Nonprofit News: Budgeting in a Yo-Yo Economy
By Madeline Bennett, Program Associate
Current challenges such as inflation, market instability and funding unpredictability have resulted in a yo-yo effect on the economy, leaving nonprofits to feel the pressure and pushbacks in service delivery, staff retention, operational support and the ability to plan for the long-term. As many are in this boat of uncertainty, budgeting for the organization becomes instrumental to sustainability, not just for next year, but for upholding your mission as a whole.
But how do you prepare for that which you cannot see, aside from taking a time machine back 30 years to build a robust endowment fund that provides you with sustainable support? A session titled “Nonprofit Financial Stability and Budgeting During Economic Volatility” at the Oklahoma Center for Nonprofits’ Law and Finance Conference last month had some answers. CPAs Stephanie Bailey with Core Business Advisors and Sherry Dale with Mettise merged their knowledge to offer advice and explore budgeting practices that can set you up for success.
Step-by-Step Budgeting Guide
- Create a Timeline and Process
- Get the Right People in the Room
- Build Upon Data and Assumptions
- Gather Information and Get the Staff Involved
- Review and Finalize (Write it Down!)
- Present to the Team
- Ongoing Monitoring of the Budget and How It’s Fairing
Top Three Words of Advice for the Budgeting Process
- Continuously Elevate the Budgeting Process | In other words, maintain clear parameters and steps to determine the best budget for your organization, and remember data accuracy drives how to make that budget happen
- Pick Your Battles | Some things are worth fighting for, but if things can’t stay the same, creative thinking and internal collaboration can drive how you fulfill your mission.
- Be Prepared | As much as we like to plan ahead, unexpected things happen, so be prepared to adapt when the ground starts shifting under you.
So now you’ve got your numbers on the page, and you’re committed to monitoring and adhering to the budget as best you can. That’s it, right? Wrong!
As Bailey and Dale pointed out, particularly in times of volatility, scenario-based forecasting can test and strengthen your budget. While the process may seem a little daunting, it’s meant to prepare your organization, much like a safety plan in case of a tornado. As with any emergency preparedness plan, you propose realistic hypotheticals and create a plan of action so if the scenario does arise, your organization is ready.
By stress-testing your budget like this, you create security around your organization and staff, and are prepared regardless of what trouble comes knocking. But in case it does come around in 5, 10, 20 or even 30 years, remember, the best defense against unreliable funding is a nonprofit endowment! Reach out to us to learn how you can build annual, reliable support for your nonprofit or to strengthen those reserves you already have in place.
Learn More About the Conference and Presenters
- Core Business Advisors | provides contract CFO services, tax compliance and advisory, and financial and management consulting.
- Mettise Group | a woman-owned business and offers a number of services including consulting, CFO services, executive coaching, training, and peer groups.
- Oklahoma Center for Nonprofits | provides shared financial services.