Your Budget is Out of Date, and What To Do About It
No matter your area of focus as an organization, your FY20 operating budget is officially out-of-date. Whether your expenses are increased because you are currently providing essential services to a rapidly growing population of people in need, or your operations and attendant revenue are shrinking with closed buildings, cancelled programs, and layoffs, it is time to reorient yourself for the rest of the fiscal year (and beyond). With earned revenue getting tougher and tougher to come by, your role as a fundraiser is becoming ever more important and you need to make sure that you are up to date on operational conversations at your organization about how your finances are changing.
Here are three considerations to think about as you dive into these important conversations with your Executive Director, General Manager, and/or Accountant.
Cash is king. This is especially the case right now as so many organizations are struggling to keep their staff paid. You’ll want to develop an understanding of how much cash your organization has on hand, and what is going to be needed to get to the end of the fiscal year. This information will inform your strategy around who you are approaching and how you approach them. You might ask a donor to speed up the payment on an existing pledge, or making a brand new ask of someone you know has the capacity to make their gift in full, right now. If you can pull together a challenge or matching gift, you can even specify that only gifts paid (not pledged) will be matched. But you need to know what goal you are working toward in order to build this cash-focused strategy for success.
Don’t forget the bigger financial picture. Making sure you have the cash to get through next week and next month is so important, but you also need to be aware of what your fiscal year is going to look like by the time you get to the end of it. Your FY20 actuals are going to be an important part of your fundraising toolkit (especially for government and foundation requests) for another two to three years. In the case that you are looking at a significant deficit, you can start building your narrative now around exactly what caused that deficit and how you plan to recover.
Look to the future. Whether you have a July-June or a Jan-Dec fiscal year, COVID-19 will most likely directly impact your FY21. As you work on projecting (and re-projecting) for the next fiscal year, consider which funds or grants for programs that have been moved to the future might have to be moved into your next fiscal. You may also need to plan for funders that have taken a big financial hit over the last several weeks and won’t be recovered enough to renew their giving to your organization next year. If you haven’t started having open conversations with your closest and most significant donors about the impact that COVID-19 has had on your organization, the time is now. Hearing about how they are doing and what they are planning for the future will help as you begin the process of projecting your FY21.
For more resources on this subject, check out our posts about incorporating the COVID-19 Pandemic into your storytelling and how to build community during the Pandemic.