While nonprofits differ from for-profits in structure and purpose, both can learn from each other. For-profit leaders can adopt nonprofits’ community-first approach—through meaningful philanthropy or brand-aligned foundations—while nonprofits can embrace a business mindset to scale impact: setting clear goals, measuring outcomes, diversifying revenue, and iterating quickly. In short, nonprofits that apply the strategies and adaptability of their for-profit peers are better positioned to grow, evolve, and achieve their mission.
Create and revisit your strategic plan – Business Mindset
Many for-profit companies rely on strategic plans as the backbone of their operational choices and decision-making. A strategic plan lays out the near- and long-term goals of an organization and details the steps to achieving them. Typically, the objectives of a strategic plan have varying time frames, from one year to five years to ten years out. Mapping out these goals allows companies to allocate resources accordingly and think strategically about their return on investment.
Some nonprofits also create strategic plans, but it is important to then use the plan and frequently revisit it, to ensure it is still meeting the needs of the organization. As communities evolve, funding shifts, or programs grow, it may be necessary to work with nonprofit audit services and revise the strategic plan accordingly.
Spend money to make money
Budgets are a common tool for both for-profit companies and nonprofit organizations, but nonprofits do not always align their financial planning with the stated goals in their strategic plan. As many for-profit business owners know, these two tools work best when used together and high priority items in the strategic plan should be supported with more resources.
If a nonprofit doesn’t have the ability to appropriately allocate their existing funds, they can, like for-profit businesses, consider taking a loan, or work to grow their endowment, or even create a for-profit subsidiary. There is more than one way to acquire the resources to meet strategic goals and create greater opportunities to fulfill the nonprofit’s mission.
The extra mile: transparent financials
In order to pursue their respective goals, nonprofits and for-profits not only rely on the financial support of their funders and investors, but also the trust of all those who have a financial stake in the organization or business. For-profits help to foster this trust through a high-degree of transparency that nonprofits can also emulate. With the help of a California nonprofit audit services, nonprofit organizations can go the extra mile and make audited financial data available to stakeholders and demonstrate the quality of their financial stewardship in the display of their sound accounting practices and internal controls.
Ernst Wintter & Associates LLP specialize in California non-profit audits and tax preparation. Contact us today for help with your non-profit audit or tax prep needs.
