Budgeting season signals a new beginning, a time to re-evaluate goals—a puzzle to put together piece by piece with the satisfaction that when it is done, there is a clear path forward for the next year.

When learning how to manage budgets, we’ve had great teachers and—with them in mind—we’d like to share some of the wisdom that has helped us build successful budgets for organizations large and small, across sectors and markets.

Here are just the broad brushstrokes of how to think about budgeting—a refresher for some, new tools for others, and some general guidelines as we continue to navigate the impacts of external global events.

Budgets Reflect Your Priorities (Values and Goals)

Your budget, once approved, will guide how you spend and raise money for the next 12 to 18 months. If you are lucky, it will also show where and how to invest in new efforts.

The decisions you make as you allocate your budget (revenue and expense) will reflect where your (organization’s) priorities are.

What Are Your Top Priorities?

Do you want to attract more monthly donors, build giving through digital channels, re-engage lapsed donors, add new donors to your file?

Your budget should reflect where you are putting the emphasis on your program in the coming year and serve as the first step to reaching your goals.

Which Comes First, the Plan or the Budget?

As you begin developing your plan for the next year and mapping out your budget, the reality is that you are dealing with “chickens and eggs.” Your plan will inform your budget but your budget (how much you can raise and spend) will inform your plan:

If you would like to invest in a new unproven online fundraising effort but you can’t get budget approval, you’ll have to change your plan.

If you plan to focus on lapsed re-engagement, this should be reflected in how you are allocating expenses in your budget.

Make sure your plan and budget are aligned, what you say you want to do should be seen in your annual revenue and expenses. Budgeting is a balancing act, but also a right-brain/left-brain exercise: do the math but also carve out time to be creative and identify new audiences, opportunities, and investments.

Budgeting Is a Negotiation Process

Anyone who budgeting experience knows it is a process of give and take through stages of negotiation. Inevitably, whatever you submit, there is a good chance there will be pressure to raise more revenue while reducing expenses.

If you anticipate the possibility of pushback from leadership, why wouldn’t you plan accordingly?

It’s helpful to create a (1) conservative budget, an (2) attainable budget, and a (3) stretch budget. If you know ahead of time you’ll need to make adjustments, you should take this into account with how you build and submit your budget(s).

Crunching the Numbers

With the above framework in mind, we’ll leave the actual number crunching up to you. How you structure your spreadsheet and calculate the numbers—whether ROI or cost-per-dollar raised—varies from one organization to the next.

That’s why NextGen works closely with each client to ensure budgets are aligned to priorities and, working together, we create a path to follow for the next fiscal year.

Let NextGen Help

Want to learn how to better budget for the next fiscal year and invest in successful campaigns? Connect with NextGen today to get started.