It has been an unpredictable few months across several industries, and many nonprofits are finding themselves in increasingly tight financial positions. Whether it’s due to shifting grant cycles, increased competition for resources, market volatility, or reduced donor (or member) engagement, funding crunches are becoming more common. But financial strain doesn’t have to spell disaster. With proactive planning and thoughtful cost-saving measures, nonprofits can weather the storm while continuing to serve their communities.

 

Here are some practical areas where we’ve seen nonprofits reduce costs without sacrificing mission or impact.

 

1. Audit and Prioritize Core Activities

We recommend you start by taking a comprehensive look at your operations. Define which programs are central to your mission and deliver the greatest impact.  It may seem simple, but focus your resources there. Consider pausing, scaling back, or restructuring initiatives that are mission-adjacent or not yielding meaningful returns.

As accountants, and more importantly, as CAS accountants, we believe the most effective decisions are driven by data. Impact metrics and program evaluations can provide clarity and justification when tough calls have to be made.

 

2. Reassess Fixed and Variable Expenses

It’s easy to overlook recurring costs when you’re in the thick of day-to-day operations. Take the time to review your monthly expenses with fresh eyes. Are there recurring costs that can be renegotiated or eliminated?

• Office space: Can you downsize, sublet (see point #3), or shift to a remote or hybrid model? We’ve seen many nonprofits significantly reduce overhead with flexible work arrangements.
• Subscriptions and software: Audit digital tools regularly. Many nonprofits pay for services that are rarely used or even forgotten.
• Printing and mail: If you haven’t already, move to a digital-first model. Moving more communications online can lower both materials and postage costs.
• Ask for discounts: Don’t hesitate to reach out to vendors about nonprofit pricing. In our experience, many are willing to accommodate modest price reductions, especially during tough times and when you have a longstanding relationship.

 

3. Generate Revenue by Renting Out Space

If you have office space, meeting rooms, or event areas sitting empty, consider renting them out. Even with potential Unrelated Business Income Tax (UBIT) implications, making 79 cents on the dollar is still far better than zero.

Be transparent with your board and your accountants about any UBIT implications. With proper planning, it’s a manageable and worthwhile tradeoff for recurring income.

 

4. Collaborate and Share Resources

Work with your peer organizations to build economies of scale. Nonprofits can create efficiencies by sharing office space, administrative functions (HR, IT, accounting), or even co-hosting events.

We’ve seen great success when organizations pool resources, particularly through local nonprofit associations or informal partnerships. If you’re part of a local nonprofit network or association, explore whether there are shared services already in place or opportunities to build new ones.

 

5. Lean Into Volunteers and Interns

A well-run volunteer or internship program can be a game-changer for organizations operating tight budgets. Volunteers can help with outreach, administrative tasks, events, and more. Similarly, we’ve seen partnerships with universities often yield eager, capable interns looking to contribute.

That said, it’s important to place volunteers in roles where they can truly add value without requiring time-consuming supervision. In our experience, the best outcomes come when expectations are clear and volunteers are treated as integral parts of the team, not just extra hands.

 

6. Outsource Strategically

When done right, outsourcing can be a major cost-saver. Nonprofits don’t need to do everything in-house to do it well. Rather than maintaining full-time staff for every function, nonprofits can contract out specific tasks or departments, especially those that are specialized, seasonal, or outside your core competencies.

Typical areas include:

• Accounting and bookkeeping
• IT and tech support
• Marketing and design
• Grant writing and reporting
• HR and payroll

Done right, outsourcing provides access to skilled professionals at a lower cost than hiring full-time. And it allows your internal team to stay lean and focused on mission-critical work.

 

Interested in Outsourcing?

Wegner CPAs offers outsourced accounting services designed specifically for nonprofits. We help organizations streamline financial operations, maintain compliance, and make informed decisions without the burden of expanding internal teams.

 

7. Communicate Transparently with Stakeholders

Funders, donors, and community partners appreciate transparency. Being honest about challenges, and the steps you’re taking to address them, can strengthen trust and sometimes open doors to new support.

Consider using your newsletters, board meetings, or annual report to share your cost-saving efforts and demonstrate responsible stewardship.

 

Bonus: Reignite Donor Engagement and Explore New Fundraising Channels

Although the focus of this piece is cost-saving, I also wanted to add a section about proactive revenue generation through donor engagement.  Cost-saving is essential, but long-term sustainability also depends on growing and energizing your donor base. A funding crunch is actually an opportunity to re-engage existing supporters and attract new ones, as long as you build the right message and approach.

Here’s what we’ve seen work well:

• Be transparent and human: Let donors know how financial pressures are affecting your mission and how their support can make a direct impact. Donors are more likely to give when they understand the urgency and stakes.

• Try micro-campaigns: These are short-term, focused fundraising efforts with clear goals.
  • For example, messaging like “Help us keep this program running for 30 more days” can be very effective.

• Segment and personalize: Use your CRM and email list to tailor messages based on donor history, interests, or involvement level.
• Offer non-monetary ways to help: Building off point #7, encourage volunteering, in-kind donations, peer-to-peer fundraising, or simply sharing your message. Even if individuals cannot afford to give, there are many ways they can help the mission.
• Practice donor stewardship: Show gratitude often. A quick phone call or handwritten note goes a long way toward donor retention. In our experience, it’s these personal touches that keep supporters engaged long-term.

If your internal team is stretched thin, outsourcing donor communications or campaign planning (via partners like outside grant writers) can be an affordable way to maintain donor momentum without overburdening staff.

 

Final Thoughts

We understand how stressful a funding crunch can be. But we’ve also seen how it can spark smart, lasting changes, changes that leave organizations stronger and more resilient.

By making intentional decisions, not just reactive cuts, you can navigate this moment with purpose and emerge more focused, more efficient, and more deeply connected to your mission. As the famous Chinese Proverb states, “The best time to plant a tree was 20 years ago. The second best time is now.” Nonprofits that use this period to evaluate, refine, and strengthen their organization’s operations will be well positioned to weather any storm that comes their way.