Tuesday, October 13, 2020

Nonprofit Budgeting: The Experience of Illumination

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TODAY’S BLOG: 10/13/20

What about nonprofit budgeting is not known to the public?

To a nonprofit organization, budgeting can be challenging and quite cumbersome. Review this list of types of budgets that nonprofits may be tasked with preparing and managing:

🤯 The Program Revenue Budget
🤯 The Grant Revenue Budget
🤯 The Donor Revenue Budget
🤯 The Management and Administrative Budget
🤯 The Fundraising Budget
🤯 The Base Pay Compensation Budget
🤯 The Social Security Budget
🤯 The Medicare Budget
🤯 The Unemployment Budget
🤯 The Emergency Fund Budget
🤯 The Benefits Budget
🤯 The Social Security Budget

Although budgeting is a difficult task and may require time and effort from leadership, staff, and board members, in our summation, creating a budget reaps its own rewards. To get the most out of the process of budgeting, we would like to introduce the idea of zero-base analysis when preparing a budget.

What is zero-base analysis and how does it help in preparing a budget?

Zero-base analysis entails re-creating the budget from the ground up including summarizing the direct benefit, or lack therefore of, of every expense item listed in a budget. If no benefit or if only a small benefit can be obtained from that line item, it must be eliminated at the budget level. 

Applying zero-base analysis could mean calling vendors to cancel services, replacing services with lower-cost services (one scheduling app versus another or one donor management app versus another), or re-assigning staff from back-office work to operational tasks. Zero-base analysis requires justifying every expense by determining the direct benefit on the organization for its use.

Adding the element of zero-base analysis to a budget makes creating a budget well worth the effort as it will force all involved in the budget process to carefully consider every item and relate its value to the enterprise. In this way, excessive, unnecessary, low-value costs can be eliminated at the start.

The experience of illumination and budgeting:

Looking through a magnifying glass illuminates the details the naked eye could not see alone. Nonprofit leadership require data and information as a powerful reveal into all the details of how operation flow in order to make necessary adjustments to power the NFP ship forward for cash flow and expansion.

Intuit QuickBooks follows you along your journey and provides you with the budgeting tools and more to illuminate the way to making sound business decisions and reaching out to new and existing donors and grantors. 

Intuit QuickBooks Online suite of apps have an associated mobile app for daily transactions, capturing business receipts via photo, and reviewing your most important documents financial statements. On the dashboard is a graphic and detailed view of your revenue, today, yesterday, and for past periods, a very useful tool.

Can we assist you with the budgeting process?

Yes, we can. We are available to assist you with our full list of services including installing and implementing an accounting system for your organization. Click here to access our services and pricing list. We are available at hourly rates and fixed-fee contracts. Visit our website to learn more and schedule an appointment to discuss your goals and how we can help you meet them.

Look through the information magnifying glass and learn all the valuable information to make adjustments to grow and expand. We are here to help make business management easy for: Your NFP Ship. Your NFP Compass. Your NFP Path. w/Lenore, Inc.

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