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This Month's topic: Budgeting In a Recession
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| This
Month's Topic: Budgeting In a Recession |
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Sites
of the Month
Each
month, this area provides with a number of my favorite and most helpful
sites regarding the topic of the month.
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Management Tip of the Month
Each issue, I start with a
discussion of my management perspective on the month's topic, and give
you a few hands-on ideas to consider.
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Recommended Publications
Here, I provide you with my
recommendations on the materials available that can help you
become more mission-capable in the area of Budgeting In a Recession
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Technology
I provide you with some good
ideas for uses of tech to better your organization in the area of Budgeting In a Recession.
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Marketing Tip
So much to say, so little space to
say it.....
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Next Issue
In October, we'll
turn to an area that is close to the stewardship center of every nonprofit : Disaster Planning.
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Past Issues:
You can see the topics of past Mission-Based
Management Newsletters, and then view those that are of
interest to you, by scrolling to the bottom of the newsletter, or by clicking here. |
Websites of the Month
Here are my recommendations for websites
of interest on this month's topic: Budgeting In a Recession:
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Management Tip of the Month
Budgeting In a Recession
So, let's be clearer than our politicians have been: We're in a
recession in the United States, at least for those of us in the lowest
95% of incomes. Our staff, our donors, our government funders are all
feeling stretched, and many are cutting back their own budgets, which
mean most nonprofits are doing the same. Thus, if you are looking at a
lean FY2009 or 2010, what should you do?
If you don't know by now how to develop a budget, I can't help you here
(but there are ton's of good books on just that subject, and they are
listed below). But since most recessions result in reducing both income
and expenses, I want to use this space to give you some strategies and
reminders to help you through.
Recessions are really just slow-moving disasters, and as with a,
hurricane, ice storm or flood, you can get through them much, much
easier if you've done your preparations. So, let's start with what
should be in place before the budgetary storm:
- An up-to-date mission statement
- A current strategic plan with priority goals
- A current marketing plan that lists key markets
- At least 90 days of cash on hand
- A strong financial committee of your board
- A strong financial component of your staff
- A history of including a broad array of your staff in budgeting
With these in hand, re-thinking your budget and priorities is not easy, but it is easier.
More importantly, when you come out of the other side of the recession,
you will be much less likely to have either sent your nonprofit
off-mission, or damaged your reputation as a manager.
Of course, even if some of the items above are not in place in your
organization, you still have to make decisions about your budget and
your priorities. So, here's a tool for you: my Nonprofit Decision Tree from Nonprofit Stewardship.
Take a look and consider using it as a guide in your decision process.
It will make you ask the right questions and keep you focused on
mission.
Finally, get input from lots and lots of people before you decide on what to cut. Remember John Maxwell's maxim "every idea is a good idea until we come up with the best idea...." If you include people, they'll have ownership in the final outcome--even if it's an unpleasant one.
Budgeting in bad times is no fun. Like so many other situations,
though, good may come out of it. You may be able to use the situation
to galvanize support to pare back programs that are really out of date,
or to focus your board and staff on what is the essential part of your
mission. By using some simple tools, getting input from lots of people,
and using the resources you should already have in place can make it
less damaging to your nonprofit and its mission.
If
you found this hint helpful, there are lots more management, marketing,
and technology ideas for you in the "Ideas" section at www.missionbased.com.
Check them out--they're free.
And,
remember to take a look at the Mission-Based
Management Blog.
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Top
Print Resources
My
recommendations for texts and other
readings on Budgeting In a Recession:
As regular readers know--I often list books here, but Carter McNamara has already done it for us. Here's a listing of basic budgeting books, some on cash management, financial analysis and the like. Check out Carter's list--it's great.
In addition, in my book Nonprofit Stewardship,
there is a chapter on "Stewardship in Good Times and Bad" which
covers some strategies for dealing with financial crises.
Back to
Top
Technology Tip
Budgeting In a Recession...and
Technology!
There are a number of things you can do technologically to help in a recession.
First make sure that your numbers are accurate.
You can't make good decisions based on crappy data. Do a random check
on your balance sheet, your income and expense to date and the like and
make sure everything makes sense. When I work with organizations and we
do this, we often find 5-10 things that have been mis-entered, either
numerically, or expenses or income that have been credited or debited
to the wrong account.
If you are using a spreadsheet for cash flow projections, or best case,
worst case, middle case strategizing, double and triple check your
internal formulas to make sure they give you the information you want.
And, if you are turning those spreadsheets into graphs and charts for
your management team and/or board, make sure they convey the
information without prejudice. (If you want an example of how NOT to do
this, look at nearly any chart in Business Week or Forbes, and see how they've manipulated one or more axes to skew your first view of the "information.").
Remember that you can share updates (particularly the budget and cash
flow updates discussed above) online for decision makers to see at
their convenience. People will be stressed about any potential cutbacks
and want immediate access to the information, which we are more and
more used to. Post anything you want to be public--and remember,
anything you post WILL be public nearly immediately.
Tech can be a great help in tough budget times. It accelerates your
ability to look at multiple scenarios easily. But make sure you get the
numbers right....having lots of scenarios loaded with bad data does not
help!
If
you found this hint helpful, there are lots more management, marketing,
and technology ideas for you in the "Ideas" section at www.missionbased.com.
Check them out--they're free
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Top
Training Schedule for Peter Brinckerhoff
Below
you'll see the date, location, and
topics of public
training I'm
currently scheduled to do in the next few months. For more information
on a particular speaking engagement, get in touch with the contact
person listed in the right hand column, or email me.
For
more information on my availability
throughout the next 12-18 months, available topics, sample agendas, and
fees go to www.missionbased.com/training.htm
Marketing Tip
Budgeting In a Recession and
Marketing
In a recession the most likely outcome is some
cutback: staff, hours, services, something. Your decision process will
be long and arduous. But as decisions are made, what do you tell
people? How do you keep people up to date.
Assuming you already have regular communications vehicles (newsletter,
website, etc.) make sure your constituents know you are working the
problem, and not just sitting back and waiting for the storm to pass.
Keep staff, board, consumers, funders, volunteers and the community in
general informed, but only with FACTS, not with rumors, or maybes, or
possibilities.
If cutbacks of service are necessary, again post facts, but supplement
them with a FAQ (a frequently asked questions) list. This will
translate the data into useful information for readers. Questions like
"Will I have to pay more for service?" or "What are your new hours
going to be?" make information much more accessible for most of us.
If you do significant fund-raising, you can use this information (we're
working the problem, here is how we're cutting back) to reinforce
your organization's image as a good steward of your contributors'
money. This can be the basis of a special situational ask as well.
Remember a key about marketing: give people what they want---and in a
crisis, people who care about your organization want information. Use
your marketing savvy to give them factual information on a regular
basis, and you will build your credibility...another positive outcome
from a crisis.
If
you found this hint helpful, there are
lots more management, marketing, and technology ideas for you in the
"Ideas" section at www.missionbased.com.
Check them out--they're free.
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Top
Future Topics for
The
Mission-Based Management Newsletter....
| October |
Disaster
Planning |
| November |
Staff
Recruitment and Retention |
| December |
Measuring
Mission |
| Jan-2009 |
Organizational
Transparency Revisited |
| February |
Different
Generational Cultures |
| March |
Organizational Visibility and Reputation |
| Send me your topic
suggestions at: peter@missionbased.com |
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You
asked, so here they are:
Past Single-Topic Issues of the Mission-Based Management Newsletter...
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Copyright
2008, Corporate Alternatives, inc.
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