COVID-19 wreaked havoc on virtually every sector that contributes to the American economy. The pandemic also devastated many nonprofits that rely on financial contributions to achieve their charitable missions. If the COVID-19 pandemic taught nonprofit administrators one thing, budgeting for uncertain times requires rolling with rapid changes. Creating a rolling budget means recalibrating income and expenses as new, impactful circumstances such as a pandemic arise.
Let’s review a few tips that can help your nonprofit budget during uncertain times.
Roll with the Changes
Nonprofits traditionally have created static budgets that did not change over the course of a fiscal year. The pandemic taught us that static budgets do not work well during tumultuous periods. Creating a rolling budget for your nonprofit leaves plenty of room to make changes in case circumstances rapidly change as well. A rolling approach to creating a budget forces administrators to anticipate changes, which requires leadership to operate a nonprofit with a focus on addressing future events.
One Size Does Not Fit All
Nonprofit administrators must accept the fact that each organization has unique budgeting needs. The historic notion that all nonprofit budgets are created the same does not work during a time of incredible uncertainty. You have to create a budget that matches the financial needs of your nonprofit, not a cookie-cutter budget that applies to nonprofit organizations as a whole. A budget created for a cancer research nonprofit differs from a budget that is developed for a nonprofit that focuses on raising awareness of climate change.
Even during times of stability, your nonprofit has more control of expenses than the control your organization has over contributions. This is especially true during uncertain times, such as when the COVID-19 pandemic unexpectedly dried up funding for many nonprofit organizations. Nonprofit administrators should always focus on controlling expenses, but especially during periods when a lack of control over contributions can cause a substantial budget deficit.
Think Outside the Fundraising Box
In-person fundraisers represent an effective way to increase a nonprofit’s revenue because interacting with potential donors at an event increases the likelihood of receiving more contributions. However, as the pandemic demonstrated, nonprofits have to think outside the fundraising box and one way to do that involves developing a strategy for holding virtual fundraising events.
Closely Monitor the Budget
During uncertain times, nonprofit administrators need to stay on top of their budgets by constantly analyzing, monitoring, and revising the financial numbers. If an event happens that significantly disrupts your contributions, you must act with a sense of urgency and make the appropriate changes to your nonprofit’s budget.