Nonprofit organizations are the heartbeat of communities - driven by passion and purpose. In 2024 standing out will need some invaluable strategies and a clear determination.
This guide will show you the secrets to nonprofit success, from igniting donor enthusiasm to harnessing digital innovation.
Embrace these insights to captivate your supporters. Get the very best from resources. And get your mission's message out there like never before.
Get ready to inspire change and make a mark on the world!
7 Strategies to Run a Nonprofit
- Establish a Clear Mission
- Build a Team
- Know Your Donors
- Develop Policies
- Practice Financial Management
- Create a Funding Funnel
- Invest in a Fundraising Software
How to Start a Nonprofit Organization
A nonprofit organization operates to benefit those who need it and for charitable purposes. It does not make money for the organization itself.
It may be for religious, educational, health, literary, scientific, or animal welfare purposes.
To start a nonprofit, check your state-specific guidelines, as each state will have different criteria. Here is a brief overview of the steps involved in starting a nonprofit:
- Incorporate your nonprofit by filing articles of incorporation in your state.
- Get an Employer Identification Number (EIN) even if you don’t have employees.
- Set up a nonprofit board consisting of a minimum of three individuals: President, Secretary, and Treasurer.
- Create your nonprofit bylaws that explain how your nonprofit operates.
- Develop a written conflict-of-interest policy based on your state-specific requirements.
- Apply for 501(c)(3) tax-exempt status and state tax exemptions.
- You may need to register with the state before soliciting donations from residents. Visit the state website to find more information about registration.
Check out how to start a nonprofit in our detailed guide →
7 Best Practices for Running Your Nonprofit Organization Successfully
- Be Clear About Your Mission
- Build a Dedicated Team
- Know Your Donors
- Develop Good Governance and Leadership Policies
- Practice Prudent Financial Management
- Create a Diverse Funding Funnel
- Invest in an All-in-One Fundraising Platform
1. Be Clear About Your Mission
Every aspect of a nonprofit organization, from board development decisions to fundraising campaigns, is directed by its mission. An organization's mission is its reason to exist, its purpose, and its future.
Writing a clear mission statement will serve as a guiding light for the nonprofit. This ensures all efforts align with its core objectives.
It offers a roadmap for strategic planning, resource allocation, and decision-making. It also helps to attract donors, volunteers, and supporters who echo the organization's values.
The mission statement is shared alongside the vision and the values with employees at every level of the organization and other important stakeholders.
Successful nonprofit organizations prioritize a mission-oriented culture. Everyone from the founder to the executive, board chairs to employees, and volunteers have a clear sense of purpose.
They will understand how their roles fit within the organization's mission and contribute to the bigger picture.
2. Build a Dedicated Team
A nonprofit organization can range from a small, five to 10-person operation to a vast international body with hundreds of members extending mission reach globally.
Your focus should be on bringing on board members with a genuine interest and passion for your mission. Building a dedicated team means having members who are willing to go the extra mile to extend your nonprofit's impact. They foster a sense of cohesion and community, strengthening your organization's resilience and sustainability.
When it comes to creating a team, it's best to follow the nonprofit organizational structure. This will help you clearly define the roles and responsibilities you need to hire for at different levels to move your organization forward.
Each nonprofit may have a different organizational structure, but they all have three main bodies:
Governance
A nonprofit board of directors makes up the governing body of the organization. Each member has a financial, legal, and personal responsibility. IRS requires nonprofits to have a minimum of three board members. These are:
- Chair or President: Responsible for overseeing the work of the board and the organization's senior management.
- Secretary: Maintains board meeting minutes and monitors compliance with your nonprofit's bylaws.
- Treasurer: Tracks the nonprofit’s financial position, conducts annual audits, and serves as Chair of the Finance Committee.
Administration
Your nonprofit's administration includes people who run your programs and fundraising efforts. The principal role of the Executive Director in nonprofit administrations is to oversee all operations, management, and program staff.
The administrative team also includes Chiefs, Vice Presidents, Advocacy Directors, and other Director positions.
Programs
Everyone else working in your organization or directly with your nonprofit to achieve its mission is part of the program staff. They are mid-level management, volunteers, major gift officers, and individual contributors.
