Budgeting and fundraising are two critical components for the success of any nonprofit organization. While a basic understanding of budgeting might seem obvious, it’s a new skill for many nonprofit operators. As budgeting and raising money to cover expenses for the year is a must, we have provided a few simple tips for understanding and budgeting wisely on behalf of the organization. Next, secure your client’s operation with a Nonprofit Liability Insurance program.
Good budgeting practices.
Income-based budgeting is a responsible and lucrative way to evaluate expenses and revenue. According to Nonprofit Accounting Basics, this means:
- Budget for income first. Base income targets on realistic expectations and only include reliable income in the budget. Never include an income projection that simply fills the gap to cover expenses.
- Understand the impact and timing of restricted contributions and releases on the operating budget.
- Ensure expenses are lower than the dependable income total. This requires cooperation among various departments of the organization.
Evaluate the revenue stream.
If your clients rely too heavily on one source of income, this could be a red flag. If this source suddenly becomes unavailable, the organization could be at risk. Depending on your client’s mission and type of nonprofit, recommend their revenue streams be a healthy mix of government funding, individuals, corporations, and similar foundations.
Next, keep in mind the consequences of a canceled event. If your clients rely on one or two major fundraising events, and one has to be canceled, the repercussions of that could be devastating. Planning ahead and being proactive about creative revenue sources can give them some peace of mind.
About Domenick & Associates
At Domenick & Associates, we have a unique understanding of the nonprofit sector and how to properly secure your clients’ operation. From personal and advertising protection to volunteer coverage, we offer a range of products that are necessary for their success and longevity. For more information about our products, contact our experts today at (215) 629-5701.