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

Recently, while my husband and I were traveling, we had a chance to view a beautiful sunrise over the Atlantic Ocean. My husband snapped a picture. Gold streaked across the morning sky above the shining water while patches of blue peeked through the retreating clouds. The scene would make a lovely painting. But, actually turning it into a painting is another matter entirely. I’ll have to leave that challenge for another day.

Some of us feel that way about planning our year. Our Board has broad, exciting goals like the gold streaks across the sky. New ideas peek through the old activities. But fitting new activities into an already busy schedule feels like another matter entirely. Unfortunately, we can’t always leave that challenge for another day; and that’s where the budget comes in.

The budget? As if you don’t already have enough to do, I’m adding sunrise, inspiration, your Board’s ideas, and the budget? I’ll explain. It’s not because I’m a numbers geek. The idea of implementing new strategies leads me to think about the budget PROCESS, because, if you do it right, the budget process is the bridge between ideas and action.

The budget is the financial expression of what you plan to do. In developing your budget, you should identify your Board’s goals and strategies and translate them into an action plan that sketches out what you want to do for the year. Then you and your budget team can flesh out the sketch into a full picture. Of course, instead of acrylics, oils or watercolor, you’re painting your picture with numbers.

The budget process is powerful, even transformational, so you will need a powerful team. Pull together a few key people including your Board Chair, CEO and Program Director as well as your Treasurer, your COO, CFO, Development Director and Controller. Regardless of titles, try to find the individuals within and outside your organization who fill these roles. If you wear several of these hats yourself, just put fewer chairs around the table.

Now that you have your team, you’ll need time on your side to conduct an effective process. Your budget masterpiece won’t be painted overnight. You’ll need 10-12 weeks to take your budget from plans to approval. Work backwards from date of the Board meeting where you want final approval and schedule meetings to allow for something like this:

    1. Board develops priorities,
    2. Budget team kicks off, discusses Board’s goals and strategies for the year,
    3. Team tackles and assembles draft budget,
    4. Team reviews draft budget with Finance Committee,
    5. Team revises draft budget,
    6. Finance Committee approves budget,
    7. Board discusses and approves.

This structure will allow you to flesh out new ideas and see how they fit. If tradeoffs need to be made, you’ve got the Finance Committee standing by to make those tough calls. In setting up your budget process, you’ve created a bridge between ideas and action.

That’s enough budget progress for one day. Next time, we’ll discuss more about actually painting the budget picture.

To find out more about budgeting, check out the Building Your Budget—and putting it to work session at the upcoming live seminar, 501(c)(fit!)— Financial Intensive training for the Nonprofit Executive.

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