By Ruth Sigei, Director of Financial Reporting, National Human Services Assembly
Let’s face it, running a nonprofit takes money. Sometimes a lot of it.
Obvious point, you say. For most nonprofits budget cuts are painful, especially when they involve personnel or facilities, two of the most critical components of service delivery.
Let’s focus on where nonprofit leaders can effectively lower costs without harming the organization’s mission or programs.
Where can we possibly save money?
The opportunity for savings lies with other expenses that are simply the cost of doing business. It’s the purchasing of goods, services, and supplies needed to deliver on your mission and programs. It can be shipping, office supplies, telecom, travel, promotional products, credit card processing fees, copying and printing, IT equipment or support, facility or food products and services, unemployment and board liability insurance, and so much more.
All of these smaller expenses can add up to serious spending over the course of a year.
What’s the solution?
Increasingly, the solution for many nonprofits is access to a group purchasing organization (GPO) that uses the collective purchasing volume of its participating members to negotiate discounted pricing on the products and services they use in daily operations. The result can be savings of 30% or more, which equates to big savings on the bottom line for nonprofits. With this level of savings, National Human Services Assembly’s PurchasingPoint program has saved nonprofits an estimated $140 million, money that has been redirected toward the mission-related activities that build well-being within our communities!
The reality is that it is more cost effective to save money on purchases than it is to fundraise the same dollars from scratch.
Often, for many organizations, the opportunity to save money goes unnoticed or is underutilized. Nonprofit spending continues to increase at a time when donors and grantees are reluctant to fund overhead and expenses are being more heavily scrutinized by the day.
It’s time for us to do something about it!
We believe nonprofit managers will increasingly embrace group purchasing as a way to cut the costs of operating nonprofits while preserving funds for the mission. As leaders in the nonprofit world, we have a fiduciary responsibility to ensure our organizations run both effectively and efficiently.
If all this sounds easy, it is!
The great news is that as a Trust member, you already get FREE access to PurchasingPoint, a group purchasing program specifically designed for nonprofits with over 200 vendors available and an average savings of 30%. To learn more about the 501(c) Agencies Trust PurchasingPoint program, visit the portal or contact Sonya Llewellyn, Associate Director – HR Services, at sllewellyn@501c.com or 800.442.4867 x172.
Resources
Download the slides from our most recent webinar about the benefits of PurchasingPoint and watch the presentation here.
