“If you fail to plan, you are planning to fail.”
It’s one of those quotes that gets repeated so often it risks becoming background noise. But when it comes to nonprofit finances, it contains a lot of truth.
Let’s be honest: most people don’t start nonprofits because they love spreadsheets.
They start nonprofits because they care deeply about a mission, a community, or a cause. Somewhere along the way, however, someone has to answer questions like:
- “Can we afford another staff member?”
- “What happens if that grant isn’t renewed?”
- “Why did our insurance premiums go up again?”
That’s where financial planning comes in.
For many organizations, budgeting is an annual ritual. The budget gets built, reviewed, revised, revised again, approved by the board, and then filed away until someone asks why office supplies are running over budget.
But a budget alone only tells part of the story.
A budget answers the question:
“Can we make this year work?”\
A forecast answers a different question:
“Will our current model still work three years from now?”
Both matter, as the next blog posts show!