Revenue budgeting – Don’t set yourself up for failure
This month I’m wriitng about fundraising plans and having the capacity to execute them. Something to consider before digging into your fundraising plan is how you create your nonprofit’s revenue budget.
A nonprofit’s revenue budget must be realistic.
At Altrui, we have heard of the following scenario, or some version of it, many times. Too many times.
When creating a budget, the head of fundraising presents their revenue budget. They have spent hours on it, going over every aspect of revenue. It is quite a bit lower than the expense budget presented by leadership and programs. They are told to go back to the drawing board.
In discussions around increasing the revenue portion, leadership, including board members, suggest simply increasing the individual giving line item. This line includes giving from individual donors, separate from corporate giving and revenue from grants. They feel they can make up any difference as the year goes on.
The challenge is that this line item missed budget by $100,000 last year, because leadership made the same type of decision. Now the new budget will be increased by that same amount, with no plan to make up the now $200,000 in additional budgeted revenue.
Simple suggestion here: If you want to increase your revenue budget for your next year, have a plan on how to do that. Telling your head of fundraising to raise the budget from what they worked on and presented is not a plan. Worse is throwing them off the bus with negative feedback around performance. Save that for review time.
A great scenario is when nonprofit leadership works with their fundraising team in creating a revenue budget that is mission-supportive and realistic. This not only support the fundraising team, it also puts the responsibility of the revenue budget on all leadership.
Take a risk. Be of service. Support your friends and colleagues. Be kind.