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  • The MSG Team

Oh Deere . . . Is Your Nonprofit Future Prepared?


It's pretty amazing how similar for profits and nonprofits are in regards to how they run their organizations . . . yet at times, nonprofits will sometimes like to claim that they are VERY different. Sure, we can probably argue back and forth on the similarities and differences but here is a lesson that nonprofits can learn from one of their for profit brethren.


John Deere is known to be one of the greatest tractor manufacturers in the world. That does not even include the fact that they also make combines, mowers, construction equipment, etc. The amazing thing is that whatever John Deere does financially THIS year, determines how they look at their budget several years down the road. They make their long term goals, see how the current year goes, and then compares that to the long term goal down the road. Everything from how many tractors they need to make, what price points might need to change, how many employees should they have, and more.


Now what they are doing is nothing unique. They are simply forecasting their budget, which is something MANY organizations do, both for profit and nonprofit alike. However true that may be, the point is that many nonprofits DO NOT plan this way. Many nonprofits think on a short term yearly basis. What does their board look like for the year? What do their grants look like for the year? What does their staff look like for the year.? What does their budget look like for the year?


If you were to ask the average nonprofit what they look like 3 years from now . . . what is the revenue, expenses, site locations, clients served, number of staff, etc. many would have no idea. Even if there was an Executive Director who forecasted a budget, chances are the rest of the leadership staff and board might are not all educated on that information.


So here is the question? How can an organization plan long term, if all they do is look at their organization and budget from a short term perspective, one year at a time? So many of us current and former nonprofit directors have been guilty of turning in the next year's budget 1 or 2 months before the next year starts, and then saying "Whew, glad I don't need to look at that for another year".


With that being said, here are a few tips for you to consider:


1) Consider writing out a 3 - 5 year budget.


2) Try to gauge how many sites and program you will have 2 years from now, 3 years from now, 5 years from now . . . and then work backwards to determine what supplies and staff you might need.


3) Keep in mind that working with donors is a LONG TERM. Who you find NOW are people you are trying to cultivate for the FUTURE. This is why planning ahead is so important. If you plan for a larger budget 3 years from now, but don't make any efforts NOW to engage with new donors, how do you expect to fill that financial gap? Remember, Midwest Studies Group can help with that. We can bring new qualified leads to your organization or find planned giving opportunities, so that you CAN be better prepared few years down the road.


Preparing a budget and trying to forecast 3-5 years in the future can be hard if you have never done it before. However we would challenge you to take the leap and make this a new practice or you, so you can make for a more productive future.


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Need more help figuring out how to connect with new potential donors? Would your team feel more comfortable working with qualified leads for donations, planned giving, or a capital campaign? Let Midwest Studies Group help. Visit us at www.midweststudiesgroup.com to learn more.





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