Tips for reducing overhead (part 1)

As a follow up to last week's charity watchdog webinar, I've compiled some ideas for reducing overhead. I'm not suggesting we "starve" our organizations, just that we be savvy managers and good stewards of our donors' dollars.

The less we spend on administration and fundraising, the more we have to put toward program work. So here are some ideas for getting rid of unproductive activities or unused resources -- not because of the watchdogs, but because it’s the right thing to do.

I've split these recommendations into two posts. Here are the first three:

1. Conduct a top-to-bottom review of all contracts.

Do this for every vendor, every consultant, every lease. Explain that your audit committee has requested the review, so no one feels singled out. Examine all regular payments. If you’re not the one signing checks or approving every invoice, sit down with the people who are. Ask questions. Are these services still necessary? Can we renegotiate a better rate?

2. Look for pro bono support from professionals and help from volunteers.

Check with professional associations like the local bar association for pro bono help. Post volunteer jobs with VolunteerHub or VolunteerMatch to find long-term volunteers who can help with office tasks. I once found a correspondence secretary through VolunteerMatch who generated our major donor thank you's. Every week. For three years. She was like an angel from heaven.

3. Only hire fundraising staff when you absolutely have to.

Remember, a fundraiser needs to raise enough money to pay for his salary and benefits, to cover the cost of equipment and supplies, and to fund any special budget needs that come with activities he manages before he produces any net benefit to your organization. The average salary for manager-level development staff in metropolitan areas is around $80,000, so there are only two conditions under which I'd recommend hiring a fundraiser:

  • You need someone to manage existing fundraising activities. In this instance, you are either replacing outgoing staff or you need to free up the executive director or program staff from heavy fundraising responsibilities.
  • You are positive -- I mean, absolutely certain beyond the shadow of a doubt -- that there is potential for significant revenue growth. You can quantify it. You have prospects. You have names and dollar figures. You just need someone to help you take the next step.

More tips for reducing overhead to come . . .