Kind-hearted people and groups are out there, trying to do the best they can for their fellow human beings through organizations like nonprofits. Most have wonderful ideas, but getting them started can be challenging. Thankfully, many people believe that good things are worth the struggle. One major struggle is the financial struggle, but the following guide may help you navigate that initial startup nonprofit budget.
Know the Basics
In the beginning, the budget of mosts nonprofits is either small or almost non-existent, so you are not alone. Still, there are certain expenses you are not going to be able to avoid.
Knowing what those expenses are could prepare you to allocate the money needed; for example, you need to be prepared to pay a fee to file for your 501(c)3 status. If you are operating with $10,000 or a similar amount, then the fee should not be higher than $400.
It is important to point out that your organization will need to file form 1023. You are only going to be given 15 months to file this paperwork, which is meant to evaluate your nonprofit’s overall goal and program. You’ll need this to claim your 501(c)3 status, which will cost you approximately $850. That amount may seem steep, but it is pretty standard for that particular form.
Yes, this all sounds like a lot of work, but you will see it is worth it when you file taxes. Be sure to learn about the exemptions your startup nonprofit is entitled to now that you are a 501(c)3.
Secure Money & Reduce Costs
The next thing you want to do as a startup nonprofit to figure out a way to increase your revenue and reduce your costs.
There are a number of ways you can reduce your costs. For example, you can use shared hosting rather than solo hosting.
Try to look for little discounts here and there, such as the one just mentioned to try to keep more of your money. You also want to make sure you keep a list of needs and wants, spending money only on things that keep your nonprofit afloat and nothing more, until you are more stable.
It might also be a good idea to concentrate on creating a monthly giving program.
The reason you want to focus on monthly giving or a recurring payment is because these are much more reliable than large donations. No one is saying that large donations aren’t desirable, but they are more like icing on the cake rather than the cake.
Redirecting your efforts towards attracting monthly donors rather than just big donors is a good idea, but it is going to take some time, so be patient.
These are just some of things nonprofits can do to increase their revenue. It may be a good idea to talk to a financial advisor as you attempt to work with your small budget. You should also research grants that are available to nonprofits like yours, which could be federal or state provided.
Keep Your Eyes on the Prize
There is no doubt that a startup nonprofit that is struggling with finances might focus on money aggressively. There is nothing wrong with focusing on money, but do not let that take precedence over your most important goal: the mission.
The reason you do not want to take your eyes off the mission is because those who truly believe in your mission and see that you do too may encourage like-minded individuals to donate or volunteer to your cause.
You might be surprised, but people can feel when a nonprofit or an individual really wants to see certain goals achieved. In essence, you want to make sure it is your mission that is driving the nonprofit, and everything else should be secondary.
These are just some of the things you can do to handle your budget at the moment, but there are other things you can do. For one, you can try to seek advice from another similar startup nonprofit because these organizations have been where you are, so they might be able to give you valuable advice.