Fundraising, human resources, marketing, finance, and community relation staff will also fall under this section.
3. Know Your Donors
Donors are critical to achieving your nonprofit mission. They offer the essential support required to keep your organization afloat and achieve your fundraising goals. The most successful charities are donor-centric, understanding that donors are more than just their wallets. They are passionate people with a real interest in your mission.
When running a nonprofit, it's important to understand your ideal donor base. Find out what your donors care about, where their preferences lie, and how much they've given in the past.
With these insights, devise tailored campaigns and initiatives to build relationships with your donors and encourage them to contribute. Make your donors feel valued beyond their donations. Reach out more often than just to ask for solicitations.
Here are ways to build a bond with your donors:
- Host donor engagement events with the aim of only interacting and networking.
- Share surveys and polls to learn more about donors.
- Share monthly newsletters informing donors what your organization is up to.
- Send impact or annual reports to show donors what their donations have accomplished.
- Create a loyalty program with special perks and benefits available exclusively to them.
- Offer customized giving options.
4. Develop Good Governance and Leadership Policies
Establishing effective governance and leadership policies early on makes your nonprofit's operations more efficient, reliable, fair, and straightforward.
Governance covers everything from the financial viability of the nonprofit to fulfilling its mission. It keeps your organization in compliance with IRS laws and maintains its tax filing status for nonprofits.
It also ensures you have the strategic direction, adequate resources, and essential guidance to steer the nonprofit toward a sustainable future.
Some governance and leadership policies that nonprofits can adopt include the following:
- Ensuring that minute-taking of all boards and committee meetings is essential. Minutes are crucial for legal reasons. They help to improve the quality of discussions and increase accountability between meetings.
- Review your written policy annually and complete a questionnaire about conflicts of interest. Conduct an annual review to check for outdated governance and leadership policies.
- Create a succession plan to ensure the smooth functioning of your nonprofit in case of leadership changes. Document the process of replacing an outgoing board member with a quality candidate within the adequate timeline. The plan should also document board member terms, other responsibilities, and officer positions.
- An organization benefits best from a diverse group of leaders. Focus on creating a diverse board with more than a single background, as it will offer varied points of view and insights into your actions.some text
- Keep 1/3rd of board members with access to financial resources or who can bring in donations.
- Another 3rd should focus on expertise in finance, management, legal, and other aspects.
- The final 3rd should consist of individuals from the community with expertise and experience in the nonprofit's mission.
- Organize regular board assessments to learn how your board functions and what aspects need improvement. Part of the assessment should include reviewing the organization's strategic plans to see if it is still moving in the right direction.
5. Practice Prudent Financial Management
Nonprofits are accountable to the government, their donors, beneficiaries, and the public. They are required to disclose certain financial information to the public upon request.
Board members also must ensure that nonprofit assets are used in support of the mission and in accordance with donors' intent.
Prudent financial management comprises transparent reporting and responsible use of funds, which help maintain accountability and build trust in nonprofits. It also ensures adherence to legal and regulatory requirements governing tax-exempt 501 (c)(3) nonprofit organizations.
- Adopt a conflict-of-interest policy with a disclosure statement that all board members and staff will review annually.
- Document an executive compensation policy to make certain that the whole nonprofit board is aware of and approves the compensation of the executive director.
- Develop specific policies for how funds are used, expenses are handled, investments are made, and gift acceptance is handled.
- Be clear about the nonprofit's tax-exempt status on your website. Post financial information, such as the organization's recent IRS Form 990, reviewed or audited financial statements, and annual reports.
- Be transparent about how many board members your nonprofit has by listing their names and affiliations on its website.
6. Create a Diverse Funding Funnel
A nonprofit organization in one area is no different from a for-profit organization. Even though it focuses on social change and community development, it requires just as much funds as a company does.
Focus on multiple funding resources to maximize the impact of your mission and ensure smooth organization operations. Your fundraising strategy should be diverse, with dedicated plans in place for different funding avenues. If one avenue fails to generate the necessary funds, you have another to cover the cost of running your nonprofit.
