Where Does The Budget Start?
Tuesday December 17, 2019
Any accounting business or tax advice in this podcast is not intended as a thorough in depth analysis of specific issues nor substitutes for an opinion, nor is it sufficient to avoid tax related penalties. If you need any help with that, please reach out. Hey, it's the Nonprofit Nuggets Podcast with me, Chyla Graham, CNRG Accounting Advisory where we are working with the overwhelmed nonprofit leader to reduce their anxiety about money, so that they can make an impact. Our podcast is short form, so save yourself 15 minutes or less to get some things that you can implement right away with your organization. Be that as soon as you finish listening or later on today, today's episode is all about the budget. This is definitely what people come to me like, "Hey, we need to do a budget and I have some thoughts."
Your budget is not something you can throw together. That is what I see a lot is that either people are not putting enough thought into their budget or they're putting too much thought into their budget. So you need to be on a nice middle ground. Do not have a budget with cents, it's not necessary. No one cares if you need to spend $3.72, no one cares. If your funder is saying down to the cents, you don't want that funder. They are going to be too much time, too much effort. So you want to be able to use round numbers, back off that soapbox and onto the budget. It is a plan. So without a budget you don't have a plan. You're not able to actually articulate to people what you're doing, especially with a funder whose just like, "Hey, how much do you need?"
If you can't give them outline on how you're going to spend the money, do you actually need the money, if you don't have a plan behind the spending. So my tip for today is to start small, take one project from your organization and develop a budget around it. Think about how much you would spend on supplies. How much do you need for items like entrance fees, any stipends for workers or lunch? If you have an afterschool program, think about all the little components for that one project. Once you've done that, repeat, do it for each of the projects until you have all the projects. And then go ahead and do it for your admin. So do it for just to run the organization. What is necessary? Is rent necessary? Do you need transportation costs? Do you need to pay for phone bills, lights, think about them, each little silos and then bring them together and then when you can bring them together, you're able to say it.
This is truly how much we need and you can trim down. And another reason why it's really good to do this on a project basis is because if you're applying for a grant that says we will only support this type of thing, and you have it all in one giant general bucket, it's way harder to break it down. So start small and then go big. That's my tip. Work on one project at a time. Think about doing it in a day. Don't give yourself too much time to overthink it. You just really want to have a rough draft that you can refine later on. Be sure to tag us if you have questions. We are at @cnrgadvisory on Instagram, Twitter and Facebook. You can also hashtag #nonprofitnuggetspodcast where I will check to make sure that I'm seeing what you're doing and can give you some guidance and help as well. Hope you feel a little bit less anxious about putting that budget together. Have fun.
A huge thank you to all those who have participated in the masterclass. It was a pleasure learning more about your organizations and giving you guys some homework. If you missed the masterclass, don't worry we got a lot of emails that said, Oh, the date didn't work and because I know it's December and it's a challenge to get all of the things done before the end of the year. We will offer this again in January. So if you have not already subscribed to the emails, head over to our website and join the newsletter and you will be able to see more information on what's coming up, what are upcoming events and following on social media.