At Duncan Williams Asset Management we work with several non-profits and are familiar with the specific financial challenges they face. Fundraising shortfalls, investment questions, and projecting and planning accurately are just a few. Strong financial leadership is key to the success of a non-profit, and that’s more than fundraising.

What is the key to strong non-profit financial leadership? It’s maintaining an “active budget.” When organizations go through the annual budgeting process, leadership and staff agree on line-item budgets for various programs and other undertakings. Then everyone goes through the year living into their allocated budgets. But how much of this budget is based on projected resources not yet in hand? How long will we wait for those funds? At what point will we adjust the budget down?

An active budget begins with a yearly explicit planning narrative for board and staff. What are our priorities? What will they cost? How will we fund them? How much of that funding is unidentified and how will we adjust if it does not come in? It is important to begin the year with a clear expectation that budgets will change as income does.

And the second part of that active budget is projecting, following through, and achieving a net financial result. A net financial result means that your team didn’t just stay within budget – it means they stayed within income.

At Duncan Williams Asset Management, we love to help non-profits run smarter and more sustainably. If you’ve got a financial question about your non-profit’s financial health or strategy, give us a call. We’d love to talk.

Author: Jon Hall

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