Some common funding ways to secure donations are:
- Individual donations:
Of all the donations nonprofits receive, 80% comes from individual donors. They give offline or online through planned giving, auctions, events, and more.
- Grants:
Often considered the second largest source of funding, grants refer to financial donations given by private or public foundations, companies, or government agencies.
- Corporate sponsorships:
Corporate sponsorships are when a company supports nonprofits in exchange for certain perks, whether monetary or in-kind.
- Selling goods and services:
Nonprofits can create online stores to raise money by selling products and services related specifically to their mission.
- In-kind donation:
Non-monetary support nonprofits receive, such as food, clothing, medicine, catering for an event, or free advertising.
- Membership fees:
Individuals or organizations pay a certain fee to access a nonprofit's membership perks, such as free tickets to the event, specific recognition, or more.
7. Invest in an All-in-One Fundraising Platform
With 63% of donors preferring to give online, having a tool to collect donations online is essential.
With an all-in-one fundraising platform, your team will have a dedicated tool for online donations, planning end-to-end fundraising activities, managing interaction with donors, and much more—all through a single platform. There will be no need to invest in multiple solutions and pay a fee for each.
Zeffy is a 100% free fundraising platform with features and tools like:
- Donor management:
Securely hosts and properly segments donor data to engage in personalized communications and identify top donors.
- Online donation forms:
Creates customizable donation forms, accepts multiple payment methods, and generates and shares tax receipts with donors.
- Event ticketing:
Create and send unlimited scannable e-tickets to facilitate contactless check-in and check-out at your events.
- Peer-to-Peer Fundraising:
Enlist your donor and supporter network to raise funds for your cause by providing them with access to a free and easy-to-use peer-to-peer fundraising solution.
- Raffles and Lotteries:
Sell customized raffle tickets and keep track of offline and online sales through a unified platform.
5 Tips for Running Successful Nonprofit Board Meetings
Nonprofit board meetings are crucial for running a successful nonprofit organization. These meetings bring together the board members who help guide the nonprofit's direction.
During board meetings, key decisions are made about the nonprofit's strategies, programs, fundraising efforts, and financial management. Engaged and committed board members are critical at these meetings.
Their input, oversight, and collective expertise ensure the nonprofit stays true to its mission while operating efficiently and effectively. Regular, productive board meetings allow nonprofits to tackle challenges, capitalize on opportunities, and maximize their impact in the community they serve.
While there are no specific rules related to board meetings, here are certain tips for running a successful nonprofit board meeting.
1. Prepare and Send Out the Meeting Agenda Early
A well-defined board meeting agenda maintains the meeting's direction and ensures that discussions are relevant and productive. Prepare your meeting’s agenda at least a month before it's due to sit. Send this to all board and staff members who will attend at least seven days before.
Include specific topics to be discussed, specify the time limit for each, and any resources and materials necessary according to the discussion topics. For instance, if you're going to discuss the budget, add a copy of it and other financial statements and reports.
Ensure the meeting agenda is detailed and clear, and remember to leave time at the end of the meeting to discuss any new opportunity that's not present on the agenda.
2. Get a Good Nonprofit Board Chair
While an agenda is essential to your board meeting, you will need a good board chair to ensure it is conducted systematically. They will preside over the board meetings and gently steer discussions. Their task is to ensure everyone gets a chance to put forward their opinion on the agenda items.
A good board chair is a professional with essential knowledge and understanding of your governance policies. They need to understand your industry and operations. The chair should also have good social and organizational skills.
3. Take Board Meeting Minutes
Appoint a skilled note-taker to jot down essential discussion points, decisions made, and action items during the meeting. Accurate and detailed minutes offer an official record of the meeting that's not only important for legal reasons but also helps to:
- Offer transparency in decision-making.
- Update members who are unable to attend.
- Confirm which person will complete which action item.
- Serve as a reference for the next nonprofit board meeting.
Make sure that you distribute the minutes to all participants within 24 hours after each board meeting. This will ensure that the information is fresh and solidified in members' minds. When writing the meeting minutes, stick to the given practices:
- Record participants as soon as they enter the room.
