A nonprofit’s budget can be the bane of an organization’s existence. For organizations that rely on grants, this can mean even more uncertainty. This can mean planning years in advance and multiple revisions to a budget prior to board approval. The involvement of non-financial staff can serve to complicate the process even further.
At Rock Environmental, we have found a number of helpful ways to conduct the budgeting process.
Getting the proverbial “ducks in a row” is the first step to successful budgeting. Organization wide cooperation is key to a smooth budgeting process. All departments should be involved in not only aggregating the necessary financial information but contributing feedback regarding future budgeting needs.
Plan ahead when looking into the revenue streams. What are your organization’s short and long term goals and how can budgeting best serve these goals? Operating costs can take a significant amount of your organization’s budget so proper planning for allocating the non-operating costs can help to make the most of programming and community outreach efforts.
Take stock of the current revenue and ensure that planned expenses come in below this bar. Additional planned donations including pledges and other revenue sources can be taken into consideration but having a diverse number of revenue streams is important for creating a balance should one disappear.
Be concise when delivering the budget documents. The budget should be readable though, so keep notes to a minimum. Presentation is also important. Take time to organize all the information and make tracking it easy for everyone.
Understanding the year to year fluctuations is important so multiyear budgets can help with more long term planning, especially if operating costs are holding fairly steady. This can allow you and your board to plan ahead for future expenses as well as understand the baseline costs that must be accounted for.
Still feel overwhelmed? Let Rock Environmental do the numbers for you or work with your existing staff to make sure you do have those duck in a row…
Consulting services from Rock Environmental offer comprehensive support for back-of-house services, including budgeting, capital campaign design and management, and other strategic financial planning. Contact us directly to learn more about these services via email at email@example.com.