7 Ways to Cut Organizational Expenses in Changing Times

During hard and changing times nonprofits may find it necessary to cut costs. Here are 7 tips to help with difficult decisions.

COVID-19 has meant we have been dealing with a significant period of uncertainty putting a huge strain on people’s mental wellbeing. As we wonder what comes next the press is full of predictions on the economic impact. We know it’s going to be bad, what we don’t yet know is how bad. With non-profit organizations already feeling the impact of losing large amounts of fundraising income, the inevitable cost-cutting comes next.

So what can you do when the spotlight is turned on you and your teams?

Let’s talk about office space and cost savings

One thing proven in the last few months is that office space is not always essential. Sure, there will be people who have a preference for working in the office but large swathes of us have now created home office set-ups that mean we can work effectively without the daily commute.

Tip #1 – Office Space Savings

Survey your teams to understand their preferences. Build up an understanding of what’s essential and what’s not. Could you have a smaller space and company retreats every few months as an alternative?

Cheaper is not always better

And this is important. If your donation forms convert poorly do they have value? How much money are you leaving on the table by not being able to add a Facebook retargeting pixel? Or being able to test and optimize your donation forms? Sure, it may not be costing you a lot of money but if you can’t offer an experience that motivates and inspires supporters to give to your organization don’t be surprised when their donations go elsewhere.

Tip #2 – Don’t Drop Your Optimization Efforts for Cost Savings

Make sure you have a testing and optimization strategy for your donation forms and that this is ongoing. Small changes can make a big difference in conversion rates.

Consider your partners

Who are the people who are continuing to invest and innovate even in these challenging times? Who is there at the end of the phone able to help and support you? When was the last time you spoke to your partners and asked them to take you through new features and products they can offer?

Tip #3 – Maintain Partner Relationships

Know what your goals are, for example, you want to grow income by x%, convert x% of single donors to regular donors or… introduce new activities. First of all, speak to your existing suppliers, you never know if this may be something they already offer and can add to your existing package at a small cost. Also, if you need to cut costs, consider scaling back but not cancelling work altogether.

Remove inefficiencies

I have lost track of the number of organizations that don’t even realize they are being inefficient. For example, the campaigns team uses one email tool, comms another and the fundraising team are using something else they like. Because everyone is focused on their team’s needs rather than looking at the bigger picture, all of a sudden there are three suppliers to manage, three data feeds and specific training needed on each product. That’s before you even consider the data and compliance risks. You will save costs through consolidating.

Tip #4 – Consolidate Systems Where Possible

Do a software audit and consolidate your suppliers where possible. There will be winners and losers here. But using a system that does it all compared to losing a member of your team through redundancy has to be a good outcome, right? Engaging Networks may be able to help you with that by the way.

Don’t fear outsourcing

We are at a point in time where we need to switch gears. The ways we’ve always done things are no longer working and a fresh perspective is needed. Outsourcing allows you to hire the person you need, when you need them, without spending money on a full-time salary with benefits. Contract workers have to regularly compete for jobs and so they’re likely to be creative, responsible, and keep their knowledge and skills updated.

Tip #5 – Determine What you Can Outsource Successfully

Some tasks and projects lend themselves to outsourcing better than others. Think carefully about what you want to outsource and avoid areas that need a personal touch. Identify projects that don’t fit with the core skills and competencies you have within the team and can be done inexpensively.

People matter

Cutting staff is not an easy option. You can’t really forecast the impact on morale or output, but the loss of key relationships and operational knowledge is guaranteed to set you back. More importantly, how you treat people becomes part of your organization’s DNA. Plus, think of all the recruitment costs when you have to hire people once the economy takes an upturn.

Tip # – Only let People Go When Necessary

Unless you’ve got teams that duplicate each other’s work creating internal silo’s and facilitating inefficiency, look elsewhere for savings. Before laying people off consider offering part-time work so people remain with the organization and you retain motivation and momentum.

Be kind to yourself

We could never have predicted the situation we have found ourselves in today, it’s not something we could have planned for or protected against.

Tip #7 – We’re Only Human – Now More Than Ever

Take your holidays and regular breaks in your workday. Just because you can’t go away does not mean you shouldn’t have some time away from your inbox. Bake a cake, sit in the garden, go to the park. Find joy in the small things and recognize, this time will pass.

I’d love to hear about other ideas and suggestions you have that could be added to this list. Please send any suggestions to me any time.

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