- Record notes or actions on the action items as soon as they occur.
- Don't go into too much detail; focus only on the decisions and not the discussions.
- Highlight strategic action plans and who is responsible for them.
- Use a recording device to create a backup for the meeting minutes.
4. Focus on Making Decisions and Not on Updates
The nonprofit board meets to make decisions and discuss future courses of action for your organization. You must keep this in mind and don't let the meeting get carried away with updates and staff reports (except for the essential ones).
If too much information is shared during the board meetings, it leaves little time to discuss important matters and make important decisions.
To avoid this situation, take printouts of your agenda report and prepare meeting packets. With each member having an agenda, the discussion won't drift away from the main topics. Let the members take the packets to explore the topics being discussed in detail.
5. Start and End Meeting on Time
Punctuality is essential to show respect for everyone's time, especially considering nonprofit board members with tight schedules of their own commitments. Starting and ending the meeting on time helps maintain professionalism and decorum.
Limit the length of the board meeting to two hours or less by defining a specific time limit against each agenda. If it's by chance, more than two hours, think about adding a short break and serving refreshments.
Final Thoughts on Running a Nonprofit
Running a successful nonprofit requires a strategic approach that combines clear vision, dedicated leadership, and effective resource management. By implementing the 7 key strategies outlined in this guide, you'll be well-equipped to navigate the challenges and opportunities that lie ahead.
Remember, the path to nonprofit success is an ongoing journey of learning and adaptation. As you continue to refine your strategies and embrace new tools and resources, you'll be better positioned to maximize your impact and create lasting change in the lives of those you serve.
Zeffy, a 100% free fundraising platform, empowers you to streamline your operations, engage donors more effectively, and amplify your mission like never before. Unlock your nonprofit's full potential with Zeffy today.
FAQs on How to Run a Nonprofit
How do board members of nonprofits get paid?
Nonprofit board members can receive paid compensation for their work as long as it's within a reasonable amount. No federal or state law forbids it, but states may have certain rules regulating it.
Usually, board members are compensated by being reimbursed for expenses incurred while performing their duties. This kind of pay involves travel expenses, lodging for meetings, and other standard costs members might pay out of their pocket to fulfill their duties.
How do you structure a nonprofit board?
When it comes to structuring the nonprofit board, the three-committee model is rising in popularity because it has a simple structure and organizes all important committees. It also demands less time from board members and leaves room open for them to focus on tasks other than logistics.
Here are the committees that make up the three-part structure:
- Governance Committee: Recruits new members for nonprofit boards and evaluates their performance. It oversees and governs various board activities.
- Internal Affairs Committee: Responsible for the finances of the nonprofit organization, including capital acquisitions, budget review, personnel, and other related activities.
- External Affairs Committee: Manages all external responsibilities of the organization, including marketing, communications, and PR.
What makes a successful board meeting?
A successful nonprofit board meeting results in clear and timely decisions and action items. It requires active participation and engagement from all board members.
Here are some ways through which you can effectively ensure the meeting's success.
- Prepare the agenda for the meeting in advance using the previous board meeting.
- Share the agenda items beforehand with board members and leaders.
- Start and end your board meeting on time and keep the duration less than two hours.
- Give every member a chance to put forward their thoughts and opinions.
- Record nonprofit board meeting minutes and conduct frequent post-meeting feedback.
What are the operating costs for nonprofits?
The funds a nonprofit organization spends on rent, employee salaries, transportation, cleaning services, office supplies and equipment, and other utilities are referred to as “operating expenses.” They are reported annually and made public so that donors, supporters, and the IRS can track nonprofit spending.
The Better Business Bureau states that no more than 35% of a nonprofit budget should be spent on operating expenses.
How often does a nonprofit board have to meet?
Executives and presidents decide the frequency of nonprofit board meetings, but nonprofit boards meet monthly or quarterly.
The frequency of the meetings allows each board member to decide on the same regular date and time, enabling board members to focus on high-level strategy. It would be difficult to make decisions if you meet after a quarter as most of the time will go into providing updates and recaps, and no board meeting agenda could be discussed.
