Nonprofit organizations need to develop budget strategies to reach the goals of the organization. Strategies and plans must be implemented, even though the organization does not keep money or funding for profits. An operational budget is an imperative factor in ensuring that the organization can fully offer the programs and services needed by people using the organization and the objectives and missions of the organization are met.
Budgeting and Balance Sheets
Although a nonprofit organization does not keep money for profitable purposes, it does need money to operate, pay for employees and develop programs and services to people in need. One budget development strategy is to define the needs of the organization and develop a budget around them. Identify fixed expenses like rent, labor costs and salaries, and flexible expenses like office supplies and awareness campaigns. In addition, create a balance sheet that shows where the money is coming from in terms of donations and contributions and how it is being spent. The amount of funding left over in the budget is used to offer services and programs that should be addressed in the balance sheet. This type of budgeting strategy allows organization executives to identify available funds for specific projects.
Risk Management
Despite the size or purpose of the nonprofit budget, the organization must conduct risk assessments to ensure the budget is flexible and reliable. Since the nonprofit budget income can vary greatly if the income is mostly on donations and sponsors, the budget must be analyzed in terms of risk factors. A list of possible solutions needs to be created, so the budget is managed and risk-free at all times. Once the budget is under risk management, it can be altered and developed to suit larger goals and plans for the nonprofit organization.
Nonprofit Goals
Another budget development strategy is to create the budget around the goals of the nonprofit organization. For instance, if the goals are to provide educational or supportive programs for needing people of the community, the organization needs to have funding available to operate these programs successfully. Determine how much the programs will cost to operate and cut down on other spending to ensure the budget is operational, rather than a collection of negative figures.
Donation Campaigns
A budget needs to be flexible and operational, which means that money needs to continuously come in, so the organization can keep the programs and services active without going into debt. One budget development strategy is to have donation campaigns or fundraisers every three months, so the nonprofit can pull in additional money for the operations. These types of campaigns should be prepared and planned on a quarterly or biannual basis.
