Should a Nonprofit Be Profitable?

vincent chhabra non profitWhen one thinks of an non profit, you don’t often think of there actually being a profit. It needs to be realized that a nonprofit is actually a business and not just volunteer work. You need actual revenue in order to keep your non profit viable and sustainability. Furthermore, your staff should also be compensated for their time that they put into keeping your non profit running. Of course you should always be cognizant of the profit and exactly how much profit you make and show. Legally, there are restrictions on what a non profit can make in revenue. But this doesn’t mean that your nonprofit can’t be a profitable. There are a number of ways a non profit can make money in order to be a profitable organization. These suggestions will not only help bring in profit, it will also help with promotion and marketing.

One of the main ways that you can bring money into your nonprofit is to apply for a grant. In this instance, the main grants that are available are foundation, government, and corporate grants. When writing a grant, be sure to outline all expenses, operational, and administrative costs. These costs can include staff salary, any benefits, and as well as additional costs for basic upkeep (supplies, travel expenses, etc.). Be sure to be as specific as possible and outline each possible scenario.

Another suggestion is to hold a some sort of a fundraiser. There are a number of ideas and avenues you can go with this route. Furthermore, any donations made through this channel can be a tax write off for the person donating. A good way to go about this is to highlight that that the proceeds of the fundraiser is going to a specific purpose. You can create a marketing campaign surrounding this in order to get the consumer emotionally invested. By getting your guests to be emotionally invested, people will become more compelled to donate and they will feel like they are an actual part of the process.

You can also generate revenue by passive resources. you can obtain profit through rents, royalties, investments and/or interest payments. However, being that your organization will most likely be a 501(c) 3 tax exempt organization, you have to be 100% transparent with exactly where the money is coming from and what purpose the money is for. Be sure to check any legal restrictions to make sure that you are up to code and that you can accurately generate revenue.

As stated earlier, just because you are nonprofit, it doesn’t mean that you can’t be profitable. Running a nonprofit as a business will only ensure that you remain relevant and sustainable.