8 Tips for Every Nonprofit Battling Inflation

Beginner, Fundraising, Leadership

By Jeremy Reis

Economic recessions are never easy, but they can be especially tough on nonprofits. This is because, during a recession, people are less likely to donate money to charitable causes. Nonprofits also have to contend with increased competition for grants from both private foundations and the government.

As if that wasn’t enough, nonprofits also have to deal with the effects of inflation. While inflation is generally bad for businesses, it can be especially devastating for nonprofits. This is because nonprofits rely heavily on donations and grants, which usually don’t keep pace with inflation. As a result, nonprofits can find themselves lagging behind their counterparts in the business world.

Fortunately, there are steps that nonprofit leaders can take to prepare for the future during times of inflation. By taking a long-term view and planning ahead, nonprofits can weather even the most severe economic downturns.

1. Review your budget regularly and make adjustments as needed.

The first step is to stay on top of your budget and be mindful of how much money is coming in and going out. As the prices of goods and services increase, you’ll need to adjust your budget accordingly so that you don’t find yourself underfunded at the end of the year.

The next step is to assess the impact that inflation is having—or is likely to have—on your nonprofit. This will help you determine which areas of your organization are most vulnerable to increases in costs. Once you’ve identified these areas, you can start looking for ways to offset the impact of inflation. For example, if you know that your utility bills are going to go up, you might look into energy-saving measures that will help reduce your overall costs.

If staff salaries make up a large portion of your budget, you might explore ways to increase revenue so that you can cover salary increases without cutting programs or reducing staff levels. Alternatively, you might decide to focus on fundraising efforts that will help supplement staff salaries. Either way, it’s important to have a clear understanding of how inflation is impacting your nonprofit so that you can develop a strategic plan to offset those impacts.

Last but not least, don’t forget about reserves! Having a rainy day fund is essential for any organization, but it becomes even more important during times of economic uncertainty. When inflation is on the rise, make sure you are setting aside enough money each month to cover unexpected expenses so that you don’t have to dip into other areas of your budget (or worse, go into debt).

2. Diversify your funding sources.

There are many benefits to diversifying your nonprofit’s funding sources. One of the most important is that it can help insulate your organization from economic fluctuations. For example, if government funding decreases during a recession, you may be able to make up the difference with increased individual giving or earned income. Additionally, diversifying your funding sources can help you tap into new pools of potential donors and supporters. Finally, having a diversity of funding sources can also make your nonprofit more attractive to grantmakers and other funders.

There are many ways to diversify your nonprofit’s funding sources. One option is to increase your government funding by applying for more grants or partnering with local representatives. Another possibility is to expand your fundraising efforts by reaching out to major donors or implementing a planned giving program. You might also want to consider increasing your earned income by partnering with businesses or charging fees for services. By taking a proactive approach, you can ensure that your nonprofit is prepared for any economic downturn.

Most corporations have philanthropic arms that provide grants to nonprofit organizations. While competition for these grants can be fierce, it’s worth the effort to research which corporations might be a good fit for your nonprofit and its mission.

Local, state, and federal government agencies often provide funding for nonprofits that align with their goals and objectives. This funding can be in the form of grants or contracts, so it’s important to research which agencies might be a good fit for your nonprofit.

3. Advocate for your cause.

In order to secure funding and keep your programs running, it is important to advocate for your cause. Make sure you are reaching out to the right people and letting them know what your nonprofit does and why it is important. Keep in mind that there may be other organizations competing for the same funds, so it is important to make a strong case for why your nonprofit should receive them.

It was a tense time in the state government. Budgets were being slashed and services were being cut left and right. But one nonprofit organization decided to take a stand. They began advocating with their state government to increase funding in their sector instead of decreasing it. The need for services is so great in a time of economic decline, they argued.

It was an uphill battle, but eventually they won over some key decision makers. Funding was increased – just enough to make a difference. And the organization could continue providing vital services to those who needed them most.

4. Keep overhead costs low.

During times of inflation, it’s more important than ever to keep overhead costs low. This means being mindful about what expenses are absolutely essential and finding ways to cut costs where possible. For example, if you’re looking for office space, see if you can share with another nonprofit or look for cheaper options outside of downtown.

One of the most important things you can do as a nonprofit leader is to manage your cash flow wisely. This means understanding where your money is coming from and where it is going. It also means being mindful of how changes in the economy—such as inflation—can impact your cash flow. For example, if you typically receive funding from government grants, you will want to be aware of how budgetary decisions at the state or federal level can affect your organization’s bottom line.

In times of economic uncertainty, it is more important than ever to make efficiency a priority. This means finding ways to do more with less and maximizing the impact of every dollar you spend. One way to do this is by investing in technology that can help you work smarter and faster. For example, project management software can help you keep track of progress on multiple projects at once so that you can make sure each one stays on budget and on schedule.

5. Reduce travel costs.

One nonprofit organization had to make some tough decisions in order to reduce costs during the economic downturn. One of the biggest changes they made was eliminating 25% of their travel budget. This meant that staff would have to hold more virtual meetings and travel only when it was absolutely necessary. With the experience of learning how to work remotely from the past several years, staff quickly adapted to the new normal for travel.

Travel costs can be a major drain on nonprofit resources, especially as inflationary pressures continue to rise. But there are ways to battle the effects of inflation by reducing travel costs without sacrificing quality or effectiveness.

Tip #1: Get creative with your destination.

