Strategic Planning for Nonprofits to Find Extra Funds

When it comes to strategic planning for nonprofits, finding extra funds to further the cause is always top of mind. For nonprofit organization management, one of the best, and simplest, ways to accomplish this is by evolving the existing relationships with suppliers. Instead of viewing suppliers as vendors think of them as partners. This allows you to leverage the supplier relationships to lower your operating expenses and streamline your operations, which can result in cost savings, sometimes up to 20% or more. 

Cost Reduction Strategies for Nonprofits

Meet with Your Account Representative Regularly

It’s important that A) you have a relationship with your account representative and B) you meet with them regularly. The size of your annual spend should determine how often that meeting takes place: every three months, six months, or yearly. Discuss what you can do to maximize your savings and help streamline their operation. Additionally, ask what you can do to help reduce their costs, i.e. less frequent deliveries, that will result in lower costs to you. Talk about changes in the industry, new products or services that could help you contain or reduce your costs.  

Overall Pricing

When reviewing pricing, always be in the know of price discounts. [What does the prior sentence mean?] Does how much you spend directly effect your price? As your spend goes up, do your discounts go up? Are you eligible for additional rebates? There are also GPOs (Group Purchasing Organization) that may be available to your organization to help in reducing certain costs, are you taking advantage of them.. Are you consolidating your spend as much as possible.  Fewer suppliers means less administrative overhead and puts you in a stronger position on price negotiations. 

Contract List

When it comes to purchasing routine  commodities, such as office, cleaning, break room and medical supplies, your organization should always aim to purchase between 70-80% from the “contract” list, which is a specially negotiated list of items with your supplier and will represent your best pricing. This list should be updated on a regular basis. 

Unusual Needs

Always pursue the best price with the help of your account representative. If you plan on buying new office furniture, or new office technology, let your representative be a part of the search to help with cost control. There may be a better discount out there than the one you get with your standard discount for a large purchase!

Maximize the Supplier’s Technology

Suppliers are always upgrading their technology platforms and processes and you should take full advantage of them to streamline ordering and get the management reports that will help you manage the spend. One example is actionable management reporting, which allows you to know which individuals are achieving on-contract spending goals and which ones are not. This will help you discover and even more important question, why? 

Competition, Competition, Competition

Every three-to-five years, your procurement manager, or whomever handles the procurement function, should solicit bids for your business. This is a good practice for all organizations and will allow you to ensure you are getting the best products and services at a competitive price. 

By adhering to these best practices, you will experience lower costs from your suppliers and see your operational cash flow increase. Nonprofits are a business of their own and any extra money can go a long way in making a difference in someone’s life. Be sure you’re doing all you can to make the most impact!  Most importantly, work with you suppliers, make them part of your team.

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