How Nonprofits Can Complete a Successful Commercial Transformation

Nonprofit Transformation

How to Complete a Successful Commercial Transformation

How Nonprofits Can Complete a Successful Commercial Transformation

In today's economy, many nonprofit organizations are seeing a decrease in private donations, individual contributions, and public and government funding, such as grants. Besides the main challenge of acquiring new donors nonprofit organizations need to put emphasis on proving their impact for donors while navigating political landscapes and responding to increased demands for the services they provide at the same time. This has been eclipsed by the need to engage the community, retain current donors and promote general brand awareness. Nonprofits, which are more hesitant or complex to evolve, are falling behind and losing money.

Now, we know it's not enough to only undergo a Technology Transformation - your nonprofit must also carry out a commercial one. It is imperative that your nonprofit address commercial transformation factors, such as cost and spend management, as we move into the new normal. Let’s break down what this means for your organization and how SoftwareONE can help.

Creating a Strong Commercial Transformation Strategy

These days, successful nonprofits are creating commercial foundations with strong digital business strategies. Commercial transformations offer nonprofits multiple benefits, such as increasing their revenue and making transparency a priority. By creating commercial revenue streams, nonprofit organizations can increase their financial stability and add new funding sources, which allow them to have a greater reach and bigger impact. Additionally, financial self-sufficiency helps nonprofits make better progress on their goals.

Nonprofits that focus on commercial ideas, social entrepreneurship, and business enterprises are able to create a greater social impact because they have more revenue streams. Commercial transformations also allow nonprofits to make more business partnerships with for-profit organizations. In addition, these nonprofits are able to withstand global changes better, such as economic recessions.

Before your nonprofit goes through a commercial transformation, it's important to consider the specific strategies you need and how to put them into motion. Nonprofits have to intentionally change themselves into social enterprises by updating their operating models and starting new revenue streams.

During the strategy creation process, it's also important to address how your organization's leaders, members, and contributors feel about generating revenue by increasing money-making efforts through commercial transformation. This can be a challenging process for organizations with charitable missions, but finding a balance and focusing on the benefits of commercialization without losing sight of your mission is possible.

Remember, a strong commercial transformation strategy should:

  • Identify and implement new revenue streams
  • Ensure transparency and predictability
  • Reduce software and cloud spend
  • Streamline purchasing processes
  • Avoid compliance risks
  • Optimize contracts and usage rights
  • Identify new business partnerships

The Cost and Spend Management Factor

Nonprofits must consider the costs of a commercial transformation and how to handle them. There is a potential to create a short-term or long-term impact on the nonprofit's charitable mission goals while your organization is trying to establish new revenue streams and business opportunities. Some funds may have to be diverted to these organizational activities with the understanding that future revenues will increase and benefit the nonprofit's overall mission.

Many nonprofits struggle with costs before undergoing any changes, so a commercial transformation can highlight problem areas and bring them to the surface. For example, some nonprofits barely survive from quarter to quarter and lack a clear understanding of their actual costs. Others don't evaluate which programs are financially successful and how to improve them while reducing costs. When nonprofits feel the constant pressure of fundraising and paperwork, they can neglect to look at their real costs. Evaluating every dollar of a nonprofit's costs is the key to having a successful transformation. 

Examining the true costs of a Commercial Transformation requires data. Nonprofits may keep good records of donor contributions and spending, but commercial transformations require more information. The costs of administrative tasks, software, hardware, apps, and other programs must be examined. Every aspect of the organization that costs money has to be evaluated to discover if it's possible to save money.

One area that may create some cost savings during a commercial transformation is nurturing existing business partnerships instead of developing new ones. It's often easier to work on expanding a partnership with a for-profit organization that already works with your organization and leads to lower costs.

Nonprofits must also think about spend management, which is often a major challenge for organizations. Spend management focuses on supplier relationships and all the purchases your nonprofit makes, so every dollar is counted. When examining the spend management, it's crucial to look at both the operating budget, which includes programs and operating costs and the capital campaigns. Having the right tools can help nonprofits control their spending better, which leads to more money being directed toward their missions.

How SoftwareONE Can Support Your Nonprofit

SoftwareONE is a trusted business partner for digital transformation and can help nonprofits through successful commercial transformations. We offer both professional services (advisory) and managed services. We understand how to create and implement a successful commercial transformation by putting together the right strategies.

SoftwareONE can also help you evaluate your current programs and implement new revenue streams. We can discover how to generate new and innovative ideas that will increase funding and help you fulfill your mission. Our comprehensive services benefit nonprofit organizations by saving them precious time and money.

One of the added benefits of working with SoftwareONE is that your nonprofit will receive personalized guidance to become more secure, efficient, and collaborative. SoftwareONE’s ONEImpact initiative can help you unlock the potential and productivity of your nonprofit teams.

We create comprehensive roadmaps for commercial transformations that include:

  • Identifying the right technology and devices
  • Automating business processes and programs
  • Organizing data to make better decisions and inform future actions
  • Accelerating adoption and collaboration
  • Streamlining processes and cutting unnecessary costs
  • Making sure compliance and security processes are up to date
  • Optimizing contracts, tasks, and other aspects of the organization
  • Making sure transparency exists throughout the organization

The Bottom Line

Nonprofits that want to remain competitive must consider commercial transformations. The right strategies can increase revenue while improving current programs. Nonprofits that go through successful commercial transformations benefit from more funding that allows them to complete their missions and reach a larger segment of the population they want to serve.

SoftwareONE’s Commercial Transformation Strategy for Nonprofits

SoftwareONE can support your nonprofit's commercial transformation in ways you may have never considered. Discover how a partnership with us can take your organization to new heights.

Learn More
  • Digital Transformation
  • Microsoft, Microsoft 365, Azure, Teams

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Author

Jessica Motta

Jessica Motta

Global Program Manager

ONEImpact Nonprofit Industry Team

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