07/23/2018

Simple Budgeting Needs Big-picture Leadership

The nonprofit world is struggling with financial planning

I write a lot about the future in this space. Not in the thought-leader-futurist sense, where people pontificate on what’s going to happen—I routinely fail to correctly predict election outcomes and election winners, so my crystal ball is forever cloudy on that sort of thing. But I do try to nudge leaders here to think about the future of their staffs and their boards, and to do the necessary work to identify the trends that will affect their associations (and their industries) in the years to come.

But sometimes the conversations about the future need to be a little more ground-level. As in: Can you keep your association’s lights on for six months if you face some kind of financial catastrophe? That’s a consistent issue for many smaller associations, and recent research suggests that the broader nonprofit world is struggling with the problem. So checking on your financial status—and taking a fresh look about how you’re planning ahead—is worth a look.

The scope of the problem is revealed in a report by BDO earlier this summer, Nonprofit Standards: A Benchmarking Survey [PDF], which suggests that the sector is so focused on creating and expanding programming that it’s putting its survival at risk. As a summary article in Fast Company puts it, nonprofits first “pour too much money into programs and not enough into overhead, which may help more people in the short term, but can create a ‘starvation cycle’ where eventually the group can’t support its own growth. Second, they don’t save any money for unexpectedly lean times.”

Please select this link to read the complete article from Associations Now.