coins-currency-investment-insuranceAs a volunteer treasurer, you’re responsible for overseeing the creation of the annual budget, along with several others, including ones for fundraising campaigns, capital spending projects, cash and more! Budgets are useful because they are management tools that quantify your board’s vision and mission, which helps you to both chart your course, and, measure your progress.

Without sound budgeting processes, it becomes difficult to make a difference in your community, and almost impossible to illustrate the impact of your work. Creating realistic, sustainable budgets that align with your mission is critical to your nonprofit’s health. The following list of past posts will help bring you up to speed on how to create budgets that improve your oversight and governance of your NFP’s finances.

Your NFP’s Values and Strategic Plan Come Before the Budget

Ironically, creating a budget doesn’t begin with compiling it. You first have to make sure that your nonprofit’s board has decided on its values and mission, set goals to move it forward and developed a strategic plan to reach them. Once your board has made these key decisions, you can then create a budget that aligns with your nonprofit’s values, mission, and strategic plan, and creates long-term financial sustainability.

Making Sense of Your NFP’s Finances

If this is the first time that you’ve served as a volunteer treasurer, and have little experience in bookkeeping or finance, you may want to read our article on improving your understanding of financial statements. This is particularly helpful before you begin the budgeting process to bring you up to speed on some of the financial documents you will be using during this process.

Build Better Budgets

Before you begin the budgeting process, you should understand at the outset that it could take several weeks, or even months, to gather all the information and details that you will need. That’s why you will want to start early, and follow the strategies in the article, How to Better Improve Your Budgets.

Keep to the Plan

As the fiscal year unfolds, it is normal for there to be some variances and deviations from your budget from month to month. For example, some members might pay dues early, others a little late, or, you may receive more donations than you anticipated. An unexpected event could occur that causes an increase in costs. Regardless of the reason that a variance happens, your goal should be to plan for these events and include them in your budget. Think of your budget as a roadmap, specifically designed to help you plot your nonprofit’s course. The articles Stick to Your NFP Budget and Where to Cut Costs When Trimming Your NFP’s Budget can help your nonprofit stay on track despite these fluctuations and other changes.

Fundraising Budgets

Every fundraising event or other campaign should include a budget to help you set goals, measure progress and control costs so that you know if this specific activity is truly worth the time, energy and other resources that you pour into it. Our blog posts Fundraising on a Budget and Planning a Fundraiser on a Tight Budget present some ideas on how to make the most of your efforts so that you have more money to put towards your mission and less of it going to cover the costs of the fundraiser.

Forecast the Future

Once you reach the end of your fiscal year, you will find that your budget still contains information that’s very valuable to your organisation. Not only does it provide a record of your current year’s performance, but it also creates a baseline of your activities upon which you can base projections in the future, to create a more balanced, realistic budget for subsequent years. You can learn more about how to use past budgets and other financial data to improve your future budgets by reading our article on preparing your next financial year’s budget.