Construction/Real Estate
6 Ways to Contain Costs as a Nonprofit in 2025
6 Ways to Contain Costs as a Nonprofit in 2025
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Nonprofit organizations are under a great deal of pressure to make a large impact, often with very limited funds.
For nonprofit decision-makers looking to maximize their impact in 2025, finding creative ways to contain costs is one of the most important goals to focus on. Specifically, cost containment measures can help to keep spending and expenses under control while continuing to pursue the end mission and objectives of the organization.
The Importance of Cost Containment in 2025 and Beyond
There are many reasons to make cost containment part of your nonprofit's strategy in 2025. Specifically, the right cost containment techniques can help your organization achieve a greater sense of financial stability while increasing the potential impact of the organization at the same time. In many ways, cost containment efforts can also contribute to greater efficiency by reducing waste while fueling organizations to operate more sustainably.
Best Practices for Containing Costs as a Nonprofit
So, what are some steps nonprofit decision-makers can take in 2025 and beyond to better contain costs? Here are a few tips and best practices to help your team get started.
1. Renegotiate Contracts Regularly
When was the last time you reviewed your vendor contracts and explored more cost-effective options? If it's been more than a year, now is a great time to sit down and review your contracts with vendors and other businesses. A little negotiation can go a long way in reducing expenses — and you might even be able to eliminate some services or subscriptions altogether.
2. Recruit and Utilize Volunteers
Many nonprofits rely heavily on volunteers to carry out the brunt of their “everyday” work. As a cost-saving measure in 2025, consider expanding upon your volunteer base and/or asking volunteers to tackle more tasks that don't require any particularly specialized skills. This can be a great way to free up valuable time for your paid staff while getting your volunteers more involved in your organization.
3. Reevaluate Programs for Cost Effectiveness
At least once per year, it's also a good idea to sit down with your stakeholders and decision-makers to reevaluate your organization's individual programs for effectiveness. While it's never fun to cut programs, sometimes this does need to be done for the long-term sustainability and growth of the nonprofit and its mission.
4. Focus on Streamlining Operations
Does your organization have a waste reduction strategy? The Lean Six Sigma methodology, for example, is especially useful in cutting back on waste while maximizing operational efficiency. And while it's most often used in industries like manufacturing and construction, it can be just as effective in a nonprofit.
5. Use Technology to Your Advantage
These days, there are so many different technologies and tools on the market that can help your organization maximize its efficiency while automating tasks and optimizing budgets. Many nonprofits, for instance, find success implementing cloud-based platforms to cut down on on-site IT costs while keeping things running more smoothly.
Take some time to review the technologies and tools that are available to organizations in your industry, and consider which ones might be worth investing in. You might be surprised at how much of a difference the right technology (including AI-based software for automation) can make in your organization's cost-effectiveness.
6. Share Resources with Other Organizations
Another option to consider when it comes to cost containment for nonprofits is to collaborate and pool resources with other organizations or businesses. For example, rather than spending the money to rent out an entire commercial space for your organization, you might share the space (and the expenses) with another company. This can be a great way to cut down on the costs of everyday operations and services without making major sacrifices in the process.
The Bottom Line on Cost Containment
Implementing cost containment strategies can be an excellent way for nonprofits to streamline operations, optimize efficiency and save money in the process. As you explore these cost-saving options, you'll want to consult with key stakeholders and decision-makers to determine which options may be worth implementing for your organization. From there, you should also take care to review and reassess the results of your efforts so you can make further changes as needed.
With the right cost-containment strategies in place, nonprofits across all industries can make the most of the resources and funding available to them. This, in turn, can empower them to make a greater difference.
To learn more about LGT and how we can serve you, contact us here.
Justin Lewis, CPA
Upon joining LGT, Justin quickly established himself as a leader, demonstrating his passion in the assurance services department. As a managing auditor, Justin oversees the work performed by professional staff and serves as the primary link between the professional staff, principal, partner, and the client. He has a comprehensive knowledge of Generally Accepted Accounting Principles (GAAP) financial statements as well as a thorough understanding of audit practices in accordance with Generally Accepted Auditing Standards (GAAS). Justin works with audit teams through planning, management, and the success of engagements. He also continues to garner experience in single audit compliance through performing audits of NFPs under OMB requirements, along with consulting with NFPs to ensure compliance with federal regulations and audit readiness. Justin specializes his knowledge and efforts within our not-for-profit, construction, single audit, and employee benefit plan niche-focused areas. He also consults with clients on internal controls emphasizing efficiency and productivity.
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