Summer is in the rearview mirror and that can only mean one thing: budgeting time is here.
Might we suggest you take a moment to move those antacids back to your desk?
Most of our clients are on a calendar-year budget cycle. That means they are currently focused on their 2020 budgets. Development officers have the unenviable task of trying to predict what the contributed revenue number should be for the upcoming year when the current year has three critical months yet to go.
Although most of our clients use some form of zero-based budgeting, when it comes to development goals, nonprofit leaders have a tendency to use the current year’s campaign forecasted goal and then set the following year’s goal to grow by 3%, 4% or 5% or more.
And if that wasn’t challenging enough, often the contributed revenue line is increased again to help balance the upcoming budget. A 5% increase on top of a goal perhaps not met from the prior year, additional contributed support needed to balance the budget and then toss in pledge shrinkage – the 2020 goal now represents a 14% increase. Staff, volunteers and perhaps even some donors face January already feeling defeated.
The very best advice I can give to development officers and senior teams when it comes to setting contributed revenue goals is to underpromise and overserve!
Consider applying some of these best-practice budget disciplines to setting your upcoming goals:
Lastly, as we look to 2020, remember that just like the market, philanthropy doesn’t like uncertainty. Presidential election years are full of uncertainty.
Is it ok to have a flat or reduced contributed revenue goal from the year prior? It doesn’t feel good, it doesn’t stroke our egos much but … YES! Build a realistic budget for 2020. When you underpromise and overserve, the antacids stay in the drawer!