Does Your Organization Budget Support Your Strategy?

Nonprofit executives - here's how to make the next 1-3 years easier, more collaborative, and more successful for your organization.

Make sure your organization's budget supports your strategy.

Organizations roll out strategic plans claiming they will guide the organization's growth and impact over the next several years.

But when it comes to day-to-day operations - the work that actually gets done - it's usually the budget, not the strategy, that drives what people work on.

That's because in well-established organizations, the budget gets more attention.
→ It's what you're holding your team accountable to - both for revenue goals and expense expectations.
→ You're probably monitoring financials on a weekly - or even daily - basis.
→ You're talking about gap-to-goal and closing plans for prospects in every executive team and development team meeting.
→ And the first investments to be cut if revenue is low are the new initiatives or strategic efforts that aren't yet core to the business.

If the budget doesn't support the strategy, then:

→ The desire to hit big revenue targets increases the organization's willingness to accept gifts for programs that aren't a great strategic fit, which in turn exacerbates mission creep and burnout.

→ Teams that are supposed to be running new strategic initiatives will quickly find out there are little - or no - resources to support the effort.

→ Team morale takes a hit due to unrealistic expectations and fractured direction from leadership.

→ That strategic plan you spent 6+ months working on is likely to be abandoned within the first year.

There's a better way.

If you're able to push back your budgeting process so it comes after the strategic plan, do that.

If you're not able to do that, discuss with your CFO and Board how to set a short-term (6-9 month) interim budget that keeps operations going and gives you time to create a budget more aligned with your strategy.

If that's not doable, then you have some important expectation setting and messaging to do - for your Board, your staff, and your community - so you can get to a more strategically aligned budget over the next couple of years.

Read more about the importance of a budget that aligns to your strategy.