Understanding What is Considered a Small Nonprofit

Starting a nonprofit business is not an easy task to accomplish. One of the critical factors to consider is the size of your organization. The size of a nonprofit organization affects its budget, number of employees, programs offered, and the number of community members it serves. The size of a nonprofit organization is one factor that can act as an advantage or a disadvantage to its success. In this blog post, we will delve into what is considered a small nonprofit, and what advantages and challenges it can pose to its organization.


1. What is a Small Nonprofit?

The term “small nonprofit” is typically used to describe a nonprofit organization that operates on a smaller budget and that has fewer employees.  The classification of a small nonprofit varies based on each organization’s characteristics, including annual budgets, numbers of employees, volunteers, and activities. According to the National Council of Nonprofits, small nonprofits are those with annual budgets of less than $500,000, which is the majority of the nonprofit sector. From this perspective, the number of staff members and volunteers is typically five or less.


2. Benefits of Being a Small Nonprofit

Small nonprofits receive advantages from being small in size, such as flexibility, agility, and close relationships with stakeholders. Smaller organizations’ flexibility is their strength, especially when making decisions or adapting changes more easily than larger organizations. Furthermore, small nonprofits have efficient communication and intimate relationships with their stakeholders, including donors, board members, and volunteers, ensuring everyone is engaged.


3. Challenges for Small Nonprofits

Small nonprofits must overcome choices that larger organizations can handle more easily, including limited resources, fundraising, attracting talented employees, and promoting their mission. These limitations limit small nonprofits’ ability to grow and compete with larger ones and establish broader outreach into the community. Nevertheless, collaborations between small nonprofits and larger organizations may serve as an aid in fulfilling each other’s missions.


4. How Small Nonprofits Operate

Small nonprofits run operations mostly like larger nonprofits, but with more day-to-day challenges. Operating with limited resources means conducting more with less. Still, they may consider acquiring donated software and equipment to maximize the few resources they have to keep labor costs as low as possible. Small nonprofits also benefit from strategic planning, which can help assess needs and consider critical adjustments.


5. Keys to Small Nonprofit Success

There are several best practices small nonprofits can employ to ensure their success. One of the most crucial factors is, of course, fundraising, which typically makes up the majority of their budget. Small nonprofits must also focus on developing partnerships with other organizations, businesses, and individuals in the community. Additionally, small nonprofits must focus on engaging their stakeholders by communicating their missions and showing how they can make a difference in the community.



Small nonprofits may face challenges due to their limited resources, but they have plenty of opportunities to make a difference in the community by leveraging their strengths. The flexibility and agility that comes with being small make it easier to adapt quickly and to keep in touch with all stakeholders. By leveraging technology, strategic planning, and community outreach, small nonprofits can maximize their limited resources and achieve their missions.