Who Should Be Involved in the Not-For-Profit Budget Process?
In many organizations, budgeting is met with wary looks from staff and program directors. After all, that’s the accounting department’s job, right? Wrong. Effective budgeting requires a team approach.
With football season in full swing, the best teams are the ones that work together. A team may have the best coach, but without a good offense to contribute to the mix, they will get nowhere. A team with a great defense, but poor special teams, will also lose in the long run. In order to be successful, a team must have participation and contributions from all areas within their organization. Similarly, the best not-for-profits cannot rely solely on one area of the organization to prepare, update and review the budget. Rather, everyone must pitch in.
So, who are some of the non-accounting personnel that should lend a hand in the budgeting process?
- Program Directors – While a program director may focus most of their time on qualitative measurements, it does not mean they should turn a blind eye to the quantitative aspect of the position. Who else knows the resources needed to support a not-for-profit’s programs better than the program director? Getting key input from the top will help to provide a better expectation of the actual needs of the not-for–profit’s programs far better than an educated guess from the accounting department based on historical trends. Program directors are at the forefront of the industry and better suited to understand the challenges and changes in the not-for–profit’s environment, leading to better information to use when allocating a not-for-profit’s limited resources.
- Development – The development department is another key contributor to the budgeting process. Development focuses on obtaining those limited resources that the programs require. By including development in the budgeting process, a more accurate representation of future cash flows may be achieved. This information will only help in the areas of budgeting program expenses as the not-for-profit now has a better understanding of where and when funds will arrive.
- Board of Directors – Many organizations will have the budget reviewed and approved by the board, but a special emphasis should be placed on the board providing assistance in preparing the budget in the first place. The duty of the board is to set the tone at the top and to steer the organization in the right direction. This may include focusing on new programs, improving fiscal responsibility, or many other such areas that need to be properly budgeted and accounted for. Additionally, the board should be focused on reviewing and updating the budget on a consistent basis in order to keep the non-profit moving forward in the best manner possible.
The above are just a few of the non-accounting personnel that successful not-for-profits rely on to assist in the budgeting process. With a bit of quarterbacking and teamwork, you can maximize the benefits of the budgeting process for your not-for-profit organization. If you have additional questions about best practices for not-for-profit budgeting, contact Harry Fox at [email protected] or 312.670.7444.