The 8 Types of Nonprofit Waste (and How to Fix Them)

Nonprofits love to talk about impact. A less popular topic? Waste.

Remember that time on Survivor when J’Tia threw all of the tribe’s rice into the fire? Waste is like that. It’s the single greatest enemy to nonprofit impact. Let’s face it: any precious time, energy, money, and other resources that don’t go toward positive world-change isn’t just a missed opportunity—it’s reinforcing false stereotypes that nonprofits are unequipped.

The good news is, nonprofit leaders don’t have to settle for waste in their organizations. Here are eight wastes every nonprofit leader needs to be on the lookout for and how they can be avoided.

1. Defects

As the name suggests, defects are mistakes that require additional time, resources, or money to fix. A volunteer’s mistake ruins ten perfectly good suits at a nonprofit that gives interview clothing to jobless women. A whole shelf of canned peaches expires at a food pantry. A staff member gets in a fender bender with the organization’s van. 

If we’re honest with ourselves as nonprofit leaders, defects are happening all around us all the time. Deep breaths, though. It’s important to avoid the two extremes of extreme micromanagement on the one hand, and the urge to turn a blind eye and be loved by all on the other.

The right way to handle defects? Two words: continuous improvement. Engage your team to identify the sources of defect waste. Start implementing tiny improvements that make today’s defect waste a little less than yesterday’s. Save those peaches!

2. Overproduction

It’s possible to deliver too much, too early, in a form that the beneficiary doesn’t really want. Like planning an event for 100 attendees when only 50 show up. Or printing 500 copies of the annual report and only 150 get sent to potential donors. Or maybe teaching a course to a group that already knows all of the information. Do we make educated guesses and get it wrong sometimes? Of course. But we also shouldn’t be ignorant about overproduction in the name of playing it safe.

I see overproduction time and time again in my work with nonprofits, and it almost always originates from a heart to serve. “Remember that time when 150 people showed up for a meal and we only had 145 sandwiches? We’ll never let that happen again!” 

So, how do you handle overproduction? Continuous improvement! Engage your team to right-size production to meet the demand of the moment. Try to resist the urge to cushion everything you do in your organization with safety stock. 

3. Waiting

This is the nonprofit waste of all wastes. Waiting occurs whenever the flow of value significantly slows or stops. A team member waits on the executive director for approval. A volunteer forgets the microphone for the event and runs back to the office to grab it. On-time attendees are made to wait while a couple of late ones arrive. 

What makes waiting so pernicious is its power to trigger all of the other seven forms of waste. But the reverse is good news for nonprofit leaders. Any waiting you eradicate from your nonprofit’s systems will have a dramatic effect on waste reduction and impact enhancement.

How to eliminate waiting? You guessed it: continuous improvement. Anywhere you see things that aren’t moving—people, papers, packages, pets—it’s time to jump into action. The waste of waiting can hurt your impact if you let it.

4. Talent

This one tends to surprise many nonprofit leaders. Talent waste is failing to recognize or utilize people’s talents, skills, or special knowledge. Maybe a volunteer has a degree in graphic design and is never asked to help with the nonprofit’s social media accounts. Or a board member knows 30+ high-potential prospective donors but never reaches out to them. Or the executive director spends hours building a presentation when a freelancer could have done it.

One of the greatest oversights we make as a sector is not getting more help. Nonprofit leaders can have a hard time with the transition from doing to delegating. But it’s difficult to maintain both control and growth. 

Here’s what can help: continuous improvement. Engage your team to identify their core strengths and do all you can to help unleash them in support of your mission. It’s time you made the shift from doing tasks to delegating.

5. Transportation

As the name suggests, transportation waste refers to unnecessarily transporting value-making things from one place to another. The email is FYI’ed to 10 additional people who didn’t need to see it. A front desk employee walks to 3 different team members’ offices to get signatures. Or how about the books that you had delivered to the office instead of shipping them directly to course participants?

Sometime it’s difficult to realize how transportation waste tends to absorb into many nonprofits’ processes. Even if your organization operates remotely and rarely uses any physical means of transportation or delivery, it still happens. That extra little step that happened once at the beginning of a process might become a permanent fixture.

How to wipe out transportation waste? Those same beautiful two words: continuous improvement. Challenge yourself and your team to shave off every last little bit of extra transportation waste. Okay, maybe living in your nonprofit’s headquarters is a little extreme. But staff working from home to save transportation waste and office expenses? There’s an idea.

6. Inventory

Inventory waste refers to a surplus of materials or staff that results in unnecessary money spent, time used for handling/training/supervising, and space/storage requirements.

Not all inventory waste looks like a scene from Hoarders. Any time you see little piles of anything—whether it’s boxes in the foyer or goods waiting to go to beneficiaries—you’re looking at inventory waste. Perhaps a clothing distribution nonprofit holds onto boxes of donated clothes for months or years. Maybe printed materials sit for years on shelves waiting for people to take them and read them. Or—and hopefully this is not the case—50 volunteers filled out your interest form and weeks have gone by without them hearing from anyone on your team.

Want to knock out your inventory issues? Try continuous improvement. Engage your team to develop an eye for those pesky little piles of stuff sitting around. Embrace a credo of “just in time” and find ways to eliminate the accumulation of things in wasteful limbo.

7. Motion

Similar to the bigger systemic waste of transportation, motion waste refers to a single person or group doing unnecessary movements to accomplish a specific task. Suppose a beneficiary has to take 3 buses across town to receive a service from a nonprofit. Maybe a front desk that is set up poorly results in a ton of unnecessary movement by reception staff. Or what about that board meeting you decided to hold downtown during rush hour when most of the board members live 30 minutes away in the same suburb?

Your people have really good ideas about eliminating motion waste if you’re willing to unleash their creative potential. Maybe try a team problem-solving exercise where you focus on one aspect of your process, one job role, or one beneficiary journey to solve for ways to eliminate motion waste.

It’s time for continuous improvement. Little by little, you can streamline your processes so that every movement makes the most of the time and energy of your staff, volunteers, and beneficiaries.

8. Overprocessing

The eighth and final waste is overprocessing. This refers to any unnecessary production or communication that adds no additional value to an outcome. Maybe an online volunteer training lasts an hour when a 30-minute lesson would have covered everything just fine. Or an afterschool care center for kids holds a musical performance once a month, but parents secretly wonder if their ears can handle it. Or a residence for homeless veterans serves meals with durable dishes and metal silverware when simpler (but recyclable!) materials would work just as well.

The temptation to gold-plate the products and services we deliver is real. After all, each of us wants to produce the best results. However, we need to train ourselves to see value through the only lens that matters: the viewpoint of the people we serve.

How to get rid of overprocessing? Continuous improvement. Consider walking through your systems alongside real beneficiaries to better understand the things they find most important and solve for those. Here’s to more value and less waste all around!


About the Author

Derik, founder of Sparrow Nonprofit Solutions, is a former management consultant at McKinsey & Company and former US Army Intelligence Officer with two combat deployments. Derik graduated in the Top 10% of his West Point class, holds a Masters from Liberty University, is in the dissertation phase of a PhD, and is a Certified Fundraising Executive (CFRE). He loves getting out on mountain trails with his wife and three boys and is deeply committed to helping nonprofit leaders maximize their world-changing impact.


Derik Timmerman

July 6, 2021

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