Funding is the top concern of every nonprofit leader. And in light of the current Coronavirus outbreak, that concern is all the greater. Economic shifts have affected every organization’s budget projections. Nonprofit leaders are now charged with the task of implementing best practices to bring stability during uncertain times. Here with some do’s and don’ts for budgeting is Sarah Olivieri, from PivotGround. Sarah is a budgeting expert and former executive director who helps nonprofits get unstuck when it comes to making financial plans.
DON’T Cut Your Revenue-Generating Activities
When budgets are tight, you may need to make short-term cuts for long-term health. Just be sure to keep your revenue-generating activities! Even in the nonprofit realm, you have to spend money to make money. If you cut those activities, you cut your ability to bring in money. This is hard for so many heart-driven nonprofit leaders, but remember: if you completely run out of money, your mission is done and you can’t deliver any programs. So better cut a little on programs now so that you can ramp up your fundraising activities, your money generating activities, and eventually add those mission activities back.
DO Grow Your Fundraising Efforts
An economic downturn will affect your current donors. Some will not be able to give at all; others will have to give less than usual. What doesn’t change during an economic downturn is generosity— your current donors will still desire to give and potential donors will suddenly become more aware of the need to give. So now is the time to grow your fundraising efforts to enlarge your donor file. You want more people aware of your cause and receiving the invitation to join it.
DON’T Vilify Marketing & Fundraising Dollars
Too often in the nonprofit realm marketing and fundraising budgets are seen as suspicious and lavish. The for-profit sector, however, invests 25% to 30% of total income to like marketing and fundraising. Investing in activities that raise awareness about your mission, your impact, and the way donors can change lives is necessary for the health of your organization and the good of society.
DO Consider Borrowing as an Investment
Many nonprofits are tight on cash because spring fundraising events were cancelled due to social distancing regulations. To keep afloat, your nonprofit may need to borrow money to invest in funding activities that will back fill your expected budget. Grants, foundations, and even loans are options.