203 ⎸ Q: Is the NonProfit Sector a Viable Niche?

Hey ambitious bookkeepers!

I recently received an amazing question from Steve, a CMA with 20+ years of financial management experience who's considering specializing in nonprofit bookkeeping as he launches his own firm. His question really got me thinking, and I realized this is something many of you might be wondering about too.

Let me share my honest take on whether nonprofits make for a viable - and profitable - bookkeeping niche.

Listen here or on your favorite podcast player, or watch the video version on YouTube >>

Now let's dive into some highlights!

Steve's Background (And Why It Matters)

First, let me tell you about Steve because his background is pretty impressive. He's a CMA with over two decades of experience in accounting, financial analysis, budgeting, and operations. He's been active with nonprofits for years, currently works as a senior manager at a $5 billion nonprofit, and has hands-on experience with fund-based accounting, Form 990 prep, internal controls, and board work.

Sound familiar? If you have any nonprofit experience - even volunteering on a board - you might have more qualification than you think.

The Major Advantages of the Nonprofit Niche

Let me be straight with you: I think nonprofits can be an excellent niche, and here's why.

You Face Less Competition Most bookkeepers avoid nonprofits like the plague because they think it's not profitable or too complex. This actually works in your favor! When there are fewer specialists in a space, you automatically have less competition and can command higher rates.

Fund Accounting is Your Secret Weapon Fund accounting scares a lot of people, but if you understand it (or are willing to learn it), you have a massive technical advantage. I learned it in college and did some early in my career, but I'll be honest - I'd be nervous to tackle a nonprofit client now because I haven't kept up with it. That's exactly why specialists like Steve are so valuable.

Board Experience is Gold Many nonprofit bookkeepers don't know how to speak "board language" or create board-friendly reports. If you have board experience or are willing to develop these skills, you're positioning yourself more like a CFO than just a bookkeeper - and that commands CFO-level pricing.

Internal Controls Are Critical Nonprofits need strong internal controls, especially when dealing with grant funding and donor restrictions. If you can implement and maintain these systems, you're providing tremendous value that goes way beyond basic bookkeeping.

Addressing the Common Concerns

Now let's talk about the elephant in the room: the challenges people associate with nonprofit work.

"Nonprofits Don't Want to Pay" This is the biggest myth I hear, and it's just not true across the board. Yes, some smaller nonprofits are bootstrapped, but many have grant funding and real budgets. The key is targeting the right size nonprofits and using value-based pricing.

Instead of pricing based on time or transaction volume, price based on the value you bring. With fund accounting expertise, board experience, and internal controls knowledge, you're bringing serious value to the table. Price accordingly.

"It's Not Scalable" Any niche can be scalable if you approach it right. Here's how to make nonprofit bookkeeping scalable:

• Create standardized processes and operating procedures
• Choose a common tech stack for your team
• Productize your services (think monthly board report packages, audit prep kits, internal control implementation)
• Specialize in specific software early on
• Build training resources to bring team members up to speed on nonprofit accounting

Finding Your Sweet Spot

Here's the secret sauce: focus on mid-size nonprofits. These are organizations that have grant funding and real budgets but haven't yet hired in-house finance teams. They need your expertise and can afford to pay for it properly.

You probably have a better sense than I do of where that transition typically happens in the nonprofit world - where organizations start bringing accounting in-house versus outsourcing it. That's your target zone.

Getting Started in the Nonprofit Niche

If you're considering this path, here's my advice:

Start Networking Now Even if you're not ready to officially launch, start building relationships in the nonprofit community. Connect with board members, local nonprofit associations, and grant consultants. In the nonprofit world, relationships are everything.

Consider Your Passion Don't choose this niche just because you have the experience. Choose it because you're genuinely passionate about helping nonprofits succeed. That passion will come through in your marketing and client relationships.

Offer Educational Content Consider hosting workshops or webinars on topics like "Internal Controls for Nonprofits" or "Reading Financial Statements for Board Members." Many nonprofit board members are volunteers without financial expertise, so education is incredibly valuable.

Keep Services Flexible Create productized packages but keep them flexible. Think basic bookkeeping plus optional add-ons like audit prep, restricted fund tracking, or budget-to-actual reporting.

My Bottom Line

If you have nonprofit experience and passion for the sector, I say go for it. The combination of less competition, specialized technical requirements, and organizations with real budgets creates a compelling opportunity.

Just remember to price based on value, focus on the right size organizations, and build relationships in the community. The nonprofit sector might just be the profitable niche you've been looking for.

What do you think? Are you considering the nonprofit niche, or do you have experience working with nonprofit clients? I'd love to hear your thoughts!

Connect with The Ambitious Bookkeeper®:

🌐 Website: ambitiousbookkeeper.com

👩‍💻 Blog: ambitiousbookkeeper.com/blog

📱 Instagram: instagram.com/ambitiousbookkeeper

📱 Facebook: Facebook.com/serenashoupcpa

💼 LinkedIn: Linkedin.com/in/SerenaShoup

For experienced bookkeepers & accountants:

Learn how to start your bookkeeping business in The Bookkeeping Business Accelerator® >>

Grab my FREE Start your Bookkeeping Biz Checklist >>

Grab my FREE New Client Onboarding Templates >>

For new bookkeepers:

Learn the fundamental accounting skills in Katie Ferro's Become a Bookkeeper >>

For online course creators:

Become a client at my firm, Of Course Financial >>

AFFILIATE DISCLAIMER

We participate in affiliate marketing programs, which means we may earn a commission from purchases made through the links on our blog. However, our recommendations are based on our own research and expertise, and your trust is our priority.