Spend Wisely: How to Set Up a Nonprofit on a Budget

Ryan Jones • Jan 20, 2021
Set up a Nonprofit on a Budget

Starting a nonprofit organization with a flush bank account or a group of committed financial backers is a snap. File some paperwork, come up with a logo, write fundraising emails, and bam, you’re ready to start saving the world. If only it were that easy all the time. 

The reality is that most folks in the nonprofit sector don’t start with deep pockets—roughly two-thirds of nonprofits in the U.S. are considered small. So if you’re reading this, chances are your financial resources are limited, or in some cases, almost nonexistent.

Assuming you have a minimal amount of money to spend on getting started, say, $10,000 or less, what’s the best way to spend it to get the most bang for your buck? A super tight budget can feel overwhelming: is it better to spend it all on staff, on technology, spread it around in drips, throw a lavish launch party with Beluga caviar, toast points, and magnums of Dom Perignon ‘55 (or ‘53 if you prefer)?

Save the fish eggs for when you solve world hunger. For now, take our advice and invest your small nest egg in some or all of the following attainable yet extremely helpful resources when you’re just getting started.

A note before you jump in: If you have not yet applied for nonprofit or charity tax-exempt status, you’ll want to get this done before you start soliciting donations. For a push in the right direction, here are a few resources that can help:

Another note before you get too excited: If you have received your nonprofit status approval but you have no funds to work with, grants can be a great way to get the ball rolling. Our grant preparation toolkit can guide you as you write your grant applications. 

Need Help Getting Started On Your Grant Application?

With this toolkit, you can map out your funding needs, organize your application and write a compelling proposal

How to Make The Most of Your First Nonprofit Budget

You know your organization best, so it’s up to you to decide which of these areas is the ideal place for your investment, based on your organization’s mission, the resources you currently have access to, and any tools or talents that may be missing.

That said, the first item on this list is the closest thing to non-negotiable that we’ll discuss in this post. The numbers just don’t lie.

1. Bookkeeping and Accounting 

The single most important thing you can do at the outset of your nonprofit adventure is to make sure your financial situation is as clear as day. Whether you’re using your funding to hire a bookkeeper, doing it yourself using a piece of intuitive software, or outsourcing the job to a service, accounting is essential to understanding your current and future positions.

Solid accounting practices don’t just keep your bills paid, your staff compensated, and your receipts organized. Accounting can also help you set fundraising goals, determine amounts to ask major donors, and build reliable and informative annual reports that will help you prove your organization’s value in years to come.

Above all else, a trustworthy accountant acts as a neutral party that can supply quantifiable information to help you make better decisions. So when you get all excited about attending that beachside fundraising conference, there will be someone to tell you why you need to put that credit card back in your wallet and close the Hawaiian Airlines tab on your laptop.

2. Website

Gone are the days of telling people about your organization by telephone or hassling passersby on the street while stuffing pamphlets into their hands. The first place potential donors go in the 21st century is your website. Whether they’re visiting to learn more, looking for a volunteer opportunity, or donating to your cause, your website needs to be ready to deliver the info understandably and engagingly.

If you don’t have a web presence at all, Unbounce is a great place to start. Their simple landing page builder can get your brand and mission statement online quickly and easily, without having to take a big chunk of your money to pay a developer. Combine that page with a donation form from Keela and you’ll be up and running in no time.

If you already have a website, or if you want to start with a full site rather than just a landing page, check out this comprehensive post on what to include on your website. If you feel confident in your skills, go ahead and build it yourself. If not, consider contacting an expert to build your website rather than hiring someone full time; remember, salaries can be expensive and ongoing.

3. Customer Relationship Management

One of the hardest things about running a nonprofit is organization. Keeping all of your ducks in a row, from donor data to staff communications, can be a daunting task. Luckily, there is specific software designed for just this task. 

Customer Relationship Management (CRM) software helps you track all of your organization’s relevant information in one spot, allowing you to manage contacts, identify opportunities, and build better relationships.

Small nonprofits may be interested in Keela Starter, a free, streamlined version of our CRM that can help you get moving. For larger organizations, or if you feel ready to jump in with both feet, check out our roundup of nonprofit CRMs to see which one is right for you. Of course, we recommend Keela because of its industry-leading Artificial Intelligence tools—consider booking a demo today.

Choose a CRM That Works For Your Nonprofit

This comprehensive guide will help you evaluate your needs and shortlist CRM vendors so you can invest in the right tool for your organization. 

4. Technology

It is beneficial for many nonprofit organizations to spend a little money to save a lot of time. The best way to make that happen is with some well-placed technology. We recommend doing a technology assessment to determine which tasks need to get done, which ones can be automated, and how much it might cost to achieve.

Luckily, these assessments are free. And even luckier, a lot of time-saving tools are also free. If you find that you have to spend money on software, be sure to calculate how much of your time you’ll free up for more important things.

5. Training and Development

If you are at the inception of your organization, consider building a foundation of knowledge for you and your staff by investing in training and development. Depending on your nonprofit, it may be worth your time and money to work with a consultant who understands nonprofit startups to learn more about best practices for nonprofit management, fundraising, communications, and more.

While you’re waiting for that first development consultant meeting, why not brush up on fundraising trends and tactics? They’re super helpful and free.

6. Team Hires

The knee jerk reaction to receiving a grant or a small amount of startup money is to hire staff. But to get good people, you need to pay competitive salaries, and those salaries are ongoing year-after-year, whereas your grant may not be. So when deciding whether to hire for a role, consider the human resources you already have in place, what can be automated, and what can be outsourced. Whatever tasks are left may be ideal for a full- or part-time hire. 

Typical early-stage roles include:

  • Communications/Marketing
  • Fundraising Consultant or Executive Director
  • Development
  • Grant Writer
  • Fundraiser

Take the time to familiarize yourself with salary trends, so you know what you’re getting yourself into before you start collecting resumes.

How Much Should You Pay Your Nonprofit Staff?

With this guide, you can compare salaries in the nonprofit sector, read job descriptions and make better hiring decisions.

Looking Ahead

Whatever you decide to spend your money on, try to think about it as an investment in your future. Keep a long-term mindset, and you’ll make better decisions that help you make more money, which lets you invest more in your organization, make more money, and so on — like a snowball becoming an avalanche, or a runaway train, or even a more positive metaphor.

Grant Preparation Toolkit

This toolkit will help you familiarize yourself with the grant markers

 and organize the “story arc” of your grant application.