When you hear the words “not for profit”, you might think that the organization would not be interested in money. In fact, there is a big difference between turning a profit and having a large revenue. Pretty much every organization needs money to be able to run and to be able to achieve its goals. Many non-profit organizations do this either by fundraising or charging small amounts for their services which might often cost a lot less than if you were to use a private company. Another major way of making money is of course to invest the money they have already received, but very few non-profit organizations take this opportunity to make a large sum of money. With this in mind, here are some of the steps non-profits can take to make a lot more money from value investments.
Know how much you have to spare
When you run a non-profit organization, every single dollar counts. It is
highly likely that as soon as money comes in, it is allocated to a particular
project or service almost immediately. That is why it is so important to have a
good bookkeeping system to identify what money is needed immediately and how
much money can be invested to be used at a later date. If you are not
interested in turning a profit, you might think it is not as important to keep
track of your money. In fact, it can be much more important as it is highly
likely that you are working on much narrower margins than a bigger business.
The best way to keep track of this money is to outsource this job to somebody
who specializes in bookkeeping for nonprofits and knows
the best way to look after your organization’s finances. It is important that
you entrust this important job to someone who is an expert in this field,
rather than someone who treats it as a hobby with a minimal understanding of
the problems involved. This is the only way you can be confident that your
organization can spare the money you put into any lucrative investment until it
pays out.
Gain permission from the team
Not-for-profit organizations often run differently from other businesses.
In a normal business, there is normally one person in charge of the whole
company who makes all of the big decisions. In a non-profit organization, it is
highly likely that there is a board of people who are
responsible for making these important decisions. Before you make any
investment, make sure you have the full permission and support of the board. It
might be necessary for the board to vote on the decision during a committee
meeting to formally give permission for any investment.
Make sure you can cash out when
you need the money
It is important that all organizations keep a lump of money to one side away from
the day to day running of the group, in case they have a sudden downturn in
money coming in or need to pay for an unexpected large expense. That is why it
is important that you make sure you invest your money somewhere where you would
be able to access it again at short notice. Avoid investing in saving schemes
where you are forced to not touch your money for a set period of time.
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