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  • HQ Consultancy

NFPs can be PROFITABLE.

A common misconception is that not-for-profits (NFPs) aren't able to be profitable, but we as a sector, are responsible for educating our communities on the reality of operating a NFP.


Firstly, NFPs have almost the same business obligations as companies, in fact so much so that some NFPs have chosen to restructure to a company limited. This means there will always be a proportion of funds allocated toward general business expenses. (Shameless plug - but HQ Consultancy would love to speak with you about how we can assist with your business management)


Secondly, a not-for-profit can make a profit and this should be the goal of every NFP. Having NFP or charity status means that directors can not take a profit share and that all profit must go towards business operations and most importantly, the organisation's cause.


Profitable NFPs are often criticised for bringing business ethics to the sector, but there is no reason why business and NFPs shouldn't be intertwined, as mentioned above they are effectively the same. Think of all the great things your NFP could do if you were generating revenue. It would improve your organisations capability, reach, and resources resulting in improved experiences for all your organisation's beneficiaries.


I have personally sat on many NFP boards who genuinely want to make a positive impact, but also have the mindset that grants are enough for an Organisation to live on. In reality, applying for grants is a lengthy process, that quite often has a poor return on investment. If you are lucky enough to be awarded the grant are then bound by the terms of that grant meaning delivery within the given timeframe, straining your resources (because grants rarely allow for additional staff), which then leads to neglect of other vital areas of the business and months of catch-up. Don't get me wrong, grants are amazing opportunities and should certainly be on the agenda for all NFPs, but they should not be the be-all and end-all for any NFP... It's good business practice not to rely on revenue from only one source, and NFPs should be no different.


So where do you start? If you are involved in an NFP in the NT and you've identified your revenue risk and been proactive and started looking for alternative options you should be congratulated! But rather than stepping towards a sponsorship or donation model, we need to start looking more inwardly at how our unique services and offerings can be revenue-raising in their own right! We need to start thinking outside of the "Not-For-Profit" label and start referring to ourselves more as for-purpose organisations - perfectly capable of generating profit to help our cause!


To wrap this blog up, in my opinion, business is not ruining our sector - it's driving it forward, allowing us to do more than we ever thought possible, but it also comes with its challenges like anything. If you want to start working on your NFPs sustainability speak to us about how we can help.



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