October 14, 2019

How Can You, Like the Best Nonprofits, Run a Surplus?

If you want to run a surplus at your nonprofit, two options exist:
  • Live within means or
  • Grow your income.
I assume you don’t want to shrink or even stay with your current budget.
Imagine it’s a year from now, and your budget is growing. You have leftover funds for a rainy day. You can buy the little extras that have been begging to get done. Best of all, instead of year’s end anxiety sessions, you pop the cork to celebrate.

How can you, like the best nonprofits, run a surplus? What’s the secret?

1. Focus

Successful nonprofits determine one key income stream to grow. They pick one that works best for their work (one size does not fit all.) Then they become a world-class expert at obtaining that revenue. Yes, nonprofits mix and match seven different income streams. To thrive, however, they focus. Once they know the source, they engage everyone to help grow it. See Let’s Raise Nonprofit Millions Together.)

2. Before Do, They Evaluate 

New nonprofits pursue every kind of income they can catch. As they grow, they become selective. Minnows don’t justify the effort. Even though they’re hungry, they toss back the small fry to land bigger fish. In other words, nonprofits that run surpluses establish and use criteria before selecting activities. They pursue opportunities that provide returns that amply reward their time and financial investments.

3. They Kondo Their Nonprofits

Marie Kondo teaches us how to declutter our homes.  Nonprofits can benefit from decluttering their organizations.  To evaluate opportunities and zero in on their key income stream, nonprofits that run surpluses clear clutter. Success is not doing more and more. Success means focusing on signature activities, that is, efforts that create the most outcomes. Getting rid of clutter at your nonprofits means fewer events and less work that doesn’t move the needle. Honor and let go of ineffective activities that no longer serve you, even if they were once brilliant.
Do you want to run a surplus? Focus; before you do, evaluate returns; and declutter your activity list.


Karen Eber Davis

Karen Eber Davis provides customized advising and coaching around nonprofit strategy and board development. People leaders hire her to bring clarity to sticky situations, break through barriers that seem insurmountable, and align people for better futures. She is the author of 7 Nonprofit Income Streams and Let's Raise Nonprofit Millions Together.


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