No More Shoestrings!

 

If I had a dollar for every time a nonprofit leader said to me they couldn’t afford something because they had a “shoestring budget” I’d have enough money to buy them all slip-ons by now.

At some point in our history the word ‘nonprofit’ became synonymous with things like poor, needy, make do, sacrifice, zero/balanced budgets, no growth, trudge along. Not every organization runs like this, but many do. And I’m on the verge of pulling a Moonlighting version of Cher.

Snap out of it!

Nonprofits are businesses that must operate with a mindset of sustainability and growth. To do this, each organization must plan a budget that exceeds its annual expenses. A budget that nets out to zero (income matching expenses, dollar for dollar) does not do this.

I urge every nonprofit leader to examine their annual budget thinking “what would I like to be able to do next year that I don’t have the funds for this year?”.

When you’re planning next year’s budget ask yourself (and also your staff and board, perhaps) these 10 questions:

1. Are we adequately staffed? Do we need more employees? More qualified employees? Should we be offering better salaries in order to attract and retain quality employees?
2. Is our office a space that conveys the status we want to project?
3. Is our branding, messaging, and marketing effective?
4. Which of our programs is performing best and how can we make it even better/bigger?
5. Which of our programs is struggling the most and how can we bring it up to par? Or should we reallocate the funds for this to something more worthwhile?
6. Is our equipment up to date? The computers, printers, software, security?
7. Which of our expenses is smaller than it should be because we’ve been “making do” for so long? (Common expenses to diminish on a shoestring budget are items like office supplies, marketing/advertising, software, donor records and other efforts toward donor relations.)
8. Do we have an investment portfolio, or somewhere to put reserves to earn interest or dividends?
9. What spending will we need to do to achieve the organizational goals we have for the next three years?
10. What BIG DREAM do I have for this organization? (Fill in the blank: If money were no object I would plan for us to _____________________________________________.)

I understand that by answering these questions, you’ll wind up with a budget that’s a lot more bottom-heavy than you’re used to. The next step, though, is to make a more strategic funding plan to determine the best possible income streams for your organization. Here are some thoughts for you (and your staff and board) to consider when working on the funding plan that will give your organization the income it deserves to fulfill your mission, your goals and your BIG DREAM:

• How well do you know your donors? Could you be getting more from some of them?
• When was the last time you had a capital campaign?
• Do your programs fit well into grant opportunities you can easily find?
• Could you be charging program fees?
• Are your current fundraisers effective? If not, would your time be better spent earning income for the organization in some other way?
• What corporations are near you, geographically, that share your organization’s core values and mission?
• Is your current board of directors using their influence to introduce large donors and people of power to the table?
• Is your current board of directors fulfilling their obligation to fundraise individually as well as collectively?
• Does your organization have any passive income?