How To Make Money Running A Non-Profit

Running any business is difficult and a non-profit is no different. In order to successfully raise money and help others, you have to treat the non-profit as a regular business. The truth is that you still have an array of administrative costs and these need to be covered before you can start using extra money to manage cash flow and help others.

Know Your Non-Profit

The key to making money is to know what type of non-profit you are running. There is a big difference between collecting clothes and food for those in need, compared to the donations needed by Surf Life Saving Australia. The first simply wants to collect clothes and food, its costs revolve around administrative work and organizing the necessary transport. Surf lifesaving is centered on training surf lifesavers and providing the 180,000 volunteers with the equipment they need to save lives. In order to make money running a non-profit, you need to understand what they need money for and how much is needed.

Check Tax Liability

No-profits don’t generally pay tax. However, this does depend on how you get your money. For example, if you collect clothes to give away to those in need then you are not going to be liable for tax. However, if you buy and sell children’s toys in order to raise money for the homeless then your income is unrelated to what you are doing and you may be liable for tax. It’s important to check first. This will help you to budget correctly and avoid any nasty tax service fees in the future.

Identifying Money Sources

The next step to successfully make money running a non-profit is to look at where the funds come from. It is usually a mixture of places, such as subscriptions, grants, business fundraising ideas, and even by selling off old equipment. You need to know where your money comes from in order to identify the most lucrative channels. You can then develop strategies to boost the income from those channels.

At the same time, you will be able to identify any current money sources that are performing very badly. This will help you to evaluate whether they are worth continuing or not. When you’re looking at money sources you should always be aware of what other options are available.

Know Your Costs

The next step is to carefully identify all your costs. A non-profit will have similar costs to any business, they need to rent space to work, may need to pay some of their staff, and have an array of administrative work. This includes organizing events and employee training. Alongside this, there will be insurance costs and even accounting fees. You’ll also need t include the cost of paying yourself, that’s how you will make money running a non-profit.

The good news is that these costs should all be quantifiable, making it easier to create a list of expenses or costs and this will help you to identify how much you need to raise annually simply to cover costs. It should be noted that charities are regularly monitored, specifically the accounts you file. These show how much of the income you generate actually ends up helping your cause. Most rating sites will not look favorably on any non-profit that spends less than a third of their donations on the cause.

Additional Ways To Earn Money From Your Non-profit

Alongside taking a wage from your non-profit, there are a number of other perks you can embrace. For example, as the owner, you’ll need to visit many different areas and businesses to help enlist support. To do this you’ll need a car and the non-profit can supply that for you. You can also charge expenses to the non-profit, provided they are incurred when on non-profit business. This includes fuel costs, car and vehicle maintenance, and even meals while traveling to and from potential donors or taking them out for a meal to encourage them to give generously.

In addition, you can get qualified for liability insurance coverage as a non-profit organization. However, you should remember that these types of expenses are treated in the same way as any other business, don’t go overboard with them. A non-profit must be seen to be helping the cause it was established for, but there is plenty of room for you to make a comfortable income while this is happening.