FUNdraising Good Times Wisdom when facing budget cutsPart six of a mini-series on nonprofit budgeting

When faced with a revenue shortfall should a nonprofit cut expenses across the board? Is there one way to “balance the budget?” We share insights from John Bazzanella, COO of Tennessee Nonprofit Network, as we end this six-part series on nonprofit budgeting. What should a nonprofit do when facing revenue shortfalls? One way to reduce the stress is to plan ahead in the budgeting process and create contingency plans based on revenue projections. This process allows you to consider scenarios related to your level of confidence in different revenue streams. Begin with the full budget, then reforecast revenue with however many scenarios you want (less than projected donations; didn’t receive a grant; didn’t hold a special event, etc.). Then think ahead about how you would adjust expenses for each scenario. You don’t need to detail each cut to expenses, but rather, have a general strategy prepared should you find yourself in a particular scenario. Approaches to reducing expenses will vary and might involve program changes or increasing operating efficiency. Be creative. Maintain a balance between program and overhead needs and stay relevant and impactful to those you serve.& & The value of scenario budgeting is that you’ve estimated how much...