When choosing a destination for your next meeting or retreat, think outside the traditional conference center or hotel ballroom. There are a number of nontraditional venues that can offer significant cost savings, such as university campuses, public parks, and even private homes.

Tip #2: Take advantage of technology.

With advances in video conferencing and other forms of digital communication, there’s no need to travel for every meeting. If possible, use technology to connect with remote participants instead of incurring the expense (and carbon footprint) of travel.

Tip #3: Use social media to connect with local leaders.

Social media platforms like Twitter and LinkedIn are great ways to connect with local leaders in your field without incurring the costs of travel. You can also use social media to gather intel on cost-effective travel options in your chosen destination.

Tip #4: Negotiate airfare rates.

If your organization books airfare regularly, see if you can negotiate a discounted rate with your chosen airline. This is especially effective if you’re booking travel for a large group of people. You may also be able to get discounts on car rentals and hotels if you bundle them with your airfare purchase.

6. Invest in technology.

In many cases, technology can help nonprofits become more efficient and save money in the long run. By automating processes and taking advantage of online tools, you can free up staff time for more important tasks.

Investing in technology can help nonprofits battle Inflation in two key ways: first, by increasing efficiency and reducing costs; and second, by growing revenue.

Let’s start with cost savings. Technology investments can help reduce the costs of doing business in a variety of ways. For example, investing in cloud-based software can help reduce the need for expensive on-premises hardware and IT infrastructure. And adopting a paperless office workflow can help slash paper, printing, and storage costs.

But cost savings are just one side of the coin. Technology investments can also help increase revenue by opening up new channels for growth. For example, developing a mobile app can help you reach new donors who are looking to support causes they care about on their smartphones. And adding online donation capabilities to your website can make it easier for donors to give—which can lead to more donations overall.

Of course, making technology investments is only half the battle—you also need to make sure those investments are paying off. That’s why it’s so important to track key performance indicators (KPIs) like cost savings, donor acquisition rates, and donation amounts before and after making a tech investment. Doing so will help you measure your progress and ensure that your technology investments are helping you achieve your goals.

Tip #1: Use automation tools to increase efficiency and lower costs.

There are a ton of different automation tools available these days, from customer relationship management (CRM) software to project management software. By investing in some of these tools, you can help your team work more efficiently and lower your overall costs. In turn, this will help you save money and keep up with inflation.

Tip #2: Go paperless whenever possible.

Another way to use technology to battle inflation is by going paperless whenever possible. Not only is this good for the environment, but it can also help you save money on things like paper and ink cartridges. In addition, paperless processes tend to be more efficient than their analog counterparts, which can free up time and resources that can be better spent elsewhere.

Tip #3: Invest in cloud-based solutions.

Cloud-based solutions are becoming increasingly popular these days—and for good reason! Not only are they typically more affordable than traditional solutions, but they’re also more scalable and easier to manage. This means that they can grow with your organization as your needs change over time—without breaking the bank.

7. Streamline your operations.

Every organization—no matter what sector it belongs to—is always looking for ways to optimize efficiency and cut costs. This is especially true for nonprofits during an economic downturn, which are under constant pressure to do more with less.

Evaluate your process regularly: Set aside time each month, quarter, or year to reflect on your process. What’s working? What’s not working? Are there any bottlenecks? Any redundancies? Make changes accordingly.

Foster a culture of transparency and accountability: Encourage open communication throughout all levels of the organization. Implement feedback loops so employees can provide input on process improvements. Celebrate successes and learn from failures together.

Communicate, communicate, communicate!: This cannot be stressed enough. Good communication is key to a successful operation. Keep lines of communication open between staff, volunteers, Board members, donors, etc. Use multiple channels (email, telephone, face-to-face meetings, video conferencing, social media, etc.) to reach different groups of people. And always remember to listen!

During the last economic decline, the leadership team at Food for the Hungry held several townhall meetings to keep all staff informed about our financial condition. With this kind of transparency, people began looking for ways to become more efficient to save money and jobs. Your staff appreciate your honesty and transparency when times get tough.

8. Plan for the future.

Finally, it’s important to remember that periods of inflation are usually followed by periods of recession. So while it’s important to focus on the here and now, don’t forget to plan for the future as well. This means having enough cash reserves on hand to weather any potential economic downturns.

Once you’ve assessed the impact of inflation on your nonprofit, the final step is to develop a long-term strategy for dealing with it. This strategy should take into account both the short-term and long-term effects of inflation. In the short term, you’ll need to find ways to offset increases in costs so that they don’t eat into your operating budget. In the long term, you’ll need to consider how inflation will impact your fundraising efforts and donor base.

For example, if you know that costs are going to go up but donors aren’t likely to give more money, you might need to focus on diversifying your funding sources. This could involve looking into grants or government funding opportunities. Alternatively, you might need to reconsider your program offerings and make adjustments so that they’re more cost-effective. Whatever strategy you decide on, make sure it’s one that you can stick with in the long term.

Inflation can present challenges for nonprofits because their funding streams may not increase at the same rate as their operational costs. As a result, it’s important for nonprofits to be strategic about how they plan for the future during periods of inflation. By taking the time to assess the impact of inflation on their organization and developing a long-term strategy for dealing with it, nonprofits can ensure that they’re able to weather any economic storms that come their way.


Inflation can be a challenging thing for nonprofits to navigate, but by following these tips , you can make sure your organization stays afloat . Reviewing your budget regularly , diversifying funding sources , advocating for your cause , keeping overhead costs low , and planning for the future will all help ensure that your nonprofit continues its vital work despite any challenges that come its way .


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