How Flexible Buying Can Do More for Your Nonprofit

“Doing more with less” is a mantra nonprofits know well. As surveyed by Salesforce Sixth Edition of the Nonprofit Trends report, 33% of nonprofits have become more agile and flexible to respond to dynamic situations and crises. Nonprofits’ needs can shift due to emergencies, community demands, and growing program requirements – where current resources may not suffice at time of need.

To remain mission-focused and financially stable, nonprofits can adopt smart business buying practices.

We’ll explore three flexible purchasing tools that can help optimize your current buying process as your organization continues to evolve.

Defining flexible buying

First, let’s define flexible buying. Flexible buying for nonprofits means having a purchasing process in place that can adapt to any need, making every dollar count. Unlike for-profit businesses, nonprofits often encounter:

• Limited budgets: Nonprofits manage their finances using the system of fund accounting. Most self-generate their funds and rely on donations and grants to cover their operating expenses.
• Unpredicted needs: There may be times when a sudden influx of donations allow for an upgrade in more resources, or when a program requires additional supplies on a short notice without funding.
• Different purchases: As revealed by the National Council of Nonprofits, “Nonprofits spend nearly $1 trillion annually for goods and services, ranging from large expenses, like medical equipment for nonprofit hospitals, to everyday purchases such as office supplies, food, utilities, and rent.”

Invoicing with extended payment terms

One way to enhance flexibility in purchasing is through extending payment terms. By negotiating longer payment terms with suppliers, nonprofits can better manage their cash flow, while waiting for funding from grants and donations to arrive. This can be especially useful for smaller nonprofits where there is more volatility in raising and securing funds. Additionally, extended payment terms free up resources for core mission-related activities.

Amazon Business offers self-serve options to extend payment terms, giving you more flexibility and control over your organization’s finances. Pay by Invoice, a digital invoicing program, provides eligible customers with access to flexible net payment terms, up to 30-day terms. When cash flow is a concern, you’re able to request for credit line increases throughout certain times of the year. To determine eligibility, your organization’s account will be automatically assessed at the time of registration.

Another route for more added flexibility on payment terms is through having a Business Prime membership. Members are eligible for extended 45- or 60-day payment terms.

Tax-exempt purchasing

Nonprofits are classified as 501(c)(3) organizations, meaning you can qualify for tax-exempt status. Tax-exempt purchasing enables more savings on purchases, giving you the flexibility to stretch grants and donation funds further, without the burden of unnecessary tax costs. When you enroll in the Amazon Tax Exemption Program (ATEP), you can directly apply your organization's tax exemption status to eligible purchases to ensure that purchases made by your approved buyers are automatically tax-exempt.

Setting guardrails for buyer flexibility

Nonprofits often have limited staff capacity restricting their ability to internally replace an administrative position. Staff shortages can create situations where more work is piled on existing staff. There may be instances when a non-purchasing role will need to step in and procure all the required supplies to continue their mission’s program. To adapt to the unexpected change in role, it is important for nonprofit organizations to set Buying Policies in place. Buying Policies is an accessible feature available on your Amazon Business account that allows you to gate buyers’ purchases, such as setting spending limits, restricting sellers who are not participating in ATEP, and other product categories that do not align with restricted donations. That way, you can turn procurement policies into easy-to-follow visual signposts for new buyers.

Flexible buying

Through negotiating for extended payment terms and working with suppliers who offer tax-exempt purchases, nonprofit organizations can attend to their program needs and commitments despite having resource constraints. Having account guardrails also provides support for new buyers to shop with confidence.