Nonprofit Management Tips for the Socially Conscious

The nonprofit workforce has grown from a fringe sector to a dynamic game-changer in recent years, as more and more young people seek to do right by humanity. The diverse and powerful social sector is an attractive option for young entrepreneurs looking to make a difference and effectively be their own boss. 

And the good news is that philanthropy can pay off: The idea that no one makes money in the nonprofit sector is a common misconception. In fact, while there are no stockholders to receive financial dividends, and generated revenue goes back into relevant programming, nonprofits are nonetheless quite profitable. In 2015 alone, America’s nonprofit sector brought in an estimated $985.4 billion.

In NYC, successful nonprofits encompass every social mission imaginable, from affordable housing to clean water access and skill-building in the workforce. City leaders do their part in giving back as well — In January 2020, for example, the NYC Department of Cultural Affairs (DCLA) awarded grants to 36 NYC-based nonprofits that work to increase art and culture access among non-native speakers. 

It’s important to note that successfully managing a nonprofit takes more than just a charitable spirit and dedication to humanity. You’ll also need a strong work ethic, the ability to multitask, and plenty of outside help. After all, running a nonprofit involves everything from volunteer management to fundraising, payroll logistics, and more. Here’s what you need to know if you’re ready to break into the dynamic field of nonprofit management.

Coordinating Volunteers and Resources

Data indicate that millennials are leading the nonprofit charge, and the demographic is expected to make up a full 75% of the nonprofit workforce by 2025.  And that number doesn’t even include volunteers, who are essentially the lifeblood of the nonprofit sector. They’re also inherently valuable to the process, as nonprofits save millions of dollars in labor and program delivery thanks to the efforts of volunteers.

But poor nonprofit management can result in a high volunteer turnover rate, which can undermine an organization’s mission and disrupt overall morale. Thus, nonprofit leaders must utilize an effective and mindful approach when recruiting and training volunteers to ensure a long fruitful partnership. It may be prudent to streamline the process by hiring a volunteer manager who handles volunteer coordination, recruitment, and training efforts.

It’s also imperative that nonprofit leaders understand the reasons why people volunteer their time, and what may change their mind. According to Ohio University, volunteers who freely give their time and talents “don’t want to be micromanaged, involved in office politics, or given menial tasks.” Therefore, volunteer managers should allow volunteers the opportunity to play to their strengths, such as tasking those with a marketing or sales background to fundraising efforts.

Financial Considerations for Your Nonprofit

Along with volunteer coordination, it’s in the interest of every nonprofit to enlist the help of one or more financial managers. After all, just because an individual is socially conscious and dedicated enough to launch a nonprofit doesn’t make that individual a financial whiz as well. And there’s plenty to deal with on the financial side of nonprofits, such as payroll of salaried employees, tax considerations (yes, even if your nonprofit is a 501(c) organization), and general cash flow matters. 

Further, financial managers should also have a strong grasp of the fundamental differences between income and revenue. In short, revenue is the total amount generated by a company’s usual operations. In the case of a nonprofit, the bulk of revenue is likely from charitable donations. Financial managers must further organize and invoice those donations, distinguishing between revenue from individuals versus corporate donations. 

Conversely, income is calculated by subtracting a nonprofit’s operating costs from its revenue. Operating costs may include any rent and utilities paid at your operation’s headquarters, along with employee salaries, and fundraising campaign costs such as the printing of leaflets or flyers. 

Balancing Politics and Philanthropy

Along with a financial manager and volunteer coordinator, other professionals may end up on your nonprofit’s payroll or volunteer roster. Although shareholders aren’t part of the nonprofit business model, there remains a need for a leadership team to help make financial and logistical decisions. In many cases, those tough decisions are handled by a board of directors who look to uphold the mission and aims of the nonprofit entity. 

In fact, having a board of directors in place is required by law if you hope to qualify for 501(c)(3) status, which legitimizes your nonprofit and allows for certain tax breaks. At least three people must serve on your nonprofit’s board of directors, and they cannot collect any income or salaries as compensation. Thus, nonprofit board of director jobsare, by definition, volunteer positions that eschew corporate interests.

The primary mission of a board of directors is to ensure that a nonprofit’s underlying mission is upheld. Their efforts help ensure that your nonprofit operates in an ethical and socially conscious manner. 

Final Thoughts

In our capitalist society, it has become abundantly clear that executives and corporations shouldn’t be in charge of helping society’s disadvantaged. If you’re looking to make a difference in the world, consider the ways in which operating a nonprofit may positively benefit society. But keep in mind that nonprofit management is a complex process, and you’ll need to partner with other like-minded professionals in order to make a real impact. 

Author: Sam Bowman writes about people, tech, wellness and how they merge. He enjoys getting to utilize the internet for community without actually having to leave his house. In his spare time he likes running, reading, and combining the two in a run to his local bookstore.

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