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Building a budget when you are allergic to numbers
Sunday, 06 July 2014 18:08

If you work for a nonprofit organization, you have probably seen the budget. Depending on your role at the organization, you may have been part of the process of creating that budget. A well thought out budget is one of the keys to financial stability, growth and fulfillment of an organization’s mission. But what does a better budget look like? An effective budget is realistic, consistent, flexible and measurable.


A recent article published by the National Council of Nonprofits gave some great advice on budgeting for nonprofits. A budget tells an organization’s story through numbers! The focus was on the “6 P’s” approach to nonprofit budgets. Here are the highlights:

 

  • The planning: Creating a budget should not be just looking at last year’s numbers and updating them. What is on program staff’s “wish list”? What does a cost–of-living adjustment look like five years out?
  • The process: The process should be strategic, using a multi-year approach. Budgets should include a narrative as well as the financial component.
  • The policies: Your budget should be similar to your strategic plan (another blog subject perhaps?).  A budget is a living, breathing document that guides your entire organization. It’s not static and changes from month to month. It is OK if actual numbers turn out differently than your projected numbers.
  • The people: Program staff should be involved in building and approving the budget since they know the expenses of their programs. This also provides an opportunity to explain and discuss “shared expenses” such as rent, insurance, utilities, internet, etc.
  • The politics: If politics is the art of bringing people together to make a decision, what bigger decision for a nonprofit to make than on how to allocate funds? Human nature brings politics into the budget process. Address it head on.
  • The product: Budgeting is a little bit science and a little bit art. It all ties together!


If you are looking for help building your better budget, Krisp Communications can help create your story in numbers.

Read more here!


 
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