We have the privilege of working with numerous regional non-profits who are focussed on maximizing the resources they need to pursue their missions. Most feel the pressure to focus on revenue generation. After all, they are likely already painfully understaffed, and “cuts” seem counter to their missions.
But cuts in costs don’t have to be cuts in service. If you find your non-profit in this boat, consider carving out a little time to strategize creative ways to attack your biggest cost centers.
Often you can find ways to make a big impact on expenses without cutting services.
The first step is identifying your biggest cost centers. Is there a fundamental supply stream you need to provide your service? Do you face the high utility and maintenance costs of operating numerous physical locations?
Once you have the list, sit down with your leadership team and think creatively about each one.
We’ve heard of a large homeless shelter that cut its growing bedding costs by reaching out to local hotels, who they found out were discarding large numbers of lightly used linens. We’ve heard of an international medical relief agency that partnered with other agencies serving the same regions to share their high-cost shipping container space and logistics.
What are your biggest ticket expenses? Is it the electricity for your big museum or historic property? Maybe you can find a grant or green-energy partner to help with solar panels and other improvements that can take you down to net-zero on energy consumption. Maybe a local business with lots of vehicles will agree to service and fuel your fleet at cost (and maybe the added volume will even deliver some savings to your partner.)
Sometimes we get locked into a mentality that there are only two options — cutting an expense or raising the money to pay for it. With some focus and creativity, you might just find a third way.
At Duncan Williams Asset Management, we love to help non-profits run smarter and more sustainably. If you’ve got a financial question about your non-profit’s financial health or strategy, give us a call. We’d love to talk.