand for a cause as a nonprofit – make sure that any event or decision that you are dedicating resources towards is worth it. This way, you won’t be spending resources unnecessarily.
2. Measure Your Impact
Being careful to not misplace resources is one thing. But putting resources into programs that you believe will be impactful only to fall short is a common problem. Maybe your program is outlined correctly but not targeted to the right people.
This could have the same effect as plugging resources into useless programs. In order to overcome this, measure the impact you have by studying different metrics and if you feel your efforts aren’t fruitful enough, change things up and try a new technique.
3. Financial Predictions
Any organization, whether it’s for-profit or nonprofit, requires a good long term financing plan. This should include details of how much money you would arguably need in the long run, the purposes the money will be used for, and how you expect to achieve them.
For a nonprofit financial plan, you will likely be paying close attention to funding stream – whether it’s through grants or donors. The most sustainable way to go about this is to make sure you have multiple, reliable streams even if the individual value of contributions isn’t as high.
This will be more dependable than relying on fewer, high-value contributions as your organization could end up in a tighter crunch if anyone backs out.
4. Focus on More than Just Funds
While funds are important, as a nonprofit, you will also require a number of other resources. Don’t underestimate the value of gifts given in kind, or a dedicated volunteer base. Your goal, as an organization, is to help a cause and there are a number of ways you can be helped.
Focus on having members who are willing to campaign for your organization, volunteer, offer their expertise – there’s a lot you can benefit from that isn’t money!
Nonprofit sustainability is never set in stone. Find what works for your organization and customize it accordingly. You’ll have your feet firmly rooted in the ground in no time!