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You love the communities and programs your nonprofit organization supports, and you’re great at making the most of limited financial resources. A well-designed budget helps you maximize funding and continue to improve the communities you serve. If only creating a well-designed budget was easier!
You must account for several expenses, investments, and financial considerations while drafting a financial strategy. To keep track of it all, you need a budgeting strategy that gives you a complete overview and helps you avoid missing anything. Learn when to start your budget, provide context, and upgrade equipment at the right time.
Know When To Upgrade Systems and Equipment
Technology provides nonprofit organizations with innovative opportunities to reach their target audience and supplement programs. Over time, equipment and systems become outdated and no longer work as efficiently as they once did. Knowing when to upgrade equipment saves time and money in the long run.
For instance, if your volunteers and staff work in the field, they need reliable wireless internet for nonprofits. Upgrading to mobile hotspots keeps your organization connected and operating more efficiently. If you provide internet access for telehealth to underserved communities, knowing when to invest in new equipment and software helps them feel their best.
When deciding when to upgrade, consider whether you require the equipment to meet an immediate business need. It may also make sense to get new systems and equipment if your current ones are outdated and no longer align with your goals. Once you’re ready to make the switch, research government programs that help cover upgrading costs with incentives, loans, and grants.
Budgeting for a nonprofit organization takes time, so start sooner rather than later. It may take longer than you think to gather necessary details, consider unique budgeting elements, and put everything on the page.
Think about other people involved in budgeting, such as stakeholders, your team, and the Board. You want to allow enough time for everyone to share their ideas and input, and you’ll need time to get approval for everything. Consider starting at least a couple of months before you need the budget.
Give Your Budget Context
While thinking about your nonprofit organization’s financial future, put your current budget in context. Consider how you manage resources and finances currently, and study your organization’s financial trends for the last few years. To better understand your current financial health, look to current budget variances, the current year-end forecast, and your balance sheet.
What current trends, risks, and opportunities do you see for your industry and organization? Think of how they affect your finances, operations, priorities, and values. For example, infrastructure challenges may change how you strategize backup solutions in your financial strategy.
Give context for organizational values, objectives, and concerns that affect your budget. This information is not only useful for financial planning, but it can also help you better understand and support your budget. If you want to focus on compliance, for instance, you may need to include more specific details in your financial plan.
Leave Assumptions Behind
Rather than include assumptions in your budget, use actual figures as much as possible. Look to last year’s budget for a solid starting point, and include partner and vendor quotes, too.
If you’re new to creating nonprofit financial strategies, start by writing as many expenses that come to mind. Next, think about best- and worst-case scenarios for raising funding. Ask your more experienced peers for help budgeting. They can offer useful tips and advice to help you become a budgeting expert.
A well-thought-out budget can bring you peace of mind and make your organization more sustainable. See how much these tips help you meet the demands of a shifting environment and improve your institution’s financial health. You’ve got this!