Your Wish List—a new approach

Joan M. Renner, CPA, CGMA, Director 501(c)(fit!)

A recent survey says, while holiday shoppers are out buying gifts for others, 8 out of 10 plan to buy a few gifts for themselves.  This is a great idea I’m sure we can learn from.  After all, who knows what’s on your wish list better than you do?

So what is on your wish list this year?    Have you been wanting to expand that new program?  Maybe you need to add one more staff position, or start your reserve fund.  Like most, your wish list probably includes a number of items that would really help strengthen your organization. 

Now, how does this year’s list compare to last year’s?  Are you still wishing for the same things?  If your wish list is starting to look too familiar from year to year, it’s time to try a different approach—why not shop for yourself. 

Where do you shop for the things on your own wish list?  To get the money, you might make a special appeal or apply for a grant.  You might cut back on an old program to make room for a new one.  But you’ll never cross those great ideas off your wish list, and get them into action, until you take the first step—get them in your budget.    

Your budget is where it all starts.  It’s the financial expression of what you intend to do.  Many organizations carry forward the same budget year after year.  This is fine–if you plan to do the same thing year after year.  However, to make your wishes for new programs and activities come true, you need to orchestrate a process to get them in your budget.

Of course you have to make choices, but that’s what the budget process is all about.

What can we learn?

Plan out your budget timeline.  Start early to give yourself at least three months to allow for the exchange of information that needs to take place, to develop a useful budget that meets your organization’s goals.

Build your team.  Gather their wishes.  You’ll need Board input from the strategic plan or other discussions about vision, goals and strategies.  You’ll also need input from your program directors and other key members of management about their financial expectations—and their wish list items.  Finally, you’ll need a finance person to pull it all together.

Talk through your wish list.  In each area of your budget, review a draft based on last year’s activity, then talk about how you would like this year to be different—your wish list.  What do you want to do?  Who will do it?  Where?  How?  When?    

“Dollarize it”.  Once you flesh out the description, assign price tags to each element.  If your wish is a new program, what will you need to spend for consultants, space, supplies, salaries?  If your wish is a new position, what will that person cost for salary, payroll taxes and benefits?  If your wish is greater financial sustainability, how much should you budget as an addition to your reserve? 

Discuss and Revise.  Like most organizations, your expected income won’t cover all your new ideas along with your existing programs and activities.  Your draft budget may very well have a shortfall.  At this point, don’t plug income with new contributions, and don’t take it all upon yourself to decide what to cut.  Instead, determine a reasonable level of income, develop possible solutions for the shortfall, and take it to the finance committee.  Engage them in helping to choose between competing priorities.  Their preferred solutions may be different from yours.  Ask your finance committee to approve revisions to resolve the shortfall and revise as they suggest. 

Now your budget’s ready for the Board.  I hope you’ve been able to get a few items off your wish list and into action, by shopping for yourself—in your budget.

New to overseeing the finance function?  Our seminars for emerging leaders help nonprofit professionals learn the basics of the finance function.  In Financial Leadership Training for Emerging Nonprofit Professionals there’s a helpful session called Building your Budget—and putting it to work.

Preparing for growth?  Our Raising the Bar seminar prepares new nonprofit leaders to meet the increased expectations for financial oversight as their organization grows.    

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