Streamlining Costs Where It Makes Cents

Keeping Your Fundraising and Marketing Budget OFF the Chopping Block.

Financial Audits: Make the Most of Your Money

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Streamlining Costs Where It Makes Cents
Ashley S. Treble

Streamlined spending encompasses many different efforts.
This is more involved than simply reducing expenses and the impact on your organization is much greater than saving money alone. By streamlining spending and processes, you can target cost-saving methods as well as reduce both redundant efforts and expenditures.

To Print or Not to Print
Be aware you and your organizations printing habits. Paper and ink/toner costs can add up fast. Don’t print reports when the goal is to share information. It would be more efficient to e-mail a PDF or, better yet, meet with people face-to-face, taking time to explain figures in person. If you are on the receiving end of these efforts consider not printing e-mails unless it’s truly necessary.

Sometimes it is necessary to print, so find ways to do it effectively. Are you printing a 3000 row spreadsheet that could be better or more simply portrayed and understood with a graphic analysis? Perhaps it would be better for massive amounts of information to be represented by charts and graphs which help to tell a story, all the while saving paper and making an easily understandable bridge between data and humans.

In the world of audit compliance, it’s easy to get caught up in printing hard copies of documents for your records, photocopying for others’ records, photocopying for additional records, photocopying for the shipper or even your vendor. By the time everyone has a copy, you’ve printed 25 sheets of the same document—now multiply that by 500 vendors. In this case, it’s much more cost efficient to purchase a scanner for the office. Scan in every document to be saved electronically with related information. This maintains a centralized repository for all your critical documents to easily provide audit-ability and on-demand access. Any time someone needs a copy, it can be quickly and easily e-mailed.

Sell Yourself on Streamlined Processes
Researchers have found that decreasing procurement costs by as little as one percent actually has an equal effect on the profit margin as a 10 percent increase in revenue.

Think of your accounting software as a central hub for invoices, purchase orders, and vendor profiles. Use electronic payment to fulfill your obligations, increasing efficiency. Centralize information to provide easy access to all users—as opposed to each individual staff member using a personal filing method—and for complete profiles that can be tracked to maintain a history. Using technology to track deadlines and discounts, you can reduce expenses by side-stepping penalties and taking advantage of any money-saving opportunities. Together, this helps to streamline purchasing.

Set Some Boundaries
To see where your specific organization can reduce spending, it’s best to monitor budgets to see where the cash flow is really going. This is a good way to see where money is being devoted—and the potential for it to bolster your mission-propelling programs.

Also, analyzing spending ratios and trends allows you to evaluate the dollar signs that are escaping your grasp for no good reason. For instance, excessive paper usage might be pinpointed by realizing the cost outweighs the actual need of the organization. You can use technology to lock in those miscellaneous dollars by setting spending limits. It’s a way to keep budgeted money in the right categories.

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Keeping Your Fundraising and Marketing Budget OFF the Chopping Block.
Adam Slater

Let’s face it, when times get tough a common reaction by many nonprofits is to drastically reduce expenditures across all marketing and fundraising efforts. It is, after all, the only way to balance your budget. Correct?

Absolutely not! With the collapse of the real estate bubble and the looming credit crisis fueling a downward trend in our nation’s economy, every nonprofit has to fight that much harder for every dollar they seek. While management’s decision to put your marketing and fundraising efforts on the chopping block may seem like low hanging fruit, and make the most sense politically, simply clear cutting your marketing expenses is definitely not the wisest path to survival during these difficult times. Your fundraising efforts are the lifeblood of your organization. And, when these funds are annihilated within a nonprofit, it’s like severing the hand that feeds it.

Luckily, there are other ways to reign in costs without having to offer up your marketing agenda as a sacrificial lamb. Instead of focusing on “less,” try shifting your organization’s focus to "different." There is no golden rule that says a smaller budget cannot be innovative, exciting, and different. The idea is to allocate more resources to the initiatives that matter the most. It’s all about tightening your focus on your objectives, identifying your best potential donors, building a solid branding approach, and drafting a budgeting strategy that enables you to accomplish all these essential activities.

