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Budget and Planning Season

Welcome to fall! For many of you, the kids are back in school and things on the home front are falling back into a regular routine. Last night I went to back-to-school night which, for me, makes the transition to fall complete.

This also means it is budget and planning season for your organization. If you gravitate to planning, the prospect of working on next year’s budget and plan is exciting. And I know that this is not the case for all of you. Some of you might be tempted to wait until the week before the final Board meeting of year, and then just a couple tweaks to last year’s budget, and you call it good. If you take this shortcut, you are short-changing your organization.

Your budget is a strategic planning tool. Your budget is your annual operating plan in a numerical format. It is a roadmap for planning and evaluating the sustainability of your programs and your organizations overall.

To make your budget the most useful and relevant to all the work you do, it is essential that you track the revenue and expenses for each of your programs individually. This type of program-based budgeting is important for a number of reasons.

First of all, program-based budgeting allows you to evaluate the financial sustainability of each of your programs.

Secondly, program-based budgeting enables you to see the true costs of each program including its portion of shared operating costs like rent and office supplies. These operational or overhead costs should not all fall under an administration category. Knowing the full-costs of running your programs means you can make bigger, and more realistic, asks of the foundations who fund those programs.

Of course, one of the most important uses of your budget is to plan for the long-term sustainability of your organization. If you haven’t built up enough financial reserves, say 6 months of operating monies, then plan your budget to have a surplus so that you can make a contribution to your reserves. If you are in a tight spot financially, you need to be especially conservative in your income projections, and you need to put time into evaluating the funding of each of your programs. You may need to make cuts to unfunded programs.

TREC has a budget template which makes it easy for you to budget by program area, and to assign shared costs to each of the programs. If you’ve seen the template previously, you may want to check it out again. We have freshened it up and made it easier to use. We also have created TREC’s Budget Toolkit with a set of instructional videos and other TREC resources to guide you through your annual budgeting process. And, as always, we are here to help if you get stuck.

I hope you will put TREC’s Budget Toolkit to use. Trust me, it will feel great to go into the new year with an accurate budget and a clear direction.

Background Image: American Rivers | Scott Bosse

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