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The Difference Between Being Fiscally Responsible and Pinching Pennies

You work for a nonprofit. And that means spending minimal amounts of money and pinching every dollar to get by, right?

That’s the way many nonprofits think, but it’s not necessarily true.

The secret is this: you shouldn’t feel bad about spending money. Well, unless you’re buying yachts and sports cars with money that should go toward your mission, but that shouldn’t have to be said. Should it? Don’t do that.

At Cause Camp a couple years ago, Vu Le made a bold statement about crappy chairs (yes, you read that right). Are you really doing anybody a service by sitting in a crappy chair? Spend the money on a chair so that you’re comfortable while trying to save the world. Makes sense, right?

“We cannot be sitting on crappy chairs while we are helping the world,” Le said. “It’s counterproductive. We need to stop this scrappiness mentality that we have. We have this martyr complex where we have to be saving and we have to be suffering as much as our clients are. It does not work.”

Although you shouldn’t have to be scrappy in every aspect, you can make sure that you’re being cost efficient where it matters.

Necessity vs. want

It comes down to determining the difference between necessity and want. Just because your nonprofit would like a state-of-the-art facility with all new technology and the works doesn’t mean it’s possible from the get-go. I wholeheartedly agree with Vu—spend money on your chair. But maybe not one of these chairs.

Make sure your technology is good enough so that you can do your job to your best potential, but that doesn’t mean everyone in the office should have three screens.

Educate people with purchasing power

People who have purchasing power in your organization shouldn’t be left to wonder what they can and can’t spend money on. If your staff is scratching their heads and constantly asking for approval before purchasing anything, you need to reevaluate your training procedures. Staff members that need to make purchases should know their limitations.

Overhead shouldn’t rule

When it comes to overhead, you shouldn’t have to spend your time minimizing costs to save face with donors. We’ve talked at length about the overhead myth and how it paralyzes nonprofit organizations from feeling like they can’t spend money. Set yourself free. Help by demonstrating the necessity of your purchases and being transparent with your donors.

In short, when it comes to being fiscally responsible at your organization, it varies based on the budget of your organization and what you’re willing to spend. If you aren’t sure about your organization’s budget or when it’s okay to spend, simply ask for some parameters.

Originally posted 9.28.15 — Updated 7.20.18

The post The Difference Between Being Fiscally Responsible and Pinching Pennies appeared first on Nonprofit Hub.

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