Many smaller nonprofits rely on fundraising for their operations. What many small nonprofits neglect to do is accurately forecast their income and expenses in the form of a realistic budget. Every budget should include the following:
- Income – all sources of income projected for the upcoming year from all types of fundraising- major gifts, grants, events, and other sources.
- Expenses – every possible expense that could occur, not just program expenses, but others like insurance, accounting, legal, etc.
- Cash flow projection – this means how the cash on hand will be spent on a month-by-month basis – how much cash you need and when it will be needed.
Armed with this information, the nonprofit board and leadership can decide upon a schedule of fundraising for the year ahead. As a group you can be strategic and avoid the “let’s fly by the seat of our pants” mentality plagued by so many smaller nonprofits who end up failing. Here is a great link that talks about nonprofit budgeting from the National Council of Nonprofits.