Let's face it. Dealing with the budget for the coming year makes you want to put your face on the desk ... and that same intensity exists as you look at the current year- end results. You've got the reality of now. Chances are good that it's too late to make up for the shortfall. You're likely going to have a deficit. That's a tough pill to swallow as you look toward the new year knowing you need to put a budget in place.
There are two obvious monsters in the Executive Director's office at this time of year. The fFundraiser and the BoardBoard. The former must produce, and the latter must buy into the vision - — this is what we want to raise money for; here are the programs we want to do; and here are the activities we foresee happening in the coming year.
If you're interested in transforming your organization's results in the upcoming year, it begins with zero- based budgeting. DO NOT take the budget you currently have, add incremental changes, and call it good. "Let's put this up 3%, this up 6%, this up 2%, etc.” This is the road to nowhere, and it is among the top three reasons nonprofits stay on the struggle bus.
Start with a zero base. That will cause you to ask, "What programs and activities do we want to do for our Mmission in the next year?" List them out. At that point, Then go to the numbers. Ask yourself, "What will it cost to have this?" This is what the Mmission needs. Most nonprofits forgot long ago who they're doing the budget for. The only customer of the budget is the Mmission. It is not the BoardBoard. It is not the fFundraiser. It And it is not all the other masters you are dancing to right now.
Line item budgets invite nitpicking. How many times have you been in meetings and the Board gets stuck on the line item for office supplies? Or the lease for the copier? Take the budget to a higher level. Start with pPrograms. What is it that you want to do in the coming year? Yes, you need staff. Yes, there is rent. And don’t forget cleaning. And those items feed into a each pProgram or activity of the Mmission.
Cast the vision of what you want to achieve, break it down by programs and then allocate a portion of the line item (rent for example) to the program. Same for staffing costs. Decide how many staff you need to do the work, calculate the wage costs, and assign that cost to the pProgram the person works in.
A program or activity of a nonprofit organization to meet the missionMission also incurs direct costs. Tie the costs in the budget directly to the program. It changes the conversation and forces the Board to focus on the why. You can see why a Board gets all tied up over a line-item budget. It’s aA standard list with dollars plugged into it doesn’t . You didn’t give them context tied to the missionMission.
This is a different way of thinking. Consider these two scenarios. You can say to someone, "This year, I'm going to raise $80,000 to plant an apple orchard.” Or you can say, "This community has green space for us to develop an apple orchard. If we get a great crop in the first year, here's what we'll do with the apples. We'll take them to schools. We'll take them to the food bank. We'll do a community apple event.” There's your WHY. That is the vision of the apple orchard.
Once you've created the vision of the apple orchard, you ask, "What would that cost?" Maybe it's $80,000. And now you have a picture of what it is, what it will cost,, and why you should raise money for it. Or iInstead, you could, as so many do, keep things black and white on a ledger, with n. Nothing to inspire and all kinds of unknowns that create fear. One works, and one doesn’t.
Thriving Point: Fear doesn't create a budget. Vision does.
For over 25 years Sheree Allison has been a committed professional, leader and visionary within the non-profit arena. During her years of tenure she has led her own organization to tremendous Mission impact, and shown many other organizations how to achieve the same thing by looking at our collective work through a bold new lens.
Sheree is currently the Executive Director of Big Brothers Big Sisters/Boys & Girls Club in Miramichi, an eastern Canadian community of 32,000 people. She began over 25 years ago with a small budget, few supports, little community recognition and big dreams. Since that time she has tripled donor contributions, increased annual fundraising by over 450% and currently leads a local force of hundreds of eager volunteers.
Exceptional strategic fundraising has been a hallmark of Sheree Allison’s career; from creating Bowl For Kids, to the Dream Cottage lottery that’s been running for 22 years, to Sheree’s acclaimed Gold Rush Method that took her budget from $1 Million to $2.5 Million annually in just 26 months time, causing explosive growth in existing programs, new programs and the number of children’s lives impacted by the Mission.
In addition to the day-to- day running of her organization, Sheree devotes significant energy to consulting, educating and guiding non-profit organizations and professionals on how to overcome their challenges and powerfully break through the “glass ceiling” of Mission impact.
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