Over the next several months, we’ll discuss how small to medium-sized nonprofits with limited funding can stand out in a competitive landscape. This week, we’re focusing on creating Economies of Scale. Now, I could spend the next 1000 words talking about technology alone, but there are tons of experts in that field. So, I’d like to concentrate more on the items that you may be overlooking.
Thank you for reading this post, don’t forget to subscribe!Last week, we talked about building a Professional Fundraising strategy for your growing nonprofit. As we discussed:
“Building a sustainable fundraising strategy is essential for nonprofits to thrive. By incorporating professional tactics such as grant writing, donor cultivation, and leveraging technology, your nonprofit can grow its impact and secure the resources needed to fulfill its mission.”
Great, but now you want to grow. Well, that’s where the next step comes in.
Economies of scale—a business concept where increasing production volume lowers the cost of doing business—may seem like a far-off concept reserved for larger nonprofits. However, your small team of devoted professionals can benefit from the same strategies to increase efficiency without increasing payroll. The key lies in maximizing every available resource, leveraging partnerships and technology, and streamlining processes to reduce costs while improving results for the communities you serve.
Collaboration and Partnerships: Share the Load
Strategic partnerships are one of the fastest and most cost-effective tools for leveling up your operations. Whether through joint programs or events, a good partnership allows nonprofits to pool resources—such as sharing venues, marketing materials, or administrative costs. Identify inefficiencies in your systems and look for partners whose strengths align with your needs. If your organization can provide reciprocal support, you’re on your way to forming a productive partnership.
In the early stages of the revitalization effort I led in El Dorado, AR—which resulted in over $100 million invested in creating a downtown Arts District—our team started with just two employees and a dedicated board. Despite limited resources, we raised nearly $30 million before adding a third staff member. How? Strategic partnerships. Always be on the lookout for ways to expand your reach by offering your organization’s expertise to other groups working toward similar goals.
At The Barrow Gang, we’re passionate about helping nonprofits reach their full potential. Whether it’s strategic planning, board growth, or fundraising, we have the tools to support your mission. Schedule a free 15-minute consultation to share what you’re working on and discover how we can help make your vision a reality.
Outsourcing: Let the Experts Handle It
When I took on my first executive director position, I didn’t know what a P&L statement was. Financial management wasn’t my strength, and it was a source of stress rather than strategy. Over time, I learned, but outsourcing accounting—and other non-core activities like marketing and IT—freed up time to focus on mission-critical tasks.
Leaders of small organizations often feel the need to provide all the answers, but sometimes the best answer is to ask for help. Outsourcing allows you to benefit from professional expertise without the overhead of hiring full-time staff. Just be sure the quality of outsourced work aligns with your nonprofit’s standards and mission.
Volunteer Utilization: Tap into Skilled Labor
Volunteers are often the lifeblood of a nonprofit, especially in its early stages. Inspiring others to join your cause and contribute their skills is crucial. Volunteers can bring specialized talents—like graphic design, legal advice, or event planning—but to maximize their contributions, you’ll need a solid recruitment, training, and retention system. Volunteers thrive when they have clear direction and meaningful opportunities to contribute.
A great example of volunteer success is the Pageant of the Masters in Laguna Beach, CA. Running since 1932, this massive production relies on a small staff and hundreds of dedicated volunteers who donate weeks of their time every summer. Without this unpaid labor, the organization wouldn’t be able to offer its affordable, high-quality programming. Volunteers not only make the mission possible but also become the organization’s best recruiters for future volunteers.
Focused Objectives: Narrow Your Focus for Better Results
Few things can damage a nonprofit more than mission creep. It’s tempting to expand your scope, but spreading resources too thin can suffocate progress, overburden employees, and derail expectations. Staying laser-focused on your core mission is critical.
Mission creep often occurs when new leadership—such as an executive director or board president—introduces personal agendas that don’t fully align with the organization’s vision. These ideas may be sold as exciting opportunities, but without a clear, well-thought-out plan, they can stretch resources to the breaking point. Protect your organization’s focus by sticking to its core objectives and ensuring every new initiative aligns with your mission.
Leverage Existing Assets: Make the Most of What You Have
When you’re starting out, you have to be willing to scrape every ounce of peanut butter out of the jar. Maximizing your assets—whether physical, financial, or skill-based—is critical to survival and growth.
Have extra space or specialty equipment? Rent it out. Received a large grant or donation? Invest it wisely to stretch the funds further. Often, the tools or talents you need are already within your team or network. For example, who on your staff has a knack for graphic design? Which volunteer takes the best photos on Instagram? Get creative with what you already have, and you’ll uncover untapped resources.
Regular Assessment: Improve Efficiency
To make the most of your resources, regularly assess your operations to identify inefficiencies. This should be an annual practice for all organizations, but for lean teams, it’s even more critical. Small changes—like switching vendors, adopting new technology, or restructuring a program—can lead to significant cost savings. Regularly reviewing your finances, operations, and outcomes ensures your nonprofit operates as leanly as possible without sacrificing impact.
Economies of scale allow larger nonprofits to stretch their resources further, but smaller organizations can achieve similar results by employing strategic practices like collaboration, outsourcing, leveraging assets, and regularly assessing success. It’s cliche, but working smarter and not harder does pay off in the long run.