Subscribe to RSSA Dollar Earned is a Dollar Saved
No, you didn’t read that wrong. Or maybe you did. Read it again – “A Dollar Earned is a Dollar Saved.” We are so used to hearing it the other way around.
And so it is. Sometimes.
The moral is that if more money is needed, whether personally or professionally, an easy way to acquire it is to cut back on other spending. We hear it most as, “drink fewer lattes and live below your means.” For businesses or ministries it takes the form of reducing capital investment and expenditure – cutting back on spending that is needed to accomplish less strategic initiatives. It is often approached as a zero-sum game when it rarely is.
Branding expert Seth Godin recently discussed this concept in his blog. As with a lot of great online content, a friend of mine forwarded this to me. Unfortunately, I read that entry at the same time I was going through Robert Kiyosaki’s Increase Your Financial IQ, where lesson #1 is “How to Increase Your Money.”
It seems so simple. If we need more money, we can save or we can earn. But conventional wisdom seems to have forgotten the ability to make money in the pursuit of our goals.
That is, at least, for nonprofits. For-profits are required to find and create new businesses and markets, as their shareholders expect a return on their investment. Each and every fiscal quarter these organizations are measured on one element above all others: profit. While this can be aided by efficiencies and saving money, it is primarily done through making more of it.
Has antipathy towards the profit motive caused nonprofits to completely disregard this possibility in funding their mission? Instead of shareholders, we have donors. Outside of that many things remain the same: nonprofits must provide a needed product or service and they must give equal value for the money they receive. At the end of the day, there are many foundational similarities between both profit and not-for-profit organizations.
As such, when funding begins to be in short supply, a donor base remains a critical part of funding, but cannot be the only one. And, while important, conserving money through cost-savings can only do so much.
On the other hand, new revenue streams, based on free market principles and solutions, and complementary of your organization, may be the answer.
A dollar earned is a dollar saved.
Tags: capitalism, commerce, financials, free market, new revenue, saving