How to Increase Nonprofit Profitability Through Optimizing Your Processes

Have you ever thought your processes tripped you up more than they helped you achieve your end result, especially in the decision-making process? Often, as nonprofits experience rapid growth, their processes don’t grow alongside them. The processes you were once comfortable with, that helped start your successful nonprofit, now slow you down as your nonprofit grows and evolves. If you don’t re-evaluate processes periodically and evolve them, it will impact the bottom-line profitability.

Here are three steps to begin improving your processes:

1. Evaluate Your Staff Roles and Responsibilities

Start by evaluating your nonprofit’s processes, roles, and responsibilities. Doing so will help prompt efficiency by creating clarity for your team. Strategically think about what functions your team is carrying out. Do their skills align with the work currently assigned to them?

Lay out the various daily, weekly, monthly, and annual tasks that need to be completed, along with the people in your organization available to carry out that work. Often, you find opportunities to shift roles and responsibilities from one teammate to another to better align with skillsets or that fit well with other assigned tasks they are performing.

2. Create Formal Documentation

Now go one step further: document those processes. Formal documentation allows employees to get into a better routine and have clarity about the expectations of their role. A good routine in a team creates automation. They become so familiar with their responsibilities that they are better equipped to complete their tasks, think creatively about future improvements, and have the energy to think critically when non-routine work comes up.

The clarity provided from documentation also helps your team back each other up. The increased documentation helps ease the burden of an employee’s unexpected absence. Traditionally, without a documented process, it is easy for something to fall through the cracks or add excess stress to the employees left to carry out the functions.

3. Is Your Software Serving You?

Just as your nonprofit evolves and grows, so should the software you use. When you’re already juggling competing priorities, it isn’t easy to stay up to date on how your current software can continue working for you. Software continues to develop valuable integrations that allow for automation with invoicing, bank and credit card accounts, and other key processes that can save your employees time in their everyday processes. So, as a part of periodically looking at processes, it is good to consider how software can create efficiencies or controls in processes. As you leverage additional enhancements in your software, you may find capacity in your team for more value-added activities that do not allow for automation.

Begin Seeing Clearly with Your Newly Updated Processes

Once you go through the steps of aligning roles and responsibilities with your team’s skillset, creating formal documentation, and evaluating your software capabilities, your operations start running more predictably with higher quality output. That output comes in the form of timely financial reporting you can depend on. With the right design, that information allows you to make timely financial decisions to continue managing your nonprofit’s profitability.