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  • Writer's pictureThe MSG Team

WHAT ANY TENURED NONPROFIT DIRECTOR WILL TELL YOU ABOUT YOUR BUDGET . . .


2022 is here and some of you have started your NEW budget. Others of you might be waiting until July 1st or later in the year, but this post is for you regardless 😉


For those Executive Directors who have been around the block enough, you have a good feel for how to put a budget together and know what a brain teasing task it can be if done the right way. For others perhaps this experience is newer for you (or you just hate doing it) and if that is the case . . . then perhaps we are talking RIGHT to you. Even if you already started your new budget THIS month, we would challenge you to redo your budget after reading this if need be.


The end of the fiscal year is coming to a close and you were charged with creating a new budget for the upcoming year. You noticed that in order to stay out of the red, you needed to find more revenue. So what do you do? You raise your goal a little in grants, and then you add a touch more in events, and then finally you increase your annual donations . . . and voila . . . your budget is now in the black.


Here is the question for you. How much thought process and strategy went behind your increases? For many Executive Directors sometimes it's as little as just saying "10% sounds like a nice round number, let's go with that". If we just described you, allow us to challenge you on a few things:


Be a detective - If you are going to increase certain areas of revenue, where is that money going to come from? What new donors are on the horizon? How are you going to raise that extra money next event? Where might there be more grant dollars available? Do some detective work and figure these things out before you increase your revenue.


Be a realist - In connection to being a detective it's also important for you to be realistic in what you come up with. Once you consider where new revenue might come from, then ask yourself if your thoughts are realistic. Will "Bill Smith" who has NEVER given before REALLY give you $10,000 this year? Only you can fairly answer that.


Be gutsy - No one wants to turn in a budget that might be in the red. However being gutsy enough to tell your board members where the shortfalls might be, then makes it a group effort to figure out how to balance the budget. Some directors get worried that their board is going to think less of them if they don't bring a balanced budget.


We can promise you that the board will think even LESS of you, if you try to pull the wool over their eyes now, only to make it harder to dig out of the hole later. As they say "HOPE is not a plan", so don't put down hopeful revenue numbers but put down ones you did your homework on, that feel realistic.


Need help coming up with a fundraising plan? Midwest Studies Group can help by helping to create a plan, timeline, and potential new donor base with you. Regardless of if you use us or not, our tips are most definitely important to consider.


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Midwest Studies Group connects nonprofits to their communities, by providing feasibility studies, annual giving studies, RD planning, strategic planning, and capital campaign support. Learn more at www.midweststudiesgroup.com.




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