However, the toughest challenge is often convincing your management team that your marketing and fundraising efforts are not expendable, but rather an absolutely critical means to generating revenue, raising awareness, growing your donor base, etc. Here are some tips that can help you make your case:

Be a Diplomat – The last way you want to be perceived when defending your budget is defensive. Be as diplomatic as possible. Approach your management team in the spirit of collaboration, and convey your deep understanding of the budgeting crisis along with your departments’ dedication to continuing to meet your organizations’ year-end objectives.

Be Optimistic – A softening economy is not a time to retreat and hide until the storm blows over. Make a strong case for leaving your budget intact. Do your homework and come back with a plan. For example: By leaving these fundraising initiatives in place we will be able to increase X by X in the next fiscal year. Better still, if you increase our budget by X, we will increase X by an additional X.

Be Responsive – If you expect your management team to throw more money your way they’re going to want the reassurance that their investment is being met with success. This means your team will need to be more proactive than ever when it comes to reporting out on results to prove the value of your efforts. Keep close track and report out regularly on the following activities:

• Direct Marketing – Monitor and update key stakeholders on the direct mail and e-mail response rates and ROI on an ongoing basis.
• Public Relations – Maintain a comprehensive record of all media relationships and provide details of coverage by media type, i.e., newspaper, broadcast, podcast, magazine, Web, etc.
• Initiative Performance – The idea is to be “over-communicative.” Slice and dice the numbers for your management team to give everyone on the team a solid grasp of how all your initiatives are performing, such as Charitable Gift Annuities, Bequests, Matching Gift Programs, Planned Giving Programs, New Revenue Streams, etc. Keep them in the loop better than ever before.

In difficult times one of the most careless mistakes many nonprofits make is instituting budget cuts in fundraising and marketing across-the-board, and then attempting to simply make do. It’s most often a recipe for disaster. But, no matter what your budget is, it needs to be allocated strategically, not cut clear across departments and fundraising initiatives. Just because your marketing budget is slashed by 10 percent down the line doesn’t mean your initiatives are just 10 percent less effective. The hard fact is that your campaign’s performance will most likely be off by 50 percent or more.

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Financial Audits: Make the Most of Your Money
Bridget Brandt and Heather Burton

Today’s donors view themselves as investors. Whether it’s $10 or $10 million dollars, they want maximum mission-return on their investment. Should you make sure you are maximizing your income-earning opportunities as well?

You bet! It can be surprising how much money a nonprofit can earn, or save, by evaluating their financial accounts. With the end of the fiscal year approaching for many organizations, it’s a great time to investigate opportunities to make your hard-earned donations and grants work for you. Here are a few things to think about:

• Watch Loan Rates – Do you have a loan on your building or property? Or are you considering purchasing the office you currently rent? Now may be the perfect time. With such low interest rates, you may be able to get much more than you original thought or reduce what you are paying by refinancing a high rate loan. Even 1 point (1%) can save you a lot of money depending on the loan amount and terms. Visit this financial tools site (http://www.kiplinger.com/tools/) to see how much you can actually save, and then contact your financial institution.

• Check Your Accounts – This seems like a no brainer, but when was the last time you reviewed the fee schedule or the interest rate you are earning on your accounts? The basic checking may have been the right option at the time, but it may be appropriate to investigate other options like money market accounts, sweep accounts, or investment accounts. Also, investigate different types of financial institutions (bank, credit union, investment bank) as they will all have different offers. To help spread the work, ask one of your volunteers, board members or even form a committee of financial professionals to check around for good rates and appropriate account types. They will like the idea of checking on something that could net such a huge return for the nonprofit.

• Consider Investment Accounts – These types of accounts are a great way to potentially earn additional dollars for your mission especially if the funds you raised are not going to be utilized immediately. As with any investment, there is also associated risk. Please do your homework, understand your organization’s risk tolerance and seek the advice of one or more experts before placing funds in any type of investment account. If you can find a risk-return balance that makes sense for your organization, you may find that you can generate income to help further your mission.

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