3 Budget Boo Boos Your Nonprofit Can’t Afford to MakePosted: October 29, 2013
Why does your nonprofit organization prepare a budget anyway? Maybe to “stay on track”? Sometimes a budget is viewed as a way to promote positive cash flow. Or, maybe one is put together just because its required. You know- the standard yearly procedure that deep down everyone sees as nothing more than a distraction. Not many good reasons there.
So how do you bring your budgeting process back to life? Paying attention to the following budget boo boos can help you to get more from the process and product.
1. Look out! Its the big bad budget monster!
Plenty of nonprofits continually question if they will be around for the long haul. For many, that is a valid question; however, instead of thriving, their focus is merely on surviving. Facing the difficulty of balancing a budget year after year can result in a process driven by fear. This blinding of vision is accentuated when the nonprofit keeps looking in the rear view mirror at earlier years financial struggles. Releasing the fear and stopping the stories in your head can help move your nonprofit to a higher level.
Looking at chances for progress instead of possible calamities would be a good starting point. More specifically, preparing an Opportunity Budget can shift the focus from just surviving to thriving. An Opportunity Budget seeks to discover and capitalize upon timely, favorable circumstances. For the most part, that means always keeping your feet on the ground and your nose in the air. Then its time to roll up your sleeves and roll out the idea along with a responsible budget. As you follow this never-ending process, remember what H. Jackson Brown, Jr. said: “Opportunity dances with those already on the dance floor.”
Don’t miss that dance.
2. Distributing the Almonds.
When you allocate resources, don’t be the delivery person who drives everyone nuts! It’s important to make sure that every program “gift box” has just the right assortment and reaches its destination on time. Each dollar of budgeted income and cash reserves must be allocated as efficiently as possible.
Producing the greatest value of services with the given resource(s) should be a key objective for nonprofits. To decide if you are meeting this objective, consider questions such as these.
- What use of the resource(s) could best advance the mission?
- What program(s) and/or beneficiaries could receive maximum benefits from this resource?
- What programs(s) and/or beneficiaries would suffer the most without it?
- What program(s) could face closure absent this resource?
- When is the resource needed by the program/beneficiary? (In your budget, always take seasonality factors into account.)
- Should a limited resource be shared by programs/beneficiaries to produce the greatest value of services?
- How much of our available resources will be committed to programs? How much to administration? How much to fundraising activities?
- What return on investment can we expect on each allocation of resources?
3. Get Out the Colored Markers.
Failure to invest in the highlighting of accomplishments and the efforts of those who contributed may be the biggest boo boo of all. Ouch. Anticipate milestones and be ready with the funds to celebrate. Have fun while you are at it too. There is nothing wrong with being visible in the community either. Just don’t try to be overly thrifty here: the return associated with allocating resources to this area is often hard to quantify yet arguably holds a value above all else.
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