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Why nonprofit budgets should be developed in alignment with strategies

Greg Warner is CEO and Founder of MarketSmart, a revolutionary marketing software and services firm that helps nonprofits raise more for less. In 2012 Greg coined the phrase “Engagement Fundraising” to encapsulate his breakthrough fundraising formula for achieving extraordinary results. Using their own innovative strategies and technologies, MarketSmart helps fundraisers around the world zero in on the donors most ready to support their organizations and institutions with major and legacy gifts.

One of our clients achieved extraordinary results last year.
They generated more leads for planned gifts and uncovered more previously undisclosed legacy gifts than ever before (74!). Unfortunately, their marketing budget for the following year was reduced by 50%.
Why? Because not enough people died last year.
Yep. You read that correctly. Here’s what happened:
The organization received 50% less dollars last year due to less deaths and hang-ups with estates that were beyond the fundraiser’s control. So, the powers-that-be cut the marketing budget for the next year (this year) by 50%.
Does this sound ridiculous to you?
You’re not alone. And, sadly, our client is not alone. According to Aberdeen Group’s 2013 Survey Report, 48% of respondents indicated that they have difficulty aligning operational execution with financial planning, budgeting, and forecasting.
I think you should aim to avoid being one of the 48%.
Instead, push your organization to have a long-term plan (especially when it comes to major and planned gift marketing) that is aligned with your strategies. For instance, if you have a 3-year strategic plan, then you should have a 3-year budget. A 5-year plan should be aligned with a 5-year budget. So on and so forth.
Aligning your budgets with your strategies will help you:

  • Compel both your leadership and staff to develop a long-term vision
  • Set realistic goals
  • See how strategies and budgets have an impact on results over the long haul
  • Get various departments talking to each other and working together to accomplish organization-wide successes
  • Develop key performance indicators and metrics that are important and worth measuring
  • Ensure that long-term goals are met (or surpassed)
  • Improve morale
  • Remove silos

What do you think?
 
 

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2 responses to “Why nonprofit budgets should be developed in alignment with strategies”

  1. Claudia Couture says:

    To many organization have a short time vision. Their CEO or ED don’t think like an entrepreneur.

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