Nonprofit Budgeting Basics — Part Five.

Over the last several weeks, we have discussed different elements of nonprofit budgets. Our goal is to build capacity because we often receive questions that speak to the need for a broader understanding.

Last week we looked at the stock market. Today we look at capital campaigns.

While the financial meltdown of last week continues to play out, nonprofits in the middle of capital campaigns, or about to begin one, have lots of questions about the uncertainty of the times.

If your organization is thinking about a capital campaign, pause. Do not begin a feasibility study right now. This is the time to focus on operations and ensure continuity of mission. Wait until the markets stabilize before thinking long-term about capital projects. Donors will need a greater level of confidence before they can offer meaningful insight during a feasibility interview.

If you have already begun planning a campaign, please keep the capital budget separate from the operating budget. It’s very difficult to manage and forecast when the revenue and expense items are co-mingled. An operating budget is based on one fiscal year and reflects recurring income and expense. A campaign budget is typically based on two, three, or more fiscal years and is all about the unique one-time opportunity. You want year-to-date or year-over-year financial statements to be meaningful.

If you have moved beyond planning and are in the middle of asking donors for support, keep the lines of communication open. Don’t assume donors want to stop giving. As difficult as the current economic downturn is, it’s not permanent. Every donor is unique. Their assets and their motivations are their own. Keep building relationships and ask when a donor is ready for an ask. If they are not now, then keep them informed but wait until they are ready before asking.

If your campaign is nearly complete and you are planning that much-anticipated ribbon cutting, take a pause. No group gatherings, no matter how celebratory, are happening; however, you could consider a virtual event. With a small number of key leaders and donors, cut the ribbon while you broadcast live via social media or other electronic means. In doing so, you acknowledge the need for social distancing while opening your new facility to serve those your mission supports.

If you just finished a campaign, raise a glass. You have accomplished critical work at the right time. Keep your donors informed and be active stewards of their investment and your mission. Communicate, communicate, communicate. Your mission matters and your success is needed.

Don’t hesitate to reach out with questions or to share how your organization is moving its mission forward despite the limitations of these challenging times.

2020-04-16T17:32:05+00:00March 19th, 2020|