Is Your Nonprofit Making This Budgeting Mistake?

Nonprofit executives - here's one of the biggest mistakes established nonprofits make during budgeting season.

It’s not about the process - though that can almost always be more clear, transparent, and collaborative.

It’s not about the tools - though re-teaching staff how to use outdated budgeting technology every year instead of investing in cost-effective and intuitive tools regularly results in lost time, accuracy, and trust.

It’s not about the timing - though it can be incredibly hard to predict what next year looks like 6 months in advance if 65%+ of your revenue comes in during the last two months of the fiscal year.

It’s that you forgot about your strategy.

Listen - I know what you're going to say:

"Veronica, I spent 6 months leading the team through developing our strategic plan. I talk about it in every staff meeting, every donor meeting, everywhere I go. There is zero chance I'm forgetting about it."

And to some extent, you're right.

Except for this part:

Your budget = your priorities. Full stop.

No combination of strategic pillars, frameworks, beautiful storytelling, or detailed tactics can displace the fact that your budget is the primary guiding document for how your organization will invest its resources.

So, if you've introduced a new organizational strategy that was supposed to shift your priorities and direction, then you can't take an incremental, "tweak around the edges," approach to budgeting - the same way you've been doing for years.

• If your strategy says "We lead with equity."

• If your strategy says "We prioritize innovation."

• If your strategy says "We want to retain and grow our team."

Then it needs to be appropriately represented in your budget - with both staff investments and other investments (advisory support, consulting, tech, innovation/experiment funding, professional development, benefits, etc.).

And if you're waiting until after your budget is finished to articulate your strategy, then you're really setting your team up to fail.

Strategic clarity includes ensuring your strategy is represented in everything you do - especially your budget.

Saying your priorities isn't enough. If you want to succeed, you have to show those priorities in how you expect to invest your time and resources.

How are you ensuring your organization’s strategy and budget are aligned? Join the conversation on LinkedIn.