3 Ways to Reduce Overhead Costs in Your NGO
Posted by Daniel Baker
Looking for ways to cut administrative costs without losing administrative abilities?
Cost cutting measures give your NGO the opportunity to streamline your administrative side and look for ways to free up your funding for other projects.
The global economic reality today has put a chill on government grants and charitable donations. Meanwhile, regulation and public scrutiny are making it more challenging to keep staff and volunteers committed to the causes that drive NGOs. While administrative costs for NGOs continue on an inexorable path upward, you are likely facing increased pressure to spend every dollar raised on projects that further your core missions, and the demands of running your organization don't get the attention they deserve.
Cost cutting measures could give your NGO the opportunity to streamline your administrative side and uncover ways to free up funding for other projects.
Reducing administrative costs is never an easy task, especially when you’re already operating on a lean budget with limited resources and unpredictable funding. We’ve compiled a few creative ways solutions being used by some of the most successful NGOs today to help reduce overhead costs.
1. Streamline resource planning
NGOs tend to put off upgrades to their IT infrastructures because board members and donors would rather see the organizations' funds tied to high-profile success stories. Unfortunately, legacy ERP and business systems require a great deal of training, maintenance, and manipulation. Any changes to these systems require recoding by IT specialists. Problems like these add up to wasted time and incremental costs that hamstring higher profile projects that stakeholders want to see.
2. Stabilize your systems
Organizational development and growth is an on-going process for NGOs. Costs are incurred whenever organizations are faced with new and unexpected challenges, growth, and regulation changes and will most likely double if your systems aren’t able to meet the demands of those changes. Effective management systems that are agile enough to handle policy updates, expansion in other countries and the onboarding process of new volunteers can eliminate costs towards maintenance, IT customization and, in some cases, a team of IT consultants to make these changes.
3. Create an expense task force
Your staff knows best where expenses are hurting the organization. Put together a task force consisting of volunteer coordinators, managers and executives to identify possible discrepancies. Donors and the people you serve may also have original and powerful insights, which can be captured through surveys or one-on-one communications. Don't consider this task force as a drain on resources; the ROI could be substantial.
To learn more about these 3 tactics, and other ways to cut costs without losing valuable members of your NGO’s team, download 12 strategies to reduce administrative costs for NGOs.