Nonprofit Leaders: 3 Main Things You Can Do With Your Money
Why Your Nonprofit’s Comfort Level with Spending May Be the Biggest Barrier to Fundraising Growth
Recently I shared a simple framework for thinking about money:
Save it.
Manage it.
Spend it.
As parents of two emerging-adult daughters, my husband and I spend a lot of time teaching these concepts. We talk about savings goals, budgeting, investing, and making wise financial decisions.
But the more we've studied money, reflected on our own upbringing, and worked to help our daughters develop healthy financial habits, the more I've realized something surprising:
Most of us were only taught two-thirds of the equation.
We were taught how to save. We were taught how to manage. But very few of us were taught how to spend.
And that missing lesson may be costing nonprofit organizations millions of dollars in unrealized revenue every year.
The Lessons Many of Us Learned About Money
Growing up, I received valuable lessons from my parents about financial responsibility.
I remember sitting at the bank with my dad as we deposited money from summer jobs into certificates of deposit. Saving was encouraged and celebrated. It represented security, discipline, and responsibility.
Later, when I graduated from college and moved into my first apartment, my dad helped me create a budget. I learned how to track expenses, live within my means, and manage my finances.
These were important lessons.
Today, my daughters manage their own checking, savings, and brokerage accounts. They save a portion of every paycheck and understand how to budget for their goals.
But there was one lesson that was largely absent from my financial education: How to spend money confidently.
In many households, spending was portrayed as dangerous. Purchases were scrutinized. Debt was viewed as universally bad. Risk was something to avoid.
The underlying message was simple: "Save whenever possible. Spend only when absolutely necessary."
While that mindset can create responsible savers, it can also create fearful decision-makers.
The Hidden Cost of Fear-Based Spending
Over the years, I've met countless people who struggle with spending money—even when they can clearly afford to do so.
They feel guilty. They worry they're making a mistake. They constantly prepare for worst-case scenarios.
As a result, they delay purchases, postpone experiences, and hold onto resources long after those resources could have been put to productive use.
The irony is that money was never intended to simply sit still.
Saving serves a purpose.
Managing serves a purpose.
But spending serves a purpose too.
Money creates value when it's deployed toward meaningful outcomes. The same principle applies in the nonprofit sector.
Why Nonprofits Have a Spending Problem
Most nonprofit leaders spend significant time discussing savings, financial transparency, and fiscal management.
Board meetings often include conversations about:
Cash reserves
Budget variances
Expense controls
Cost reductions
Financial oversight
These conversations are important. Strong financial stewardship matters.
But there is another conversation that many organizations avoid altogether:
What should we be investing in to grow?
For many nonprofits, spending money feels uncomfortable.
Hiring another fundraiser feels risky.
Investing in donor stewardship feels expensive.
Purchasing technology feels unnecessary.
Bringing in outside expertise feels indulgent.
Increasing fundraising capacity feels difficult to justify.
As a result, organizations continue operating with inadequate staffing, outdated systems, and unrealistic expectations.
Then they wonder why revenue growth remains stagnant.
The Real Reason Nonprofit Strategic Plans Fail
Many nonprofit organizations create ambitious strategic plans.
They envision:
New programs
Expanded services
Additional locations
Greater community impact
Competitive Salaries
Larger annual budgets
The vision is exciting. The goals are worthwhile.
But then the organization attempts to fund those goals using the same fundraising infrastructure that supported the organization five years ago.
The result is predictable.
Revenue plateaus.
Staff become overwhelmed.
Boards grow frustrated.
Strategic initiatives stall.
Not because the goals were unrealistic.
But because the organization was unwilling to invest in the revenue engine required to achieve them.
Growth rarely happens by accident. It usually requires intentional investment.
Revenue Growth Requires Investment
Imagine telling a business owner:
"Double your sales next year, but don't hire anyone, don't upgrade your technology, don't increase marketing, and don't invest in your team."
The idea sounds absurd.
Yet nonprofit leaders hear some version of this every day.
Boards frequently ask organizations to increase fundraising results without increasing fundraising capacity.
They expect major gift growth without donor cultivation.
They expect larger grants without grant-writing resources.
They expect transformational gifts without investment in relationship-building.
The truth is simple: Revenue growth requires investment.
Organizations that consistently raise more money are rarely spending less….
They are spending strategically.
They invest in people.
They invest in systems.
They invest in donor experiences.
They invest in training.
They invest in capacity.
And because they invest wisely, they create significantly more revenue over time.
The Difference Between Nonprofit Frugality and Stewardship
Some readers may be thinking: "But isn't spending donor dollars irresponsibly a problem?"
Absolutely.
No one is advocating reckless spending.
However, stewardship and frugality are not the same thing.
Stewardship means using resources in ways that maximize mission impact.
Frugality simply means staying in scarcity zone and spending less.
Those concepts often overlap, but they are not identical.
In fact, excessive frugality can become poor stewardship when it prevents an organization from fulfilling its mission. A nonprofit that refuses to hire needed fundraising staff may save money in the short term. But if that decision prevents the organization from raising an additional $500,000 annually, was that truly good stewardship? A board that rejects investments in donor development may feel fiscally conservative. But if that decision limits future impact, who ultimately pays the price?
The community.
The mission.
The people being served.
Creating a Needs-Based Budget for your Nonprofit Instead of a Fear-Based Budget
One of the most powerful shifts nonprofit leaders can make is moving from a fear-based budget to a needs-based budget.
A fear-based budget asks: "What can we afford to spend?"
A needs-based budget asks: "What resources are required to achieve our mission and strategic goals?"
The difference is profound.
When organizations start with mission outcomes and strategic priorities, they can build budgets that accurately reflect what success requires.
From there, fundraising becomes the process of securing the resources necessary to fund the plan.
Instead of shrinking vision to fit revenue, organizations build revenue to support vision.
That is how transformational growth occurs.
A Challenge for Nonprofit Leaders and Boards
If your organization feels stuck, consider asking yourself and your board a difficult question: Are we underperforming because we lack resources? Or are we underperforming because we're afraid to invest?
Many organizations aren't struggling because they spend too much.
They're struggling because they've become trapped in a mindset of irrational frugality.
The very habits that helped individuals feel financially secure may now be limiting organizational growth.
Saving matters.
Managing matters.
But spending matters too.
When spending is aligned with strategy, mission, and long-term sustainability, it becomes an investment—not an expense.
And that investment may be the key to unlocking the revenue growth, donor diversification, and mission impact your organization has been pursuing all along.
Ready to Build a Revenue Engine That Matches Your Vision?
If your nonprofit’s strategic plan requires more revenue than you're currently raising, the solution may not be cutting expenses even further.
It may be learning how to confidently invest in the fundraising capacity needed to achieve your goals.
Because organizations don't grow by accident.
They grow when leaders have the courage to invest in the future they're trying to create.
Whenever you’re ready, here are THREE things you can do next:
👣 Follow me on LinkedIn where I share insider info daily — the same lessons I teach my clients about attracting larger gen-ops dollars and diversifying revenue.
🍎 Grab FREE Guides + White Papers — download robust resources you can use to push against the sector’s misconceptions, equip your board, and shift your team into High-ROI fundraising.
📈 Work with me to diversify revenue & secure the gen-ops gifts you need to grow. If you’re a business-minded nonprofit CEO with big growth plans but need to make charitable revenue from investment-level donors a bigger part of your budget, you can apply to work with me here.
