Contingency Planning for an Excess Budget
While Fry is speaking about operating in a for-profit world, it would be hard to argue that planning ahead for a surplus of budget doesn’t save you time and energy. It can, if you follow Fry’s suggestions, also put you on the path to executing dream projects much sooner. “Every company develops a capital expenditure plan and a list of desired projects. Most budgets limit the number of capital projects so as to reduce risk and manage cash. But a company might, for example, develop and maintain a much longer list of potential projects (all with paybacks of less than four years) and review those with the board of directors, even if not all of the projects are approved in the current-year budget.” This is something that absolutely applies to the nonprofit world.
To create or run a nonprofit you need to be a dreamer, focused on improving the situations around you. However, you also need to focus on planning. When you establish this contingency plan you’re prepared to exceed the expectations of your donors and community. “When [a nonprofit] finds itself well ahead of budget, it then proposes to the board additional projects already on the list (that have been pre-vetted). Such planning allow[s a nonprofit] to move much faster.” This way, that dream program you’ve been hoping to offer isn’t out of your current reach. The board has already approved it, and you are able to spend your nonprofit’s excess budget with painless ease. Making the experience as rewarding as it should be.
Fry says it best, when he reiterates, “you can never get back lost time.” Save yourself time and regret by planning and executing a budget that includes the possibility of excess funds.
Renata Poe Massie, Content Writer for Jitasa
Jitasa can help create an operating budget for your nonprofit.